Today's 30-year mortgage refinance rates sink to 5-day low | Jan. 13, 2022

Check out the mortgage refinancing rates for Jan. 13, 2022, which are mostly down from yesterday. (iStock)

Based on data compiled by Credible, current mortgage refinance rates fell for three terms and held steady for one mid-length term compared to yesterday.  

  • 30-year fixed-rate refinance: 3.375%, down from 3.440%, -0.065
  • 20-year fixed-rate refinance: 3.250%, unchanged
  • 15-year fixed-rate refinance: 2.625%, down from 3.125%, -0.500
  • 10-year fixed-rate refinance: 2.625%, down from 3.125%, -0.500

Rates last updated on Jan. 13, 2022. These rates are based on the assumptions shown here. Actual rates may vary.

After steadily increasing over the past few months, today’s mortgage refinance rates showed significant drops. Rates for a 30-year fixed-rate refinance are the lowest they’ve been since Jan. 7. Homeowners who have been considering a refinance might want to lock in one of these lower rates today before rates start to rise again. Whether they choose to refinance into a longer or shorter term, homeowners have ample opportunity to save on interest over the life of their mortgage loan.

 

These rates are based on the assumptions shown here. Actual rates may vary.

If you’re thinking of refinancing your home mortgage, consider using Credible. Whether you're interested in saving money on your monthly mortgage payments or considering a cash-out refinance, 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.

Current 30-year fixed refinance rates

The current rate for a 30-year fixed-rate refinance is 3.375%. This is down from yesterday. Refinancing a 30-year mortgage into a new 30-year mortgage could lower your interest rate, but may not have much effect on your total interest costs or monthly payment. Refinancing a shorter term mortgage into a 30-year refinance could result in a lower monthly payment but higher total interest costs.

Current 20-year fixed refinance rates

The current rate for a 20-year fixed-rate refinance is 3.250%. This is the same as yesterday. By refinancing a 30-year loan into a 20-year refinance, you could secure a lower interest rate and reduce total interest costs over the life of your mortgage. But you may get a higher monthly payment.

Current 15-year fixed refinance rates

The current rate for a 15-year fixed-rate refinance is 2.625%. This is down from yesterday. A 15-year refinance could be a good choice for homeowners looking to strike a balance between lowering interest costs and retaining a manageable monthly payment.

Current 10-year fixed refinance rates

The current rate for a 10-year fixed-rate refinance is 2.625%. This is down from yesterday. A 10-year refinance will help you pay off your mortgage sooner and maximize your interest savings. But you could also end up with a bigger monthly mortgage payment.

You can explore your mortgage refinance options in minutes by visiting Credible to compare rates and lenders. Check out Credible and get prequalified today.

Rates last updated on Jan. 13, 2022. These rates are based on the assumptions shown here. Actual rates may vary.

Are refinance rates higher than purchase rates?

Refinance rates are generally higher than rates for new mortgages to buy a house. Here are some factors that influence the higher rates: 

  • Risk — A borrower who refinances into a shorter term to get a lower interest rate and pay off their loan sooner may end up with a higher monthly payment. That higher payment could translate into an elevated risk of default. Likewise, in cash-out refinances, the borrower’s debt-to-income ratio rises — and possibly their risk of defaulting.
  • Revenue — A lender may be able to make more money off a purchase loan than a refinance. Many homebuyers choose longer terms for purchase mortgages, which come with higher interest rates. Refinancing into a shorter term and/or lower interest rate reduces the amount of interest the lender makes over the life of a loan.
  • Costs — Refinancing a mortgage comes with many of the same closing costs you’ll face when you take out a new mortgage, such as an appraisal, attorney fees and more. Closing on a refinance also has costs for the lender. But whereas the lower interest rate and shorter term you get with a refinance benefits you financially, the lender will make less in interest over the life of the refinanced loan.
  • Your credit — Hopefully, your credit continues to improve once you become a homeowner. But that’s not always the case for everyone. A homeowner whose credit score has actually fallen since they initially bought the house may look like a bigger risk to lenders — who may charge a higher interest rate to offset the perceived risk.

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

How much equity do I need to refinance my home?

When you apply for a refinance mortgage, lenders will consider how much equity you currently have in your home. If you don’t meet the lender’s equity requirements, you may not qualify for a refinance with that lender.

Requirements can vary from lender to lender, and depend on the type of refinance you’re doing — rate-and-term vs. cash-out refinance. 

For a rate-and-term refinance, you may be able to qualify with as little as 5% home equity. But your lender will likely require you to purchase private mortgage insurance. Most lenders will prefer a loan-to-value ratio of at least 20% — meaning the amount you owe on your mortgage is no more than 80% of your home’s total value.

Generally, for a cash-out refinance, most lenders will want to see that you have a loan-to-value ratio, or LTV, of at least 20%. But some lenders may be flexible if you have good credit, a history of on-time bill payments and are willing to accept a higher interest rate.

To calculate your loan-to-value ratio, simply divide your loan balance by the current value of your home. For example, if your home’s value is $350,000 and you owe $325,000, your LTV is just under 93% — and you may have difficulty qualifying for a refinance.

Credible is also partnered with a home insurance broker. If you're looking for a better rate on home insurance and are considering switching providers, consider using an online broker. You can compare quotes from top-rated insurance carriers in your area — it's fast, easy and the whole process can be completed entirely online.

If you think refinancing is the right move, consider using Credible. You can use Credible's free online tool to easily compare multiple mortgage refinance lenders and see prequalified rates in as little as three minutes.

Rates last updated on Jan. 13, 2022. These rates are based on the assumptions shown here. Actual rates may vary.

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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