Today’s refi rates ratchet higher – January 3, 2022

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2 of 3 benchmark refinance interest rates ticked up today compared to a week ago, according to data compiled by Bankrate..

  • 30-year fixed refinance rate: 3.25%, +0.09 vs. a week ago
  • 15-year fixed refinance rate: 2.51%, +0.06 vs. a week ago
  • 10-year fixed refinance rate: 2.52%, +0.09 vs. a week ago

Here’s a pro tip: Getting multiple offers can save you thousands of dollars over the life of your mortgage. “The extra effort of comparison shopping among lenders and putting in an extra application or two can pay dividends for years with a lower rate and savings on fees,” says Greg McBride, CFA, Bankrate chief financial analyst.

30-year fixed refinance

The average 30-year fixed-refinance rate is 3.25 percent, up 9 basis points compared with a week ago. A month ago, the average rate on a 30-year fixed refinance was lower, at 3.17 percent.

At the current average rate, you’ll pay $434.66 per month in principal and interest for every $100,000 you borrow. That’s an increase of $6.56 over what you would have paid last week.

You can use Bankrate’s mortgage calculator to get a handle on what your monthly payments would be and see what the effects of making extra payments would be. It will also help you calculate how much interest you’ll pay over the life of the loan.

15-year fixed refinance

The average for a 15-year refi is currently running at 2.51 percent, up 6 basis points from a week ago.

Monthly payments on a 15-year fixed refinance at that rate will cost around $396 per $100,000 borrowed. That may put more pressure on your monthly budget than a 30-year mortgage would, but it comes with some big advantages: You’ll save thousands of dollars over the life of the loan in total interest paid and build equity much faster.

10-year fixed refinance

The average rate for a 10-year fixed-refinance loan is 2.52 percent, up 9 basis points over the last seven days.

Monthly payments on a 10-year fixed-rate refi at 2.52 percent would cost $396.16 per month for every $100,000 you borrow. As you can see, the hefty savings in interest costs you’ll reap with that short 10-year term comes with the downside of a much larger monthly payment.

What does it mean to refinance your mortgage?

Refinancing your mortgage means taking out a new home loan. In the process, you’ll fully pay off your existing loan, and then start payments on a new one. The two most prevalent kinds of mortgage refinances are rate-and-term changes — which result in a new interest rate and a reset payment clock — and cash-out refinances. Cash-out refinances allow homeowners to take advantage of their home equity by taking out a new mortgage with a larger principal based on the home’s current value.

30-year refi? 15-year refi? Which is right for me?

No matter what kind of refinance you decide to undertake, once you close on your new loan, the payment clock goes back to zero. For example, if you take out a new 30-year mortgage, you’ll have another 30 years of payments in front of you.

That said, a 30-year refinance is the right choice for a lot of people. Extending the term of your loan means lower monthly payments, which can free up some extra funds if money is tight.

A 15-year mortgage refinance has some advantages, too, namely that you pay a lot less interest over the life of the loan. 15-year mortgages tend to charge lower rates than 30-year mortgages, and they also have a shorter repayment window, so the overall savings can be significant. Remember, though, that a short repayment window is a double-edged sword. It does help you save in the long term, but with less time to pay, 15-year mortgages have higher monthly payments.

Here are sample payments on a $300,000 mortgage at 3 percent interest:

Term Monthly payment Total cost
30-year $1,265 $455,332
15-year $2,072 $372,914

What will a refinance cost?

Refinance costs can change based on where you’re located, the lender you’re working with and a number of other factors. The general rule of thumb, however, is that costs are around 2 to 5 percent of the loan’s principal amount. On a $300,000 mortgage, that means $6,000 to $15,000 in closing costs.

Can I save money with a refinance? Is now a good time to refi?

Yes, depending on your situation. Especially with mortgage rates currently around all-time lows, it’s a great time to refinance. If you have a loan that you’ve been holding since before 2020, you’re almost guaranteed to be able to refinance to a lower-cost loan. That can mean significant savings each month and over the life of the loan, so it’s worth looking into.

Remember, however, you’ll want to calculate your break-even timeline. If you’re planning to move soon, you may not save enough to recoup your closing costs before you do.

Where are refi rates headed?

Since the beginning of the coronavirus pandemic in 2020, rates have been hovering around historic lows. Experts have been warning that this trend can’t last forever, and most expect rates to finish 2021 higher and on an upward trend.

Nearer term, however, borrowers have caught another reprieve. With the Federal Housing Finance Agency’s announcement that it will end the 0.5 percent fee on most refinances, you can expect rates to hold steady or decrease in the next few weeks.

Meanwhile, Federal Reserve policy seems poised to keep interest rates on bonds low, which could keep mortgage rates favorable into the fall.

To see where Bankrate’s panel of experts expect rates to go from here, check out our Rate Trend Index.

Want to see where rates are right now? See local mortgage rates.

Average mortgage rates
Product Rate Change Last week
30-year fixed refi 3.25% 0.09 3.16%
15-year fixed refi 2.51% 0.06 2.45%
10-year fixed refi 2.52% 0.09 2.43%
Last updated January 3, 2022.

How to shop for a mortgage

Shopping around is crucial to get the best deal on your mortgage. Make sure to get quotes from at least three lenders, and pay attention not just to the interest rate but also to the fees they charge and other terms. Sometimes it’s a better deal to choose a slightly higher interest loan if the other aspects are favorable.

Steps to get the best mortgage rate

  • Shop around
  • Do your homework to understand the mortgage market in your area
  • Consider working with a mortgage broker
  • Don’t try to time the market — rates change nearly constantly, and you could lose out on a good deal if you wait

Minimum credit scores for different kinds of mortgages

Different mortgages have different minimum requirements for their borrowers. Although lenders are free to adjust these requirements as they please, here are the most common credit score minimums for various mortgage types:

If your credit score is less than 500, work on improving it before applying for a mortgage, because most lenders won’t issue a loan to someone with a score of 499 or lower. However, if your credit score is higher than these minimums, you may be able to secure a better interest rate.

Methodology: The rates you see above are Bankrate.com Site Averages. These calculations are run after the close of the previous business day and include rates and/or yields we have collected that day for a specific banking product. Bankrate.com site averages tend to be volatile — they help consumers see the movement of rates day to day. The institutions included in the “Bankrate.com Site Average” tables will be different from one day to the next, depending on which institutions’ rates we gather on a particular day for presentation on the site.

To learn more about the different rate averages Bankrate publishes, see “Understanding Bankrate’s Rate Averages.”

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Learn more about specific loan type rates
Product Purchase Rates Refinance Rates
The index above links out to loan-specific pagesto help our readers learn more about rates by product type.
30-Year Loan Today’s 30-Year Mortgage Rates 30-Year Refinance Rates
20-Year Loan 20-Year Fixed Mortgage Rates 20-Year Mortgage Refinance Rates
15-Year Loan Current 15 Year Mortgage Rates 15-Year Refi Interest Rates
10-Year Loan 10-Year Mortgage Interest Rates Current 10-Year Refinance Rates
FHA Loan Current FHA Mortgage Rates FHA Refinance Rates
VA Loan VA Loan Rates Current VA Refinance Rates
ARM Loan ARM Mortgage Rates ARM Refi Mortage Rates
Jumbo Loan Jumbo Loan Rates Jumbo Refinance Rates