Review current mortgage refinance rates for December 2, 2023. Use the table below to shop refinance rates and fees for lenders near you. Input your loan amount and property value in the refine your search menu to compare updated interest rates, APRs, and monthly payments to determine how much you can save by refinancing.
We recommend that you compare your current mortgage payment to the payment and fee information presented in the table to understand how long it would take to recover your closing costs if you refinance. Contacting at least five lenders in the table below enables you to find the refinance terms, lender and loan program that best meet your needs.
December 2, 2023
The pricing for mortgage refinance rates is similar to purchase loan rates but there are some differences. Below we explain how these differences impact refinance interest rates.
Refinance Mortgage Rates Tend to Be Lower. This is because you have a track record of making your monthly payments and because you have been through the mortgage process before. Refinances also tend to take less time and effort for lenders to process which enables them to offer more favorable loan terms. There is also more lender demand for refinances which can translate into lower rates for borrowers.
Cash Out Refinances Have Higher Rates. If you are taking cash out of your home when you refinance, you make be required to pay a higher mortgage rate as compared to a rate and term refinance when you only change your interest rate or loan length. Cash out refinances may also require that you have more equity in your home.
Watch Out for No Cost Refinances. Not paying closing costs when you refinance your mortgage may seem like a great deal but you may end up paying more in the long run. With a no cost refinance you usually pay a higher mortgage rate which increases your monthly payment and total interest expense. It is important to understand how closing costs impact refinance mortgage rates as it may be financially better to pay some amount of costs to lower your mortgage rate.
Consolidating Debt May Help You Qualify. One of the main differences between a home purchase loan and a refinance is that you can consolidate high cost debt when you refinance your mortgage. For example, you may be able to payoff a credit card or personal loan with the proceeds from a refinance. Paying off or down loans may also reduce your total monthly debt payment, improve your ability to qualify for a refinance and enable you to lower your mortgage rate.
Understand Your Refinance Program Options. Although most low down payment mortgage program focus on home buyers, you may be able to use these programs to refinance the loan on a property with relatively low homeowners equity. For example, refinances are eligible for the FHA and VA loan programs. Even if you have limited equity in your home you may be able to refinance your mortgage to lower your rate and monthly payment.
As a rule of thumb, if you are refinancing, your new interest rate should be at least .75% lower than your existing interest rate to justify the refinance closing costs (if any). Additionally, your lower monthly mortgage payment should enable you to recover your mortgage closing costs, or breakeven, within two and a half years. Refinance mortgage rates tend to be slightly lower than home purchase loan rates which can help borrowers save money on their mortgage.
Shortening your mortgage term when you refinance allows you to lower your mortgage rate. For example, the interest rate on a 15 year mortgage is typically .5% - 1.0% less than the interest rate on a 30 year mortgage. A mortgage with a shorter term and lower interest rate results in significantly less total interest expense over the course of the mortgage. For example, a $250,000 15 year mortgage with a 2.750% interest rate saves a borrower approximately $100,000 in total interest expense as compared to a 30 year mortgage with a 3.500% interest rate.
Refinancing your mortgage also enables you to change your mortgage program. For example, borrowers with an adjustable rate mortgage or interest only mortgage may refinance into a fixed rate mortgage if they are concerned interest rates will increase in the future. Alternatively, borrowers could decide to refinance a fixed rate mortgage into an adjustable rate mortgage to lower their current interest rate or if they believe interest rates will decline in the future.
Borrowers can use a cash-out refinance to access the equity in their homes. With a cash-out refinance your new mortgage amount is greater than your current mortgage balance and you keep the difference, less any closing costs, when the refinance closes. Borrowers can use the proceeds from a cash-out refinance for a multitude of purposes including to pay for a remodeling project or college tuition.
There is usually no inherent advantage to working with your current lender and we recommend that you use our rate table to shop multiple lenders to decide if you should refinance your mortgage. Your current lender may offer the best refinance terms but you do not know that unless you shop around. Comparing multiple lenders can save you money in the long run and you may learn about mortgage programs that better match your financial and personal goals. Whether it is with your current lender or a new one, when you refinance your primary objectives should be to find the best loan terms and work with a lender that you are confident can deliver.
Don’t get us wrong -- most lenders love any borrower -- but it is usually easier for lenders to process and close refinances than home purchase loans. Refinance applicants have been through the mortgage process before which usually makes them easier for the lender to manage. Additionally, if you are refinancing your loan you usually have made your monthly payments on-time and your credit score is in pretty good shape, which is another plus for lenders. This is one of the reasons why some lenders offer more favorable mortgage terms on refinances. In short, because refinance borrowers are sought after by lenders, they may have more leverage when they negotiate their mortgage rate and fees, which can save you money upfront and in the long run.
Comparing refinance mortgage rates can save you thousands. Use our rate tables to find the lender offering the lowest rates and fees
Our rate tables put you in control. You can compare lenders anonymously plus you never need to provide your social security number
Review refinance mortgage rates from leading lenders. Our lenders offer highly competitive terms to win your mortgage business
Our Mortgage Refinance, Cash-Out, Debt Consolidation or Bi-Weekly refinance calculators enable you to evaluate different refinance scenarios and determine how much money you can save by refinancing
Our comprehensive mortgage refinance guide takes you through the refinance process from start to finish
Refinancing your mortgage is only one option for taking cash out of your home. We review all your cash-out alternatives and provide pros and cons so that you can select the option that is right for you
Make sure all your questions are answered before you start the refinance process. Submit your refinance queries to the FREEandCLEAR Mortgage Expert and receive a thorough answer within 24 hours
"Refinance Overview." Know Your Options. Fannie Mae, 2020. Web.