Refinancing rate for May 26, 2022: rates are lower
Many benchmark refinance rates fell today, continuing a recent downward trend. 15-year and 30-year fixed refinancing saw their average rates fall. The average 10-year fixed refinancing rate also fell.
Although refinance rates fluctuate slightly on a daily basis, homeowners can expect to see rates increase over the course of this year. Over the past few months, rates have trended higher from historic lows seen during the pandemic and are now closer to 2018 rate levels. This means that if you are looking to cut dollars and interest from your current monthly mortgage payments, these could be the lowest rates of 2022. Be sure to think about your goals and situation, and compare offers to find a lender who can meet your needs. .
30-year fixed rate refinancing
The current average interest rate for a 30-year refinance is 5.26%, down 20 basis points from the same period last week. (One basis point equals 0.01%.) A 30-year fixed refinance will generally have lower monthly payments than a 15- or 10-year refinance. If you’re currently having trouble making your monthly payments, a 30-year refinance might be a good option for you. However, the interest rates for a 30 year refinance will generally be higher than the rates for a 15 or 10 year refinance. It will also take you longer to repay your loan.
15-year fixed-rate refinancing
For 15-year fixed refinances, the average rate is currently 4.57%, down 19 basis points from a week ago. Refinancing a 15-year fixed loan from a 30-year fixed loan will likely increase your monthly payment. But you’ll save more money over time because you pay off your loan faster. You’ll also typically get lower interest rates than a 30-year loan. This can help you save even more in the long run.
10-year fixed rate refinancing
For 10-year fixed refinances, the average rate is currently 4.51%, down 22 basis points from last week. You’ll pay more each month with a 10-year fixed refinance compared to a 30- or 15-year refinance, but you’ll also get a lower interest rate. A 10-year refinance can be a great deal because paying off your home sooner will help you save on long-term interest. But you need to confirm that you can afford a higher monthly payment by evaluating your budget and your overall financial situation.
Where are the rates going
At the start of the pandemic, refinance rates fell to historic lows, but now interest rates are hovering around pre-pandemic levels. The Federal Reserve recently raised rates for the second time in 2022 and plans to raise them several times over the course of the year. Given this policy, along with strong economic growth and inflation, which is at its highest level in four decades, rates should continue to rise this year. Although there have been some temporary interest rate cuts, it is impossible to predict when another cut might occur. This means it’s a good idea to try to take advantage of the refinance now and lock in a decent rate.
We track refinance rate trends using information collected by Bankrate, which is owned by CNET’s parent company. Here is a table with the average refinance rates provided by lenders nationwide:
Average refinancing interest rate
|Product||Assess||A week ago||To change|
|30-year fixed refi||5.26%||5.46%||-0.20|
|15-year fixed refi||4.57%||4.76%||-0.19|
|10-year fixed refi||4.51%||4.73%||-0.22|
Rates as of May 26, 2022.
How to find the best refinance rate
It is important to understand that prices advertised online may not apply to you. Market conditions are not the only factor in interest rates; your particular application and your credit history will also play an important role.
Having a high credit score, a low rate of credit utilization, and a history of regular, on-time payments will generally help you get the best interest rates. To get your personalized refinance rates, you’ll need to speak with a mortgage professional, as the rates you qualify for may differ from the rates advertised online. You also need to consider fees and closing costs that could outweigh the potential savings from a refinance.
You should also be aware that many lenders have had stricter loan approval requirements in recent months. This means that if you don’t have great credit, you may not be able to take advantage of lower interest rates – or qualify for a refinance in the first place.
One way to get the best refinance rates is to strengthen your borrower application. The best way to improve your credit rating is to get your finances in order, use credit responsibly, and monitor your credit regularly. You should also shop around with multiple lenders and compare offers to ensure you get the best rate.
When to Consider a Mortgage Refinance
Most people refinance because market interest rates are lower than their current rates or because they want to change the term of their loan. It is true that over the past year, interest rates have reached a historic low. But when deciding to refinance, be sure to consider factors other than market interest rates.
Refinancing may not always make financial sense. Consider your personal goals and financial situation. How long do you plan to stay at home? Are you refinancing to lower your monthly payment, pay off your home sooner – or for a combination of reasons? And don’t forget fees and closing costs, which can add up.
Some lenders have tightened their requirements in recent months, so you may not be able to get refinance at posted interest rates — or even refinance at all — if you don’t meet their standards. Refinancing can be a great decision if you get a good rate or can pay off your loan sooner, but think carefully if it’s the right choice for you.