Compare today’s refinance rates

Current mortgage refinance news - Feb. 20, 2025

The average rate on 30-year mortgage refinances moved down to 7.02 percent as of Feb. 19, according to Bankrate’s weekly survey of lenders. Refinancing can make sense for some homeowners, especially those who have gained equity and want to get out of expensive loans.

But with mortgage rates continuing to hover above 7 percent, refinancing isn’t an attractive proposition for homeowners who aim to tap their home equity. Instead, they’re opting for home equity loans or home equity lines of credit (HELOCs) — the Federal Reserve Bank of New York reported last week that American homeowners had taken nearly $400 billion against their HELOCs as of the end of 2024. 

While rates are no longer shooting up, prospects for a refi boom seem to be fading. Housing economists expected that the Federal Reserve’s shift to interest rate cuts would open new opportunities to refinance, but that scenario hasn’t come to pass.

How to refinance your mortgage

The process of refinancing your mortgage is similar to the first time you applied for one to buy a home. The key difference: You won’t have to pay nearly as much in closing costs. Here’s an overview of the 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. 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 a home purchase mortgage. Our refinance breakeven calculator can help you figure out when you’ll start realizing savings.
4. Estimate your equity: If you want to refinance to a bigger mortgage and take cash out of your home as the difference, it's important to know how much available equity you have. Here's how to calculate your home equity.
5. 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.
6. 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 or debt.
7. Apply: Once you know which lenders you're interested in and have your documents ready, compelte an application to learn your specific refinance rate and terms.

How to get the best refinance rate

If you compare loan offers from a few mortgage lenders, you’ll have a better chance of landing a competitive rate. Here's how:

• Nail down your goals. This will help you decide what term – 30 years, 15 years or something else – is best for you. If your aim is to more quickly pay down your loan, for instance, a shorter term might make more sense.
• Shop around. Get rate quotes from at least three mortgage lenders, ideally on the same day so you have an accurate basis for comparison. Lenders determine your interest rate based on your credit score, debt-to-income (DTI) ratio and other factors.
• Compare the interest rate and APR. The interest rate and annual percentage rate (APR) reflect the cost of the loan. The interest rate is the cost to borrow the funds, while the APR includes the interest rate and other costs such as the origination fee and any points. 
• Consider the lender’s ratings and your experience. Aside from the numbers, evaluate lenders for convenience and responsiveness. Take a look at what other borrowers have had to say about the lender, too.

Should you refinance your mortgage?

Whether you should refinance your mortgage right now depends on a few factors:

• Can you get a significantly lower rate? Refinancing to a lower rate will help you lower your monthly payment and save money over the loan term. 
• Do you want to change your term? Many people also adjust the length of their mortgage when they refinance. Typically this means shortening the term from 30 years to 15 years to pay off the mortgage faster or lengthening the term up to 30 years to reduce the monthly payments.
• Do you want to tap equity? Many people perform a cash-out refinance to turn their home equity into cash by borrowing against it. This cash can then be used to make home renovations, pay college tuition or cover other major expenses.

Once you know the answers to those questions, review the pros and cons:

Refinance resources

• Everything to know about mortgage refinancing
• How to get a low-cost refinance
• Cash-out refinancing: What it is and how it works

Meet our Bankrate experts

Written by: Jeff Ostrowski, Principal Reporter, Mortgages

I cover mortgages and the housing market. Before joining Bankrate in 2020, I spent more than 20 years writing about real estate and the economy for the Palm Beach Post and the South Florida Business Journal. I’ve had a front-row seat for two housing booms and a housing bust. I’ve twice won gold awards from the National Association of Real Estate Editors, and since 2017 I’ve served on the nonprofit’s board of directors.

Read more from Jeff Ostrowski

Edited by: Laurie Richards, Editor, Home Lending

I’ve spent five years in writing and editing roles, and I now focus on mortgage, mortgage relief, homebuying and mortgage refinancing topics. I’m most interested in providing resources for aspiring first-time homeowners to help demystify the homebuying process. In 2021, I earned a Poynter ACES Certificate in Editing. I have an MA in English.

Read more from Laurie Richards

Reviewed by: Greg McBride, CFA, Chief Financial Analyst, Bankrate

Greg McBride is a CFA charterholder with more than a quarter-century of experience in personal finance, including consumer lending prior to coming to Bankrate. Through Bankrate.com's Money Makeover series, he helped consumers plan for retirement, manage debt and develop appropriate investment allocations. He is an accomplished public speaker, has served as a Wall Street Journal Expert Panelist and served on boards in the credit counseling industry for more than a decade and the funding board of the Rose Foundation’s Consumer Financial Education Fund.

Read more from Greg McBride