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Compare today’s refinance rates

On Wednesday, October 04, 2023, the national average 30-year fixed refinance APR is 8.08%. The average 15-year fixed refinance APR is 7.21%, according to Bankrate's latest survey of the nation's largest refinance lenders.

On Wednesday, October 04, 2023, the national average 30-year fixed refinance APR is 8.08%. The average 15-year fixed refinance APR is 7.21%, according to Bankrate's latest survey of the nation's largest refinance lenders.

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Mortgage refinance industry insights

Rock-bottom rates made the decision to refinance a no-brainer in 2020 and 2021. Those days are long past. Mortgage rates are now at their highest point since the year 2000, and as a result, refinances make up just a small share of loans today. These have been mostly cash-out refinances, a type of loan that replaces your existing loan with a new, bigger mortgage 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.

Current mortgage and refinance interest rates

Product Interest Rate APR
30-Year Fixed Rate 8.06% 8.08%
20-Year Fixed Rate 8.10% 8.12%
15-Year Fixed Rate 7.17% 7.21%
10-Year Fixed Rate 6.95% 6.99%
5-1 ARM 6.78% 7.99%
10-1 ARM 7.31% 8.18%
30-Year Fixed Rate FHA 7.23% 8.19%
30-Year Fixed Rate VA 7.36% 7.58%
30-Year Fixed Rate Jumbo 8.13% 8.15%

Rates as of Wednesday, October 04, 2023 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.)

Common reasons why to 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.

How to refinance your mortgage in 5 steps

If you can get an adequately lower rate, refinancing can save you a substantial amount in interest charges, but it does require some work. The steps include:

1. Check your credit score

A better credit score will help you secure a better rate and make your refinance even more cost-effective. If you're not happy with your credit score or the rates you're being quoted, work on boosting your credit first, then try to refinance again once you've improved it. Typically, mortgage lenders want to see a credit score of 620 or better for a refinance, but there are some refinance options if you have poor credit, including streamline programs. You can improve your credit score by reducing your credit utilization ratio (the proportion of credit you’re using compared to your credit limit) and paying down your highest-interest or highest-payment debt.

2. Calculate the cost vs. savings of refinancing

One of the most important factors in refinancing is figuring out your break-even timeline. A refi usually comes with upfront costs at the closing, just like an initial mortgage, and those can add up. If you're not planning to stay in your current home for more than a few years, the savings you get from a lower rate might not outweigh those costs before you move. Bankrate's refinance breakeven calculator can help you figure out this timeline.

3. Find the best refinance rates today

It's just as important to shop around when you refinance as it was when you applied for your first mortgage. Explore refinance offers from at least three mortgage lenders (your bank or current lender might be good places to start), and keep an eye on rates while you comparison-shop — this can help you decide when to lock in a rate. Check out Bankrate's lender reviews, as well, to help guide your decision.

Compare the best mortgage refinance lenders.

4. Get your paperwork in order

Once you've identified a lender, find out what paperwork you need in order to complete a refinance application. Among the requirements, your lender will want to review tax returns, pay stubs, W-2s and other proof of income, as well as documentation about any assets such as savings.

5. Prepare for closing on your mortgage refinance

Refinancing isn't quite as hard as shopping for a house, but it still takes some time. While your new loan is processing, don't open new credit accounts or make other large purchases. Doing so can derail your application.

Here’s how to get the best refinance rate.

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.

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 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