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With a 30-year mortgage refinance, you take out a new loan for the amount of your current mortgage and use it to pay off your existing debt. The new mortgage has different repayment terms, including interest rate, monthly payment, and a 30-year term.
Lower interest rate
When you refinance, you might be able to qualify for a lower interest rate on your mortgage. Over time, that lower rate can help you save money.
Smaller monthly payment
If you opt for a 30-year loan term, you might be able to reduce your monthly payments, giving yourself more breathing room in your budget.
30-year fixed mortgage rates never change. That can be a big relief when compared to adjustable-rate mortgages (ARMs), which can fluctuate a great deal.
What Is a Mortgage Rate and How Do They Work?
With a longer loan term, there’s more time for interest to accrue. Over the length of your loan, you might pay more in interest charges than you would with a shorter refinancing term.
Like your original mortgage, refinancing a mortgage comes with closing costs which could add up to thousands of dollars.
If you want to refinance your home mortgage to a 30-year refinance loan to take advantage of lower interest rates, compare rates from multiple lenders before submitting your application. Interest rates and loan terms can vary widely from lender to lender, so use Credible to compare mortgage rates from several lenders at once.
Home refinance rates rise and fall on a daily basis with changing economic conditions, central bank policy decisions, and investor sentiment. The table below shows recent trends in home refinance rates.
General Information and Rate Disclosures:
The listings that appear on this page are from companies that pay Credible compensation. This table does not include all companies or all available products. Displayed information is valid as of Sep 30, 2022 and assumes a customer with a 740 credit score borrowing a conventional loan for a single-family, primary residence, at or near zero discount points, and a 80% loan-to-home-value ratio. For products indicated as a jumbo (e.g. 30-year fixed jumbo rate), displayed information follows the same assumptions as a conventional loan but set at loan above the conforming limit.
The IP address of the customer accessing this page has been used to determine which U.S state should be used for pricing. In states where Credible does not have a license, we are providing information about rates available in a nearby state. If you are viewing this page from an IP address in one of the states where Credible is not licensed, the rates displayed above are for consumers located in the neighboring state shown below:
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New York - New Jersey
Rates, payments, and all information displayed are for informational purposes only and are subject to change without notice. This is not a credit decision or commitment to lend. Mortgage rates and terms you may qualify for depend on your individual financial circumstances.
All monthly payment amounts above assume on time monthly payments each month for the full duration of the loan term (e.g. 360 monthly payments for a 30 year loan). Displayed monthly payment amounts do not include amounts for property taxes and hazard insurance. Your actual monthly payment obligation will be higher. Amounts for borrower-paid mortgage insurance premiums are included in the monthly payment if (1) the loan amount is below the “conforming thresholds” set by Fannie Mae and Freddie Mac, and (2) the loan-to-home-value ratio is greater than 80%; mortgage insurance premiums are excluded from the monthly payment if either the loan amount is above the conforming thresholds or the loan-to-home-value ratio is less than or equal to 80%. Your actual payment obligation may be higher. “Conforming thresholds” depend on the county where the property is located.
The APRs displayed above incorporate estimates of loan costs and closing costs you may pay in connection with a mortgage transaction with the assumptions above. This includes fees the lender charges, including points and underwriting fees, and third party services the lender does not let you shop for such as a flood certification fee. It does not include title charges, recording costs, prepaids, initial escrow deposit, and other fees.
Variable rate products, such as ARMs, have interest rates that can change over the life of the loan. Changes in the interest rate will cause required payment amounts to change.” The displayed rate and payment will be in effect for the number of years in the product’s description (e.g. 5/1 ARM means the initial rate and payment are in effect for 5 years, 7/1 means they are in effect for 7 years, etc.), after which the rate and monthly payment will change every 12 months.
Displayed rates are available through Credible Operations, Inc., NMLS #1681276
Last updated on Sep 30, 2022. These rates are based on the assumptions shown here. Actual rates may vary.
If your credit has improved since you originally took out a mortgage, or if the market has changed and interest rates have decreased, refinancing your 30-year fixed mortgage can be a smart decision. You can qualify for a lower interest rate, allowing you to save thousands over the length of your loan.
CALCULATORS & TOOLS
How a cash-out mortgage refinance works
Cash-out refinancing allows you to take money out of your home equity by refinancing your current mortgage for an amount that is greater than your existing loan and the refinancing loan’s closing costs. Find out more about how a cash-out refinance works.
How to refinance your mortgage
Refinancing your mortgage can be much simpler than the process you went through when you bought your home. Here’s how to refinance your mortgage — and everything you need to know before you do.
When to refinance your mortgage
If you own a home, it’s a good idea to reassess your mortgage periodically to see if you can find a better deal elsewhere. Check out some of the reasons refinancing your mortgage could be a good idea.
How to get the best mortgage refinance rates
You really have to do your research if you want to get the best mortgage refinance rate. We’ll take some of the burden off you by doing most of the legwork so you can find the best rate for your situation.
As a Credible authority on mortgages, Chris Jennings covers topics including home loans and mortgage refinancing. His work has appeared in Fox Business and GOBankingRates.
The lowest 30-year fixed refinance rate was in December 2020 at approximately 2.68%, according to historical data from Freddie Mac.
Regardless of how low current refinance rates are, it’s always wise to compare rates from several lenders. Minimizing your APR is an easy way to save money with fewer lifetime loan costs.
A good refinance rate is one that’s significantly lower than your current one. When you refinance, you’ll want to aim for a rate that’s at least one percentage point lower than your current rate. This will provide you with meaningful monthly savings and allow you to break even on your closing costs in a reasonable amount of time.
Today’s 30-year refinance rates are approximately 3%, and they’ve been slowly increasing since reaching a record-low in December 2020. So, if your current mortgage rate is 4% or higher, now might be a good time to refinance.
Typically, the best refinance rates assume you have a credit score of 740 or higher and an 80% loan-to-value ratio (LTV). They also assume you’re refinancing a single-family, primary residence.
It’s vital to compare quotes from several lenders as your rates and closing costs can differ widely. Rate shopping with Credible can help you find a great monthly payment for your circumstances.
The current 10-year Treasury bond rate primarily influences mortgage rates. If the 10-year rate increases, you can expect 30-year refinance rates to rise too.
Unfortunately, rising inflation can cause rates to increase too. As short-term inflation rates are at multi-year highs, experts expect mortgage rates to rise accordingly. In response, you may decide to refinance sooner instead of later if the benefits are worth the cost.
There are a number of other factors that determine the rate you qualify for as well, including:
Credit score: Most lenders require an excellent credit score — typically 740 or higher — to qualify for the lowest rates.
Debt-to-income (DTI) ratio: Minimizing your DTI works in your favor. Your lender may accept a DTI ratio of up to 43%, but many will want to see a lower number.
Discount points: You might consider purchasing mortgage points at closing to reduce your APR and monthly payment.
Down payment: Your lender may offer you a lower interest rate if you’re able to make a larger down payment. Lenders will view you as less of a risk the more you put down.
Loan type: A traditional, rate-and-term refinance can have a lower rate than a cash-out refinance. This is because the latter option is often riskier for the lender due to higher loan amounts.
Refinancing fees: Your lender may allow you to roll some of your closing costs into your new mortgage if you have sufficient equity. While you avoid an upfront expense, you might get saddled with a higher rate and, as a result, pay more in the long run.
Mortgage rates change daily. Be sure to get quotes from multiple lenders to secure the best rate and term when you’re ready to refinance your home loan. Credible simplifies this process and makes comparing multiple lenders easy.
While 30-year mortgages have the highest interest rates, they also come with the longest repayment period and smallest monthly payment. However, if you’re aggressive about paying off your mortgage or getting the lowest refinance rate, a 15-year mortgage can be a great option.
The two main benefits of a 15-year fixed-rate mortgage are:
Paying less interest charges for the life of the loan
Building equity faster
The major downside to 15-year mortgages vs. 30-year mortgages, of course, is the cost — because you only have half the time to pay off your loan, your monthly payment will be higher for a 15-year term than it would be for a 30-year term.
Below is an example of how refinance costs compare between loans with a 15-year term and 30-year term on a $250,000 starting balance. The example assumes an excellent credit score of 740.
|Repayment term||15 Years||30 Years|
|Interest rate (APR)||2.467%||2.999%|
|Monthly principal and interest payment||$1,637.71||$1,037.23|
|Total interest costs||$44,787.80|
If you’re refinancing because you want a lower rate, shorter terms are more likely to offer a better interest rate and APR.
Here is a glance at how refinance rates might differ by term:
|Mortgage term||Interest rate|
There are several factors to consider as you compare refinance rates:
Monthly payment: Choose the monthly payment you can comfortably afford. Don’t forget to include property taxes, insurance, and HOA dues that initial rate quotes may overlook.
Remaining loan balance: A lower interest rate can boost your savings potential when most of your principal remains, even if you stick with a 30-year term.
Estimated ownership period: If you only plan on living in the home for a few years, you might be better off choosing a longer repayment term. In this case, your monthly payment is smaller and you can use the cash difference to save for your next house or pay for home improvements. Refinancing into an adjustable rate mortgage (ARM) is another option to consider.
Refinancing costs and fees: You’ll pay origination fees and appraisal costs just like your home purchase loan. The lender may let you roll some of these charges into the loan, which can affect your new monthly payment or rate.
Choosing a shorter refinance term increases your monthly payment but has several benefits.
Some of the reasons to consider a 10-year, 15-year, or 20-year period include:
Less total interest costs: Shorter terms have lower interest rates and fewer monthly payments. As a result, you’ll pay less in interest over time.
Desire to be debt-free: An accelerated repayment schedule means you can get out of debt sooner. On top of that, you’ll own your home free and clear. No longer having a house payment can greatly improve your finances if you have a limited income.
You can afford other financial goals: If you can continue to save for other life events like retirement, vacations, or a new vehicle, a shorter term can minimize your interest payments. However, 30-year refinance rates may be lower than other consumer loans if you anticipate borrowing money for other large purchases.
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