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Compare today’s refinance rates

On Wednesday, February 21, 2024, the national average 30-year fixed refinance APR is 7.30%. The average 15-year fixed refinance APR is 6.74%, according to ... Bankrate's latest survey of the nation's largest refinance lenders.

Mortgage refinance industry insights

Refinancing is nowhere near as popular now as it was during the run of record-low interest rates in 2020 and 2021. That said, some homeowners are still changing out loans, mostly via cash-out refinances, a type of refinancing that replaces your existing mortgage with a new, bigger loan including the balance of the first plus a portion of your home’s equity as cash.

How will mortgage refinance rates change in the short term? See Bankrate’s expert rate trend predictions.
 

Today’s mortgage and refinance interest rates

Product Interest Rate APR
30-Year Fixed Rate 7.28% 7.30%
20-Year Fixed Rate 7.11% 7.13%
15-Year Fixed Rate 6.71% 6.74%
10-Year Fixed Rate 6.42% 6.45%
5-1 ARM 6.10% 7.20%
10-1 ARM 6.89% 7.80%
30-Year Fixed Rate FHA 6.47% 7.17%
30-Year Fixed Rate VA 6.64% 6.84%
30-Year Fixed Rate Jumbo 7.34% 7.35%

Rates as of Wednesday, February 21, 2024 at 6:30 AM

 

 

How does mortgage refinancing work?

When you refinance your mortgage, you’re replacing your existing loan with a new one. The process is similar to applying for a purchase mortgage: You’ll submit to a credit check and financial review, and possibly pay for an appraisal. When you close, your new lender will pay off your original mortgage. You’ll then make monthly payments on the new loan.

You might use a different lender for a refinance than the one you worked with in the past, especially if you’re looking to save on costs. Refinancing isn’t cheap: The closing costs can equal anywhere from 3 percent to 5 percent of the amount of the loan. (You won’t pay as much as you did when you bought your home, however.)

Learn more: What is mortgage refinancing and how does it work?

How to refinance your mortgage in 6 steps

  1. Check your credit score: Refinances typically require a credit score of at least 620, but a better credit score will help you secure a better rate and make your refi even more cost-effective. You can check your credit reports at AnnualCreditReport.com.
  2. Choose a refinance type: Many borrowers opt for a rate-and-term refinance, which changes the interest rate, term or both on their original loan. This isn’t the only way to refinance a mortgage, however.
  3. Calculate the breakeven timeline: A refi usually comes with upfront costs at the closing, just like an initial mortgage. Bankrate's refinance breakeven calculator can help you figure out when you’ll start realizing savings.
  4. Compare refinance rates: Explore refinance offers from at least three mortgage lenders and keep an eye on rates while you comparison-shop — this can help you decide when to lock in a rate.
  5. Organize your paperwork: Among the requirements, your lender will want to review tax returns, pay stubs and other proof of income, as well as documentation about any assets such as savings.
  6. Prepare for closing: While your new loan is processing, don't open new credit accounts or make other large purchases. Doing so can derail your application.

Lender compare

Compare mortgage lenders side by side

Mortgage rates and fees can vary widely across lenders. To help you find the right one for your needs, use this tool to compare lenders based on a variety of factors. Bankrate has reviewed and partners with these lenders, and the two lenders shown first have the highest combined Bankrate Score and customer ratings. You can use the drop downs to explore beyond these lenders and find the best option for you.

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Garden State Home Loans

NMLS: 473163

State License: MB-473163

3.6

Rating: 3.6 stars out of 5
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Rating: 4.98 stars out of 5

5.0

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Homefinity

NMLS: 2289

State License: 4965

4.5

Rating: 4.5 stars out of 5
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Rating: 4.94 stars out of 5

4.9

1058reviews

Pros and cons of refinancing

Refinancing can be a smart move, whether it helps you secure a lower rate or tap your home equity to fund a home renovation or other project through a cash-out deal.

Pros of mortgage refinance

  • You can lock in a lower rate by refinancing, which can reduce your monthly payments and put some money back in your budget.
  • If your home’s value has increased, you might be able to stop paying PMI, which will also lower your monthly expenses. PMI should end automatically once you get to at least 20 percent equity owned free and clear, but it’s usually a good time to consider a refinance once that happens, too.
  • If you need money for renovations, a cash-out refi offers relatively cheap capital. It can make your monthly payments more expensive, but home improvements tend to boost your equity value even more.

Cons of mortgage refinance

  • Refinancing costs money. Closing costs can total 2 percent to 5 percent of the amount of the mortgage, which is why it’s so important to make sure you’ll recoup those costs before you move.
  • If you refinance from a 30-year loan to another 30-year loan, you’ll extend your repayment period. A new loan restarts the repayment clock.

Should you refinance your mortgage?

You might refinance your mortgage to save money on monthly payments, pay off your loan faster or take out cash. You might decide refinancing makes sense if you can:

  • Lower your interest rate: If interest rates have dropped since you first obtained your mortgage, a rate-and-term refinance can provide you with a lower rate.
  • Consolidate high-interest debt: You can use a cash-out refinance to tap your home’s equity and lower or pay off high-interest debt. Whether it’s credit card balances or other forms of debt, using the cash-out funds could save you several thousands of dollars in interest.
  • Eliminate private mortgage insurance: If your home’s value has increased, you could refinance to get out of paying private mortgage insurance (PMI) on a conventional loan or mortgage insurance premiums (MIP) on an FHA loan.
  • Change your loan term: If you’re struggling to make your monthly mortgage payments, you can refinance to get a longer loan term, which might translate to a smaller monthly payment. If you want to pay down the mortgage faster, you could refinance into a 15- or 20-year loan.

Mortgage refinance FAQ

Written by: Jeff Ostrowski, Senior Mortgage Reporter for Bankrate

Jeff Ostrowski covers mortgages and the housing market. Before joining Bankrate in 2020, he wrote about real estate and the economy for the Palm Beach Post and the South Florida Business Journal.

Read more from Jeff Ostrowski

Reviewed by: Greg McBride, Chief Financial Analyst for Bankrate

Greg McBride, CFA, is Senior Vice President, Chief Financial Analyst, for Bankrate.com. He leads a team responsible for researching financial products, providing analysis, and advice on personal finance to a vast consumer audience.

Read more from Greg McBride