30-year mortgage refinance rates plunge to 3-week low | May 5, 2022

Check out the mortgage refinancing rates for May 5, 2022, which are down from yesterday. (Credible)

Based on data compiled by Credible, mortgage refinance rates have fallen for three key terms and remained unchanged for one other term since yesterday.

  • 30-year fixed-rate refinance: 5.125%, down from 5.375%, -0.250
  • 20-year fixed-rate refinance: 5.375%, down from 5.500%, -0.125
  • 15-year fixed-rate refinance: 4.625%, down from 4.875%, -0.250
  • 10-year fixed-rate refinance: 4.750%, unchanged

Rates last updated on May 5, 2022. These rates are based on the assumptions shown here. Actual rates may vary.

If you’re thinking of doing a cash-out refinance or refinancing your home mortgage to lower your interest rate, consider using Credible. Credible's free online tool will let you compare rates from multiple mortgage lenders. You can see prequalified rates in as little as three minutes.

What this means: Mortgage refinance rates dropped across three terms today, with 30- and 15-year terms falling by a quarter of a percentage point. But with the Federal Reserve’s Wednesday announcement of another increase in the federal funds rate, mortgage rates will almost certainly go higher in the near future. Today might be homeowners’ best opportunity to lock in a relatively low 30-year refinance rate. 

WHAT IS CASH-OUT REFINANCING AND HOW DOES IT WORK?

How mortgage rates have changed over time

Today’s mortgage interest rates are well below the highest annual average rate recorded by Freddie Mac — 16.63% in 1981. A year before the COVID-19 pandemic upended economies across the world, the average interest rate for a 30-year fixed-rate mortgage for 2019 was 3.94%. The average rate for 2021 was 2.96%, the lowest annual average in 30 years.

The historic drop in interest rates means homeowners who have mortgages from 2019 and older could potentially realize significant interest savings by refinancing with one of today’s lower interest rates.

If you’re ready to take advantage of current mortgage refinance rates that are below average historical lows, you can use Credible to check rates from multiple lenders.

How to get your lowest mortgage refinance rate

If you’re interested in refinancing your mortgage, improving your credit score and paying down any other debt could secure you a lower rate. It’s also a good idea to compare rates from different lenders if you're hoping to refinance so you can find the best rate for your situation. 

Borrowers can save $1,500 on average over the life of their loan by shopping for just one additional rate quote, and an average of $3,000 by comparing five rate quotes, according to research from Freddie Mac

Be sure to shop around and compare current mortgage rates from multiple mortgage lenders if you decide to refinance your mortgage. You can do this easily with Credible’s free online tool and see your prequalified rates in only three minutes.

How does Credible calculate refinance rates?

Changing economic conditions, central bank policy decisions, investor sentiment and other factors influence the movement of mortgage refinance rates. Credible average mortgage refinance rates reported in this article are calculated based on information provided by partner lenders who pay compensation to Credible.

The rates assume a borrower has a 740 credit score and is borrowing a conventional loan for a single-family home that will be their primary residence. The rates also assume no (or very low) discount points and a down payment of 20%.

Credible mortgage refinance rates reported here will only give you an idea of current average rates. The rate you receive can vary based on a number of factors.

Think it might be the right time to refinance? Be sure to shop around and compare rates with multiple mortgage lenders. You can do this easily with Credible and see your prequalified rates in only three minutes.

How to find the best refinance rate

Some factors that affect the refinance rate you’ll get are out of your control. But you can take several steps to ensure you secure the best refinance rate available to you. Here are some to consider.

Save for closing costs

In addition to saving for a down payment, it’s also a good idea to save up for closing costs, which — according to Freddie Mac — can average $5,000. 

Polish your credit

Just as when you bought your home, your credit score and history affect your refinance rate, so it’s a good idea to make sure your credit is in the best possible shape.

Check your credit report for any errors, such as incorrect information of duplicated accounts. Pay off as much other debt as you can to improve your debt-to-income ratio. And pay down credit card balances to reduce your credit utilization.

Comparison shop

Just as you would compare quotes from multiple vendors for an expensive home repair, you should look at loans and mortgage interest rates from multiple lenders. In fact, getting five rate quotes could save you $3,000 over the life of your mortgage, according to a Freddie Mac survey.

Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

As a Credible authority on mortgages and personal finance, Chris Jennings has covered topics that include mortgage loans, mortgage refinancing, and more. He’s been an editor and editorial assistant in the online personal finance space for four years. His work has been featured by MSN, AOL, Yahoo Finance, and more.

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