Today’s mortgage refinance rates: 20-year rates freefall back under 5% | May 24, 2022
With 30-year rates hitting 5.250%, homeowners may want to lock in a lower 20-year rate today ahead of more increases on the horizon
- 30-year fixed-rate refinance: 5.250%, up from 5.125%, +0.125
- 20-year fixed-rate refinance: 4.875%, down from 5.375%, -0.500
- 15-year fixed-rate refinance: 4.250%, unchanged
- 10-year fixed-rate refinance: 4.375%, unchanged
Rates last updated on May 24, 2022. These rates are based on the assumptions shown here. Actual rates may vary.
What this means: Mortgage refinance rates for a 20-year term plunged today, bringing this longer repayment term back under the 5% mark. But with a spike in rates in recent weeks, 30- and 20-year terms are still at or just under 5%. Mortgage refinance rates can fluctuate from day to day, so homeowners may want to act today to lock in a lower rate ahead of future increases.
WHAT IS CASH-OUT REFINANCING AND HOW DOES IT WORK?
How mortgage rates have changed over time
Today’s mortgage interest rates are well below the highest annual average rate recorded by Freddie Mac — 16.63% in 1981. A year before the COVID-19 pandemic upended economies across the world, the average interest rate for a 30-year fixed-rate mortgage for 2019 was 3.94%. The average rate for 2021 was 2.96%, the lowest annual average in 30 years.
The historic drop in interest rates means homeowners who have mortgages from 2019 and older could potentially realize significant interest savings by refinancing with one of today’s lower interest rates.
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 current mortgage 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?
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%.
Think it might be the right time to refinance? Be sure to shop around and compare rates with multiple mortgage lenders. You can do this easily with Credible and see your prequalified rates in only three minutes.
When is it worth it to refinance?
Refinancing a mortgage can be a great way to save money. But it’s not always the best move for every homeowner.
People refinance for a number of reasons, including to get a lower interest rate, change their monthly payment amount and lower their interest costs. Generally, if you can lower your interest rate by at least 0.75%, refinancing might be a good move.
But before you refinance, be sure to weigh closing costs, and calculate how long it will take before your savings from the refinance cover the expenses of refinancing.
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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.