Today’s Mortgage Refinance Rates, June 9, 2022 | Rates Stay Higher Than 5.5% – NextAdvisorJune 17, 2022
Jason Stauffer is a journalist based in Chicago covering personal finance for NextAdvisor. His previous work includes…
Today, a number of notable mortgage refinance rates advanced.
Both the 15-year fixed and 30-year fixed saw their average rates go higher. And average rates for 10-year fixed refinances also saw growth.
Throughout the first months of 2022 refinance rates have been on a tear, increasing dramatically. The Federal Reserve has already increased short-term rates twice this year, with more raises to come.
In the current financial climate, homeowners should carefully consider whether it’s the right time to refinance. Right now, homeowners may struggle to find an interest rate low enough for refinancing to make sense. However, the interest rate you are eligible for shouldn’t be the only factor behind your decision. The fees you pay to close a home loan matter, and can add up to thousands of dollars.
Let’s take a look at where refi rates are and what it means for you.
The average mortgage refinance rates are as follows:
Check out mortgage refinancing rates for your area here.
The annual inflation rate came in it at 8.3% in April, according to the data from the Bureau of Labor Statistics. It still puts it at the level of the 40-year highs we’ve experienced the past few months. And that’s bad news for refinance rates.
To fight high inflation the Federal Reserve has been raising short-term interest rates. On top of that, there is more trouble brewing for the global supply chain. Russia’s invasion of Ukraine and China’s latest round of COVID lockdowns threaten to add to the rising inflation we are currently experiencing. And we haven’t even started to feel these supply shocks, “it’s going to take months for those disruptions to seep fully into the supply chain,” Lindsey Piegza, chief economist at Stifel Financial told NextAdvisor.
If we end up with high inflation for an extended period of time, then the chances that the Federal Reserve dramatically increases rates goes up.
A rate and term refinance can save you money in the long run, but typically you’ll want the new rate to be at least 0.75% to 1% below your current rate. That said, the recent spike in refinance rates has drastically reduced the number of homeowners with interest rates that are well above today’s average rates.
In this hot housing market, the ability to turn the equity in your home into cash with a home equity line of credit (HELOC) has become increasingly popular. In some situations, a HELOC can make sense, especially when consolidating debt or remodeling your home.
Even with refi rates climbing higher than they have been in recent history, they still fall within normal historical trends. It might be a good idea to refinance if your current interest rate is higher than today’s rates.
The historical rate trends shown in this chart reference data complied by Freddie Mac. NextAdvisor typically uses rate information collected by Bankrate. Although these mortgage rate surveys differ, they tend to show the same trends.
When you choose to refinance your existing home loan, you’ll typically pay upfront fees known as closing costs. Fees can average 3% to 6% of your loan balance so it’s important to pay attention to them. A refinance may cut your monthly payment, just make sure that you plan on keeping the loan long enough for the ongoing savings to surpass the out-of-pocket costs.
Right now, the average 30-year fixed refinance has an interest rate of 5.53%, an increase of 11 basis points over the previous week.
You can use our mortgage calculator to price out your monthly mortgage payments and to understand how paying more each month will impact your mortgage. Our mortgage calculator will also show you how much interest you’ll be charged over the entire loan term.
Currently, the average rate for a 15-year fixed refinance loan is 4.75%, an increase of 13 basis points over the previous week.
Monthly payments on a 15-year refinance loan will be bigger compared to a 30-year refinance at the same rate. However, a shorter loan term can help you build up equity in your home much more quickly.
The average 10-year, fixed refinance rate is 4.66%, an increase of 9 basis points from a week ago.
Monthly payments with a 10-year refinance term would cost even more than what you’d pay on a 15-year loan. The upside is you’d end up paying even less interest over the life of the loan.
The table below shows where refinance rates were headed in the last week.
These refinance interest rates are provided by Bankrate. The information is based on consumers that fit a certain profile, such as the home is an owner occupied single family residence. If your personal situation doesn’t meet or exceed the standards of this survey, then it’s likely you’ll end up with a refi rate higher than what’s listed..
Bankrate is owned by Red Ventures, Nextadvisor’s parent company.
Rates as of June 9, 2022.
Take a look at mortgage refinance rates for a number of different loans.
Enter your current loan amount and other loan information into NextAdvisor’s mortgage refinance calculator to see if refinancing is right for you.
Whether or not you refinance isn’t dependent on just the numbers, such as the refinance rate. Your personal circumstances are also an important consideration. Consider whether or not refinancing fits into your life plans and financial desires
Generally speaking, refinancing makes sense if you can lower your interest rate by 1% or more. But sometimes the purpose of a refinance isn’t to reduce your mortgage rate. Opening a home equity line of credit has grown in popularity recently as homeowners have decided to capitalize on increasing home values. The money you receive from a HELOC can be used for anything, but HELOCs usually have higher interest rates than other mortgage loans. So it’s important to have a plan before you decided to take on more debt.
Overall, now is still an excellent time to refinance as long as it make sense for your situation.
Mortgage refinance rates vary depending on your personal financial situation. If you have a higher credit score and better loan-to-value (LTV) ratios will typically be able to obtain better refinance rates.
Your situation isn’t the only thing that will impact the refinance rates you’re offered. Your property’s value compared to your loan balance also factors into the decision. You want to have at least 20% equity, or a loan-to-value ratio of 80% or less.
Even the mortgage itself has an affect on your refinance rate. A shorter-term refinance loan usually has better refinance rates than a loan with longer terms. Also, if you want to turn your equity into cash with a cash-out refinance, you should expect to pay a higher mortgage rate for that privilege.
If you refinance your mortgage, closing costs typically range from 3% to 6% of the loan amount. For a $300,000 loan that’s $9,000 to $18,000 in fees.
But, each lender will assess your personal situation differently. So it’s important to shop around and compare offers. Everything from where the property is located to the type of loan you’re refinancing into can change what you’ll pay to refinance.
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At NextAdvisor we’re firm believers in transparency and editorial independence. Editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by our partners. We do not cover every offer on the market. Editorial content from NextAdvisor is separate from TIME editorial content and is created by a different team of writers and editors.
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