So far this year, average mortgage rates have stayed stubbornly high, bouncing between 6.5% and 7%, as financial markets weigh the risks of both higher inflation and an economic slowdown. Most homeowners, unable to save money by refinancing, are holding out for bigger rate drops.
“If rates fall below 6%, we could see a big jump in refinance activity,” said Jeb Smith, licensed real estate agent and member of CNET Money’s expert review board. Yet economists and housing market experts don’t expect a dramatic drop-off in rates in the immediate future.
Mortgage refinance rates fluctuate daily based on a range of economic and political factors. For more insights on where rates might be headed, check out our weekly mortgage rate forecast.
Today’s mortgage rates
When mortgage rates start to fall, be ready to take advantage. Experts recommend shopping around and comparing multiple offers to get the lowest rate. Enter your information here to get a custom quote from one of CNET’s partner lenders.
About these rates: Bankrate’s tool features rates from partner lenders that you can use when comparing multiple mortgage rates.
Current refinance rate trends
Early-year projections for mortgage refinance rates were cautiously optimistic. Experts outlined a gradual improvement in housing affordability driven by easing inflation and a series of Federal Reserve rate cuts.
However, after three interest rate reductions in 2024, the Fed has left borrowing rates unchanged this year to assess the economic fallout from President Trump’s policies on trade, immigration and government spending.
The central bank is expected to resume cutting rates as early as September, but this will not immediately result in lower mortgage rates.
While the Fed’s policy decisions guide borrowing costs across the economy, they don’t have a 1:1 relationship with mortgage rates, which are set in the bond market.
As of now, the Fed is expected to make two 0.25% rate reductions this year. If inflation increases due to tariffs, policymakers may hold off on easing borrowing costs until later, which would keep upward pressure on mortgage refinance rates.
Where refinance rates are headed in 2025
Most housing forecasts still call for a modest decline in mortgage rates, with average 30-year fixed rates expected to end the year around below 6.5%. For refinancing to become significantly more affordable, though, we need to see multiple interest rate cuts and weaker economic data.
Overall, it’s unlikely we’ll see another refinancing boom like the one in 2020-21 when mortgage rates were exceptionally low around 3%. Nevertheless, refinancing might be beneficial for other reasons, like changing the type of home loan, term length or taking someone off the mortgage.
What to know about refinancing
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 refinancing your mortgage isn’t free. Since you’re taking out a whole new home loan, you’ll need to pay another set of closing costs. If you fall into that pool of homeowners who purchased property when rates were high, consider reaching out to your lender and running the numbers to see whether a mortgage refinance makes sense for your budget, said Logan Mohtashami, lead analyst at HousingWire.
Choosing the right refinance type and term
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.
30-year fixed-rate refinance
The average 30-year fixed refinance rate right now is 6.88%, an increase of 2 basis points over this time last week. (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
For 15-year fixed refinances, the average rate is currently at 6.22%, an increase of 5 basis points compared to one week ago. 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 current average interest rate for a 10-year refinance is 6.34%, an increase of 22 basis points over last week. 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.
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.
When to consider a mortgage 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.
