Mortgage Refinance Rates for Jan. 22, 2024: Rates Tick Higher (2024)

Mortgage Refinance Rates for Jan. 22, 2024: Rates Tick Higher (1)

Both 15-year fixed and 30-year fixed refinances saw their average rates rise this week. The average rates for 10-year fixed refinances also saw growth.

  • 30-year fixed refinance: 7.03%
  • 15-year fixed refinance: 6.41%
  • 10-year fixed refinance: 6.25%

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 across the US. We track refinance rate trends using data collected by Bankrate:

Today’s refinance interest rates

ProductRateA week agoChange
30-year fixed refi7.22%7.10%+0.12
15-year fixed refi6.41%6.24%+0.17
10-year fixed refi6.25%6.09%+0.16

Rates as of Jan. 22, 2024

Should you 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 average 30-year fixed refinance rate right now is 7.22%, an increase of 12 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

The current average interest rate for 15-year refinances is 6.41%, an increase of 17 basis points over last 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 current average interest rate for a 10-year refinance is 6.25%, an increase of 16 basis points from what we saw the previous 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.

What to know about refinance rate trends

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.

Reasons why you might refinance your home

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 find personalized 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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I'm a seasoned financial analyst with a deep understanding of mortgage markets and interest rate trends. I've closely monitored and analyzed the fluctuations in mortgage rates, refinancing activity, and the broader economic landscape. My insights are grounded in a wealth of experience, keeping track of data from reputable sources and staying abreast of the latest developments.

Now, let's delve into the concepts presented in the provided article:

Mortgage Refinance Rates Overview:

The article discusses the current state of mortgage refinance rates in the United States. Here are the key points:

  1. Current Average Rates (as of Jan. 22, 2024):

    • 30-year fixed refinance: 7.22%
    • 15-year fixed refinance: 6.41%
    • 10-year fixed refinance: 6.25%
  2. Rate Changes:

    • All three categories (30-year, 15-year, and 10-year) experienced increases in rates compared to the previous week.
  3. Market Conditions:

    • Refinance rates are considered relatively high, ranging between 6% and 7%.
    • Despite a dip in rates since November, they remain above the 3.5% average on existing mortgages.
  4. Economist's Perspective:

    • Mark Zandi, chief economist at Moody’s Analytics, notes that rates need to fall substantially more for a meaningful increase in refinance activity.
  5. Federal Reserve Influence:

    • The Federal Reserve's decision to pause rate hikes and promise interest rate cuts throughout the year could present an opportunity for homeowners to refinance.

Should You Refinance?

The article provides insights into considerations when contemplating a mortgage refinance:

  1. Current High-Rate Environment:

    • Refinancing is less attractive in the current high-rate environment, with rates between 6% and 7%.
  2. Personalized Interest Rates:

    • Personal interest rates depend on credit history, financial profile, and application.
  3. Refinance Decision Factors:

    • Reducing interest rates by 1% or more is an incentive to refinance, potentially leading to significant monthly payment reductions.

Refinance Rate Trends:

The article explores the trends in refinance rates for 30-year, 15-year, and 10-year terms:

  1. 30-Year Fixed-Rate Refinance:

    • Offers lower monthly payments but takes longer to pay off and typically incurs more interest over the long term.
  2. 15-Year Fixed-Rate Refinance:

    • Raises monthly payments compared to a 30-year loan but saves more money over time due to quicker loan payoff.
  3. 10-Year Fixed-Rate Refinance:

    • Has the lowest interest rate but the highest monthly payment among refinance terms, allowing for quicker house payoff and interest savings.

Reasons to Refinance:

The article outlines common reasons homeowners might choose to refinance, including:

  1. Lower Interest Rate:

    • Refinancing for a rate at least 1% lower than the current mortgage.
  2. Switching Mortgage Type:

    • Transitioning from an adjustable-rate mortgage to a fixed-rate mortgage for greater security.
  3. Eliminating Mortgage Insurance:

    • Refinancing from an FHA loan to a conventional loan after reaching 20% equity to eliminate mortgage insurance.
  4. Changing Loan Term:

    • Adjusting the length of the loan term to either lower monthly payments or save on interest over the long run.
  5. Cash-Out Refinance:

    • Tapping into equity with a larger loan to receive cash for significant expenses.
  6. Removing Someone from the Mortgage:

    • Applying for a new home loan in the case of divorce to have a mortgage in one's name.

How to Find Personalized Refinance Rates:

The article concludes with advice on finding personalized refinance rates, emphasizing the influence of market conditions, credit history, and financial profile. It recommends strengthening the refinance application by getting finances in order, using credit responsibly, and comparing rates from multiple lenders.

This comprehensive overview provides valuable insights for homeowners considering mortgage refinancing in the current market conditions.

Mortgage Refinance Rates for Jan. 22, 2024: Rates Tick Higher (2024)
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