Mortgage refinancing rates for January 2, 2023: rates are increasing

15-year and 30-year fixed refinancing saw their average rates increase. The average 10-year fixed refinancing rate also increased slightly.

Like mortgage rates, refinance rates fluctuate daily. With inflation at its highest level in 40 years, the Federal Reserve raised the federal funds rate seven times in 2022 in an attempt to slow the surge in inflation. Although mortgage rates are not set by the central bank, its rate hikes increase the cost of borrowing and ultimately impact mortgage and refinance rates and the housing market in general. Whether refinancing rates continue to rise or fall will largely depend on the evolution of inflation. If inflation slows, rates will likely follow. But if inflation remains high, we could see refinancing rates maintain their upward trajectory.

If a refi’s rates are currently lower than your current mortgage rate, you could save money by fixing a rate now. As always, consider your goals and situation, and compare rates and fees to find a mortgage lender that can meet your needs.

30-year fixed rate refinancing

The average 30-year fixed refinance rate is currently 6.70%, an increase of 5 basis points compared to the same period last week. (One basis point equals 0.01%.) Refinancing a 30-year fixed loan from a shorter loan term can lower your monthly payment. For this reason, a 30-year refinance can be a good idea if you’re having trouble making your monthly payments. Be aware, however, that the interest rates will generally be higher than those of a 15 or 10 year refinance and that you will pay off your loan at a slower rate.

15-year fixed-rate refinancing

The average rate on a 15-year fixed refinance loan is currently 6.19%, an increase of 8 basis points from last week. Refinancing a 15-year fixed loan from a 30-year fixed loan will likely increase your monthly payment. On the other hand, you will save money on interest because you will pay off the loan sooner. Interest rates for a 15-year refinance also tend to be lower than a 30-year refinance, so you’ll save even more in the long run.

10-year fixed rate refinancing

For 10-year fixed refinances, the average rate is currently 6.36%, an increase of 13 basis points from what we saw the previous week. Compared to a 30-year and 15-year refinance, a 10-year refinance will generally have a lower interest rate but a higher monthly payment. A 10-year refinance can help you pay off your home much faster and save on long-term interest. Just be sure to carefully review your budget and current financial situation to make sure you can afford a higher monthly payment.

Where are the rates going

At the start of the pandemic, refinance rates fell to historic lows, but they have been rising steadily since the start of 2022. The Fed recently hiked interest rates another 0.50 percentage points and looks set to to continue raising rates in 2023. This noted , if inflation slows, rates could stabilize and start falling.

We track refinance rate trends using data collected by Bankrate, which is owned by CNET’s parent company. Here is a table with the average refinance rates provided by lenders nationwide:

Average refinancing interest rate

Product	Frequency	A week ago	Change
30-year fixed refi	6.70%	6.65%	+0.05
15-year fixed refi	6.19%	6.11%	+0.08
10-year fixed refi	6.36%	6.23%	+0.13

Rates as of January 2, 2023.

How to Shop for Refinance Rates

It is important to understand that prices advertised online may not apply to you. Your interest rate will be influenced by market conditions as well as your credit history and demand.

Having a high credit score, a low rate of credit utilization, and a history of regular, on-time payments will generally help you get the best interest rates. You can get a good idea of ​​average interest rates online, but be sure to speak with a mortgage professional to see the specific rates you qualify for. To get the best refinance rates, you must first make your application as strong as possible. The best way to improve your credit rating is to get your finances in order, use your credit responsibly, and monitor your credit regularly. Remember to speak with several lenders and shop around.

Refinancing can be a good decision if you get a good rate or can pay off your loan sooner, but think carefully if it’s the right choice for you right now.

When to Consider a Mortgage Refinance

Generally, it’s a good idea to refinance if you can get a lower interest rate than your current interest rate or if you need to change the term of your loan. When deciding to refinance, be sure to consider factors other than market interest rates, including how long you plan to stay in your current home, how long your loan is, and the amount of your mortgage. monthly payment. And don’t forget fees and closing costs, which can add up.

As interest rates have risen steadily since the start of the year, the pool of applicants for refinancing has shrunk considerably. If you bought your home when interest rates were lower than today, you probably won’t see any financial benefit from refinancing your mortgage.