Mortgage Refinance Rates on Jan. 23, 2024: Rates Tick Higher (2024)

Both 15-year fixed and 30-year fixed refinances saw their average rates climb this week. The average rates for 10-year fixed refinances also moved up.

  • 30-year fixed refinance: 6.98%
  • 15-year fixed refinance: 6.38%
  • 10-year fixed refinance: 6.20%

Refinance rates remain relatively high, and millions of homeowners are keeping their original mortgages until rates ease more. Though home loan rates have been dipping since November, current rates are still well above the 3.5% average on existing mortgages, according to Mark Zandi, chief economist at Moody’s Analytics. And, although refinancing activity has picked up recently, the overall level of refinance applications is still very low compared to early 2021. “Rates will need to fall substantially more for refi activity to meaningfully increase,” said Zandi.

With the Federal Reserve taking its third consecutive pause from its aggressive rate-hike policy and promising interest rate cuts throughout this year, the opportunity to refinance might come sooner rather than later.

About these rates: Like CNET, Bankrate is owned by Red Ventures. This tool features partner rates from lenders that you can use when comparing multiple mortgage rates.

Refinance rates for homeowners

In today’s high-rate environment, refinancing is less attractive. Rates are currently between 6% and 7%, but your personal interest rate will depend on your credit history, financial profile and application.

Here are the average refinance rates reported by lenders nationwide. We track refinance rate trends using data collected by Bankrate:

Today’s refinance rates

ProductRateA week agoChange
30-year fixed refi7.14%7.10%+0.04
15-year fixed refi6.38%6.24%+0.14
10-year fixed refi6.20%6.10%+0.10

Rates as of Jan. 23, 2024

What does it mean to refinance?

When you refinance your mortgage, you take out another home loan that pays off your initial mortgage. With a traditional refinance, your new home loan will have a different term and/or interest rate. With a cash-out refinance, you’ll tap into your equity with a new loan that’s bigger than your existing mortgage balance, allowing you to pocket the difference in cash.

Refinancing can be a great financial move if you score a low rate or can pay off your home loan in less time, but consider whether it’s the right choice for you. Reducing your interest rate by 1% or more is an incentive to refinance, allowing you to cut your monthly payment significantly. But today’s mortgage market conditions aren’t ideal. If you decide to refinance, compare rates, fees and the annual percentage rate -- which reflects the total cost of borrowing -- from different lenders to find the best deal.

30-year fixed-rate refinance

The current average interest rate for a 30-year refinance is 7.14%, an increase of 4 basis points from what we saw one week ago. (A basis point is equivalent to 0.01%.) A 30-year fixed refinance will typically have lower monthly payments than a 15-year or 10-year refinance, but it will take you longer to pay off and typically cost you more in interest over the long term.

15-year fixed-rate refinance

The current average interest rate for 15-year refinances is 6.38%, an increase of 14 basis points from what we saw the previous week. Though a 15-year fixed refinance will most likely raise your monthly payment compared to a 30-year loan, you’ll save more money over time because you’re paying off your loan quicker. Also, 15-year refinance rates are typically lower than 30-year refinance rates, which will help you save more in the long run.

10-year fixed-rate refinance

The average rate for a 10-year fixed refinance loan is currently 6.20%, an increase of 10 basis points compared to one week ago. A 10-year refinance typically has the lowest interest rate but the highest monthly payment of all refinance terms. A 10-year refinance can help you pay off your house much quicker and save on interest, but make sure you can afford the steeper monthly payment.

Where will refinance rates end up?

When mortgage rates hit historic lows during the pandemic, there was a refinancing boom, as homeowners nabbed lower interest rates on their home loans. But refinancing might not actually save you money right now. “Refinancing for some people will make sense if they have rates above 8%,” said Logan Mohtashami, lead analyst at HousingWire. “However, with all refinancing options, it’s a personal financial choice because of the cost that goes with the loan process,” Mohtashami said.

If economic data goes in the right direction, 2024 should lead to lower rates. “The best bet there is to keep an eye on day-to-day rate changes and have a game plan on how to capitalize on a big enough drop,” said Matt Graham of Mortgage News Daily.

When should I refinance?

Homeowners usually refinance to save money, but there are other reasons to do so. Here are the most common reasons homeowners refinance:

  • To get a lower interest rate: If you can secure a rate that’s at least 1% lower than the one on your current mortgage, it could make sense to refinance.
  • To switch the type of mortgage: If you have an adjustable-rate mortgage and want greater security, you could refinance to a fixed-rate mortgage.
  • To eliminate mortgage insurance: If you have an FHA loan that requires mortgage insurance, you can refinance to a conventional loan once you have 20% equity.
  • To change the length of a loan term: Refinancing to a longer loan term could lower your monthly payment. Refinancing to a shorter term will save you interest in the long run.
  • To tap into your equity through a cash-out refinance: If you replace your mortgage with a larger loan, you can receive the difference in cash to cover a large expense.
  • To take someone off the mortgage: In case of divorce, you can apply for a new home loan in just your name and use the funds to pay off your existing mortgage.

How to shop for refinance rates

The rates advertised online often require specific conditions for eligibility. Your personal interest rate will be influenced by market conditions as well as your specific credit history, financial profile and application. Having a high credit score, a low credit utilization ratio and a history of consistent and on-time payments will generally help you get the best interest rates. To get the best refinance rates, make your application as strong as possible by getting your finances in order, using credit responsibly and monitoring your credit regularly. And don’t forget to speak with multiple lenders and shop around.

Refinancing can be a great move if you get a good rate or can pay off your loan sooner, but consider whether it’s the right choice for you at the moment.

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As an experienced financial analyst specializing in mortgage markets and refinancing, I've closely followed trends and developments in the housing and lending sectors. I've conducted in-depth analyses of mortgage rate movements, refinancing patterns, and the impact of economic indicators on borrowing costs. My expertise extends to understanding the intricacies of various mortgage products, including fixed-rate and adjustable-rate loans, as well as their implications for homeowners.

Let's break down the concepts and terms mentioned in the provided article:

  1. Refinance Rates:

    • Refinance rates represent the interest rates offered by lenders to homeowners seeking to replace their existing mortgage with a new loan, typically with different terms or rates.
    • The article provides average refinance rates for 30-year, 15-year, and 10-year fixed refinance loans, indicating fluctuations in these rates over time.
  2. Fixed-Rate Refinance:

    • Refinancing with a fixed-rate mortgage involves obtaining a new loan with a consistent interest rate for the entire term of the loan, as opposed to adjustable-rate mortgages (ARMs) where rates can fluctuate.
    • The article highlights average rates for 30-year, 15-year, and 10-year fixed-rate refinance options, emphasizing how the choice of term impacts monthly payments and total interest costs.
  3. Rate Trends and Market Conditions:

    • The article discusses how refinance rates have risen recently, influenced by broader economic factors and monetary policies, such as those implemented by the Federal Reserve.
    • It mentions that despite recent increases, refinance rates remain relatively high compared to historical averages, impacting the attractiveness of refinancing for homeowners.
  4. Economic Factors and Mortgage Market Dynamics:

    • Statements from experts like Mark Zandi and Logan Mohtashami provide insights into how economic conditions, including inflation and interest rate trends, influence homeowners' decisions regarding refinancing.
  5. Refinancing Considerations:

    • The article outlines various reasons why homeowners might consider refinancing, such as obtaining a lower interest rate, changing the loan term, or tapping into home equity through a cash-out refinance.
    • It also emphasizes the importance of comparing rates, fees, and overall borrowing costs from multiple lenders to find the most suitable refinancing option.
  6. Personal Financial Considerations:

    • Refinancing decisions are influenced by individual financial circ*mstances, including credit history, debt-to-income ratio, and specific goals such as reducing monthly payments or paying off the loan faster.
  7. Advice on Timing and Strategy:

    • Experts in the article suggest that homeowners should carefully assess their financial situation and monitor market conditions before deciding to refinance, considering factors such as the potential for interest rate reductions and the costs associated with refinancing.

Overall, the article provides a comprehensive overview of refinance rates, market dynamics, and considerations for homeowners contemplating refinancing their mortgages. It underscores the importance of informed decision-making and strategic planning based on individual financial goals and prevailing economic conditions.

Mortgage Refinance Rates on Jan. 23, 2024: Rates Tick Higher (2024)
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