Are refinance rates higher than mortgage rates to purchase a home?

The rates on refinances compared to purchase loans might vary somewhat, but overall, they’re comparable. You might notice slightly higher refinance rates when they’re in demand. Experts don’t recommend trying to time the market — in other words, waiting for rates to drop — as there are so many variables that can affect rates, making it difficult to accurately predict whether they’ll rise or fall. If you find a rate that will save you money, then it’s a good idea to lock it in so you don’t risk missing out if rates jump.

How much does it cost to refinance?

Closing costs for refinancing your mortgage can run thousands of dollars, usually between 2 percent and 5 percent of the loan amount. These costs also vary by where you live and the lender you choose.

Is it cheaper to refinance with your current lender?

It might not be, but definitely ask. Most mortgages are packaged up and resold as securities, and once that happens, your original lender’s role is limited. There’s little choice but to start over with a new loan. However, if your lender kept the loan in its portfolio, you might be able to adjust the terms of the loan with lower fees and less paperwork than if you were to do a full refi. Another possibility: To encourage customer loyalty, some lenders offer discounts on closing costs for borrowers who refinance.

Current Refinance Rates - Compare Rates Today

Weekly national mortgage interest rate trends

Current refinance rates

	30 year fixed refinance	6.88%
	15 year fixed refinance	6.17%
	10 year fixed refinance	6.11%
	5/1 ARM refinance	6.28%

Current mortgage refinance news

More borrowers now stand to benefit from refinancing their mortgage, spurred in part by the Federal Reserve’s pivot to interest rate cuts in September. The borrowers with the most to gain are those who obtained a mortgage in the past year, when rates were in the 7 percent range.

Experts tell us: Will mortgage rates fall this week?

Today’s refinance rates

Product	Interest Rate	APR
30-Year Fixed Rate	7.01%	7.05%
20-Year Fixed Rate	6.89%	6.94%
15-Year Fixed Rate	6.30%	6.37%
10-Year Fixed Rate	6.11%	6.16%
5-1 ARM	6.21%	6.86%
10-1 ARM	6.43%	7.38%
30-Year Fixed Rate FHA	7.57%	7.61%
30-Year Fixed Rate VA	7.45%	7.48%
30-Year Fixed Rate Jumbo	6.95%	6.99%

Rates as of Thursday, December 26, 2024 at 6:30 AM

Product	Interest Rate	APR
30-Year Fixed Rate	7.05%	7.09%
20-Year Fixed Rate	6.88%	6.93%
15-Year Fixed Rate	6.30%	6.36%
10-Year Fixed Rate	6.14%	6.19%
5-1 ARM	6.14%	6.88%
10-1 ARM	6.46%	7.40%
30-Year Fixed Rate FHA	7.59%	7.63%
30-Year Fixed Rate VA	7.82%	7.84%
30-Year Fixed Rate Jumbo	6.97%	7.02%

Rates as of Thursday, December 26, 2024 at 6:30 AM

Bankrate displays two sets of rate averages produced from two surveys: one daily (“overnight averages”) and one weekly (“Bankrate Monitor averages”).
- Overnight averages: We calculate daily overnight rate averages on various products from several financial institutions. We collect these APRs after close of business, and they reflect the previous day’s pricing based on a borrower with a 740 FICO credit score and an 80 percent loan-to-value (LTV) ratio buying an existing, single-family primary residence.
- Bankrate Monitor (BRM) rate averages: On a weekly basis, we also collect APRs from the 10 largest banks and thrifts in 10 of the biggest U.S. markets. For these averages, we assume a borrower with a 700 FICO credit score (740 if a non-conforming loan) and an 80 percent loan-to-value (LTV) ratio, among other criteria.
The overnight and Bankrate Monitor averages are based on no existing relationship or automatic payments. Learn more about our rate averages, editorial guidelines and how we make money.

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 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.

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

Is now the right time to refinance?

Linda Bell

Senior writer, Home lending

“If you were one of the lucky ones who locked in a 3 to 4 percent rate during the pandemic, refinancing might not make much sense right now. However, if your current mortgage is higher than the prevailing interest rate, refinancing could save you money in the long run by lowering your monthly payments and the total interest paid over the life of your loan.”

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.

Learn more: How to get the best refinance rate

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:

Pros

You can lock in a lower rate, which can reduce your monthly payments and total interest paid.
If your home’s value has increased, you might be able to stop paying for private mortgage insurance (PMI).
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 home’s value.

Cons

Refinance closing costs can equal 2 percent to 5 percent of the amount of the mortgage. As such, it can take several years to realize the savings of a refinance.
If you refinance from a 30-year loan to another 30-year loan, you’ll extend your repayment period.

Learn more: Should you wait until 2025 to refinance?

Mortgage refinance FAQ

The rates on refinances compared to purchase loans might vary somewhat, but overall, they’re comparable. You might notice slightly higher refinance rates when they’re in demand. Experts don’t recommend trying to time the market — in other words, waiting for rates to drop — as there are so many variables that can affect rates, making it difficult to accurately predict whether they’ll rise or fall.

If you find a rate that will save you money, then it’s a good idea to lock it in so you don’t risk missing out if rates jump.
Closing costs for refinancing your mortgage can run thousands of dollars, usually between 2 percent and 5 percent of the loan amount. These costs also vary by where you live and the lender you choose.

Learn more: How much does it cost to refinance a mortgage?
It might not be, but definitely ask. Most mortgages are packaged up and resold as securities, and once that happens, your original lender’s role is limited. There’s little choice but to start over with a new loan. However, if your lender kept the loan in its portfolio, you might be able to adjust the terms of the loan with lower fees and less paperwork than if you were to do a full refi. Another possibility: To encourage customer loyalty, some lenders offer discounts on closing costs for borrowers who refinance.

Learn more: Should you refinance with the same lender?

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.

Compare today’s refinance rates