Compare Refinance Options

BestRefinanceRates.com makes it easy to compare all the top mortgage companies in one place.

Explore the list above and see personalized rankings by entering your zip code and answering a couple of basic questions. Save time and money by comparing multiple lenders in one place. Review multiple quotes and have refinance companies compete for your business by negotiating the best rates and the lowest fees.

BestRefinanceRates.com also makes it easy to decide by helping you know before you borrow.

Our expert ratings and reviews guide you every step of the way. Based on our research, see which of the nation’s leading lenders and brokers perform the best for:

• Lowest Fees
• Loan Variety
• Ease of Application Process
• Customer Service
• Company Reputation
• Lower Credit Borrowers
• Higher Credit Borrowers

We also provide resources and tools, including a simple refinance calculator to see how much you stand to save by refinancing your loan.

What Is a Mortgage Refinance?

A refinance is when you replace your current mortgage with a new one. Much like the original mortgage, a refinance has the same components: the loan amount, interest rate, and the term.

The loan amount, or the principle, is the amount you want to borrow. The interest rate is the additional portion you are charged by a lender when paying back the loan amount. The term is the life of the loan and your payments. Common refinance terms include:

• 30-year term
• 20-year term
• 15-year term

Learn more about refinancing your mortgage here.

What Are Today’s Refinance Rates?

Refinance interest rates can change almost daily. Take a look at the below table to see how average interest rates⁽¹⁾ are trending for mortgage refinance loans:

Loan Type

Today

Last Week

Last Month

15-Year Fixed

-

-

-

30-Year Fixed

-

-

-

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How Are Interest Rates Determined?

Though based on a variety of factors, interest rates are typically tied to the economy. In general, when the economy is good, interest rates tend to be higher. When the economy needs help, interest rates often come down to help stimulate borrowing and fuel growth. Interest rates can also be tied to Treasury bond rates. Typically, when bond prices start to rise, interest rates will start to come down.

Lock-in Your Rate and Save

After comparing lenders and options, once you see a rate that works for your needs, it is important to apply for the loan and lock it in. A rate lock is a set time where your lender guarantees the interest rate you were offered. That means if rates increase later and during your approval and loan closing period, you won’t lose your lower rate. And if rates fall further, many lenders even allow you to “float down” to the lower number.

And what if down the road rates fall even further? Depending on your needs, such as taking out a cash-out refi to pay for a remodel or other large purchase, it is often best to consider what makes the most financial sense today, especially keeping in mind that you can always refinance again in the future.

Is It a Good Time to Refinance?

Refinance rates are always changing.

How about your mortgage payment, is it time for a change? The answer is likely yes if you are interested in:

• Lowering your monthly bill
• Paying off your home faster
• Getting cash out for a remodel, repair, or other needs

How about your financial situation? Has it changed since you first started your current mortgage? If it has, refinancing could help you save by taking advantage of better circumstances or help you to meet certain financial goals.

Though everyone’s needs are different, here is how to determine if it is a good time to refinance:

• Interest rates are lower: If today’s rates are lower than your current mortgage, then it is probably a great time to refinance. By refinancing at a lower rate, you can potentially save thousands a year with lower monthly payments, or even a fortune by paying less in total interest over the lifetime of your mortgage.

• Your credit score has improved: If your credit score was not up to par when you first took out your current mortgage, there is a good chance it has improved. If this is the case, it is recommended to refinance, as those with higher credit scores are often able to secure the lowest interest rates.

• Your home value has increased: If you purchased your home with a down payment of less than 20%, odds are you pay private mortgage insurance (PMI). PMI is the fee lenders charge to cover themselves in the event borrowers who own less than 20% of the equity or value of their home can no longer afford to pay the loan. If your home’s value has increased, your equity could now be 20% or more. In this case, refinancing would eliminate your PMI, potentially saving you hundreds or even thousands on your payment.

  Refinancing when your home value has increased also means that you have more equity to borrow against. People tend to take what is known as a cash-out refinance to fund home remodels, repairs, vacations, or other expenses.

• You want to switch to a fixed rate loan: An adjustable-rate mortgage (ARM) offers a fixed interest rate for a short term, only to become variable after the initial period. For instance, a 5/1 ARM will be fixed for five years, but going forward will adjust up or down to whatever the current rates are for the given month.

  Homeowners may choose an ARM for the flexibility. Initial fixed interest rates can be low. It can also be a good option for those who may not hold on to a property for the long term. However, if 30-, 20-, or 15-year interest rates are low now, it is often a wise financial decision to lock in an affordable fixed term while you can.

Essentially, any time you can lower your monthly payment, reduce the amount of total interest you pay, or take advantage of your home’s equity, it’s a good opportunity to refinance. Keep in mind that you must also factor in closing costs.

Closing Costs

Closing costs can include fees for loan origination, application, discount points, home inspection, and title. They will vary by lender, with most charging a one-time fee of about 2% to 3% of your loan amount, and some offering no closing costs at all. In most cases, closing costs can be spread across your monthly payments to blunt any immediate financial impact. With a lower interest rate, it often does not take long into your new loan to break even on closing costs.

After considering current interest rates, assessing your current financial needs and situation, and subtracting any closing costs, it should be apparent if now is a good time to refinance and save.

Refinance Examples

The numbers can be overwhelming. To make things easier, we have developed this simple refinance calculator, and included an example scenario below:

To begin, let’s say a homeowner purchased a house that costs $400,000. After giving a down payment of 20%, the homeowner took out a 30-year mortgage at an interest rate of 4.500%.

Scenario 1: Stay on the original mortgage.
Here are the numbers if this homeowner never refinances:

In this scenario, after 30 years the homeowner ends up paying $277,725 in lifetime interest. Along with the $6,400 initial closing cost, the total cost to borrow $320,000 is $283,400.

Scenario 2: Refinance 5 years after date of home purchase.
Now, let’s say instead of finishing the above 30-year mortgage, this same homeowner, motivated by a drop in interest rates (from 4.750% to 3.300%), decides to change course and refinance during the fifth year of the original loan.

Below is what the numbers would look like refinancing to a new 30-year loan after five years:

If you were to include all costs, specifically the interest paid from the original loan so far ($72,216), the closing costs of both loans ($6,400 + $5,842), and what would be the new loan’s lifetime interest ($166,502), one that is substantially less due to the lower interest rate of 3.300%, the total mortgage cost would now effectively be $246,220. Compared to the total mortgage cost of the original loan ($283,400), that is $37,100 in savings.

Additionally, by refinancing this homeowner would lower their mortgage payment by $389 per month, or almost $5,000 less per year. Even after factoring in the payments from the first five years of the original loan, the difference in monthly payments would add up to another $40,440 in savings. Combined with the savings from paying less in lifetime interest (or $37,100 + $40,440), the total savings pocketed by refinancing would be $77,540.

Scenario 3: Refinance 5 years after date of home purchase, but with a shorter term.
How would the above look if this same homeowner refinanced from a 30 to a 20-year term?

Though the monthly payments are comparable to the original mortgage, the reduction in lifetime interest paid would be substantial, or $97,579 in savings. Additionally, this homeowner would pay off their home five years faster. Those five years of fewer payments adds up to another $99,600, bringing the total savings to $197,179.