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Compare current 30-year mortgage refinance rates to find the best rate from the right lender.
What Is the Current Rate for Refinancing a 30-Year Fixed Mortgage?
What Is the Lowest 30-Year Mortgage Refinance Rate?
The lowest 30-year refinance rate will largely depend on your financial profile, market conditions and the lender. On a national average, the lowest rate was 6.94% for the last year. Keep in mind that mortgage rates in general have more than doubled since the start of 2022.
Related: Mortgage Rates Forecast For 2023: Will Rates Drop?
30-Year Refinance Rates Chart
To help you compare refinance options, here are some of the latest average rates for the most common types of fixed-rate refinance home loans, including ones insured by the Federal Housing Administration (FHA) and the U.S. Department of Veterans Affairs (VA).
| Fixed rate, refinance loan type | Interest rate (%) |
|---|---|
| 30 year | 7.12 |
| 10 year | 6.67 |
| 15 year | 6.75 |
| VA 30 year | 6.70 |
| FHA 30 year | 6.40 |
| 15-year jumbo | 6.87 |
| 30-year jumbo | 7.32 |
What Is a 30-Year Refinance Mortgage?
A 30-year refinance is when you convert your current mortgage into a new, refinanced mortgage for a repayment period lasting 30 years. Borrowers typically refinance their mortgage to take advantage of lower interest rates or to get a fixed rate rather than an adjustable one.
Pros and Cons of a 30-Year Refinance Mortgage
Whether refinancing to a 30-year mortgage is a good option will depend on your circ*mstances. However, here are some general pros and cons to keep in mind when considering if a 30-year refinance mortgage is the right move for you.
| Pros | Cons |
|---|---|
| More affordable monthly payments | Pay more in interest over the life of the loan |
| Leaves you with more cash each month to put towards other goals | Higher interest rate than shorter-term loans |
| Flexibility to pay off the loan sooner as needed, when you can afford it | You will be in debt longer, unless you can pay it off early or refinance to a shorter term |
How Are 30-Year Refinance Mortgage Rates Set?
Lenders look to the actions of the Federal Reserve and whether it hikes the fed funds rate to help determine where refinance mortgage rates are headed. Other primary factors that affect mortgage rates are the yields in the bond market, investor demand and broader economic conditions like inflation.
However, not all borrowers get the same 30-year refinance rate because personal circ*mstances also come into play, such as your financial health, the size of your loan and the value of your house. The rate will also depend on the lender you work with and how much risk they are willing to take on.
Borrower demand for mortgages can also affect rates. For example, when borrower demand is weaker, lenders may need to offer more incentives, such as competitive rates or lower fees, to attract borrowers.
How a 30-Year Refinance Impacts Your Mortgage
When considering a 30-year mortgage refinance, interest rates will often need to be considerably lower than your current rate in order for the math to work in your favor.
For instance, if you’re 15 years into a 30-year mortgage, refinancing your 30-year mortgage will likely get you lower monthly payments because you will be extending the smaller loan balance over 30 years. However, the compounded interest you will end up paying in the long run will likely undercut the benefits of lower monthly payments.
Instead of refinancing, ask your lender about the possibility of mortgage recasting. Mortgage recasting is when your lender recasts—or recalculates—your loan based on the remaining term and outstanding balance. Mortgage recasting will typically reduce your monthly payment and also save you on interest over time.
For borrowers who can afford to make a lump-sum payment towards their loan principal, mortgage recasting may be a good alternative to a 30-year refinance.
Should I Consider a 30-Year Refinance?
Most mortgage applicants seek a 30-year, fixed-rate mortgage because it’s often more affordable than a 15- or 20-year mortgage. A 30-year mortgage refinance might be right for you if a shorter-term mortgage is out of your budget or you’d like to save some cash while making mortgage payments. Conversely, refinancing a 30-year mortgage into a shorter-term home loan means you will pay off your mortgage faster.
You can run the numbers yourself using a 15-year vs. 30-year mortgage calculator. Just remember that you’ve already paid a certain amount in interest since you’re refinancing your old mortgage. A trusted professional like a mortgage broker or loan officer can also help advise you.
Another advantage is that paying more in interest by getting a longer 30-year mortgage may help you get a bigger tax deduction, if you itemize your deductions.
Also, you always have the option to pay more toward your principal at any time, whether as a one-time payment or on an ongoing basis. That can greatly reduce the overall amount of interest you pay over the life of your loan.
How To Get the Best 30-year Refinance Rates
Studies have shown that borrowers who comparison shop get better rates than those who go with the first lender they find. While it may make sense to reach out to the lender who manages your current mortgage, you should still look around and compare three or more lenders. You can also consult a mortgage broker, who will shop around on your behalf.
Before you apply for a mortgage refinance, you should:
- Check your credit score. To qualify for the lowest interest rate, your credit should be as strong as possible—the higher your score, the lower the rate a lender will offer.
- Improve your credit.If you believe your credit isn’t strong enough to get the best mortgage rate possible, you should make any necessary changes or improvements before you apply.
- Find out how much home you can afford.Calculate your total mortgage costs including how much of a down payment you can make and the closing costs to refinance.
- Compare the best mortgage rates.Shop refinance rates online and with your current financial providers. When you’re ready to apply with one or more lenders to get a more formal estimate, compile the necessary documentation like income verification and proof of assets.
Banks, credit unions and many online lenders offer mortgage refinancing options. Sometimes your current financial provider will offer a better deal in order to keep your business while other times, a competitor will offer a better rate to gain your business. Find out the rates each lender is offering as well as the annual percentage rate (APR)—the all-in cost of a loan, which includes fees.
Frequently Asked Questions (FAQs)
Will 30-year refinance rates increase?
It’s highly likely that all mortgage rates, whether for purchase or refinance, will stay elevated for the better part of 2023. But to give you an example of how rates fluctuate: In the past year, the 30-year mortgage refinance rate went as high as 7.33% and as low as 6.94%, as of mid-December 2022.
The Federal Reserve, which influences interest rates in the U.S., began aggressively lifting rates in March 2022 and ended other activities that helped support the economy and lower rates during the Covid-19 pandemic. This was a key factor in rates doubling throughout 2022.
How do I qualify for a 30-year refinance rate?
Lenders typically see refinances as riskier than purchase mortgages. So, while requirements will vary by lender, you will likely need to have a strong credit score (at least 620 for a conventional loan) if you want to qualify for a low refinance rate, a comfortable debt-to-income (DTI) ratio and at least 20% equity built up in your home.
You will also need to show that you are in good standing with your current mortgage and that you have enough cash to pay for refinancing costs.
How do I refinance from an adjustable rate to a fixed 30-year mortgage?
Refinancing from an adjustable-rate mortgage (ARM) is a common practice, especially around the point when the rates on an ARM are about to adjust following the introductory period. If you have an ARM,believe interest rates will go down and you want predictable monthly payments, refinancing to a 30-year fixed may make sense.
Follow these basic steps when refinancing from an ARM to a 30-year mortgage:
- Review your financial goals
- Ask lenders what paperwork they require to refinance your mortgage
- Compare rates from at least three lenders
- Have your paperwork ready
- Lock in your rate
However, before you get in too deep, talk to an experienced lender to discuss your financial goals and whether refinancing to a 30-year mortgage is the right move for you. There are closing costs involved with refinancing, so even if your ARM is about to adjust, refinancing to a 30-year mortgage may not be a good fit if you don’t plan to stay in your home much longer.
What is the difference between 15-year and 30-year refinance rates?
Fifteen-year refinance rates are lower than 30-year refinance rates. And though the monthly payments are higher on 15-year refinance loans, you will pay less interest over the life of the loan compared to a 30-year mortgage.
Can you refinance from a 15-year to a 30-year mortgage?
Yes. If you currently have a 15-year mortgage, you can refinance into any home loan that you qualify for. But keep in mind: The longer the mortgage term, the higher the interest rate will be. Conversely, the shorter the term, the higher the monthly payments will be.
