Refinance Rates for Aug. 23, 2022: All Rates Jump

Refinance Rates for Aug. 23, 2022: All Rates Jump

Both 15-year fixed and 30-year fixed refinances saw their mean rates go up. The average rate on 10-year fixed refinance also saw an increase.

Like mortgage rates, refinance rates fluctuate on a daily basis. With inflation at a 40-year high, the Federal Reserve has hiked the federal funds rate four times this year and is poised to do so again in 2022 to try to slow rampant inflation. Though mortgage rates are not set by the central bank, these federal rate hikes increase the cost of borrowing money. Whether refinance rates will continue to rise or fall will depend on what happens next with inflation. If inflation begins to cool, rates will likely follow suit. But if inflation remains high, we could see refinance rates maintain an upward trajectory. If rates for a refi are currently lower than your existing mortgage rate, you could save money by locking in a rate now. As always, consider your goals and circumstances, and compare rates and fees to find a mortgage lender who can meet your needs.

30-year fixed-rate refinance

The current average interest rate for a 30-year refinance is 5.81%, an increase of 36 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. This makes 30-year refinances good for people who are having difficulties making their monthly payments or simply want a bit more breathing room. Be aware, though, that interest rates will typically be higher compared to a 15-year or 10-year refinance, and you'll pay off your loan at a slower rate.

15-year fixed-rate refinance

For 15-year fixed refinances, the average rate is currently at 5.06%, an increase of 27 basis points from what we saw the previous week. A 15-year fixed refinance will most likely raise your monthly payment compared to a 30-year loan. On the other hand, you'll save money on interest, since you'll pay off the loan sooner. You'll also typically get lower interest rates compared to a 30-year loan. This can help you save even more in the long run.

10-year fixed-rate refinance

For 10-year fixed refinances, the average rate is currently at 5.14%, an increase of 22 basis points over last week. Compared to a 30-year and 15-year refinance, a 10-year refinance will usually have a lower interest rate but higher monthly payment. A 10-year refinance can help you pay off your house much quicker and save on interest. Just be sure to carefully consider your budget and current financial situation to make sure that you can afford a higher monthly payment.

Where rates are headed

At the start of the pandemic, refinance rates dropped to historic lows, but they have been mostly climbing since the beginning of this year. Refinance rates rose due to inflation, which is at its highest level in four decades, as well as actions taken by the Federal Reserve. The Fed recently raised interest rates by another 0.75 percentage points and is prepared to raise rates again this year to slow the economy. Still, it's unclear exactly what will happen next in the market. If inflation continues to rise, rates are likely to climb. But if inflation starts to cool, rates could level off and begin to decline.

We track refinance rate trends using information collected by Bankrate, which is owned by CNET's parent company. Here's a table with the average refinance rates reported by lenders across the US:

Average refinance interest rates

Product	Rate	A week ago	Change
30-year fixed refi	5.81%	5.45%	+0.36
15-year fixed refi	5.06%	4.79%	+0.27
10-year fixed refi	5.14%	4.92%	+0.22

Rates as of Aug 23, 2022.

How to find personalized refinance rates

It's important to understand that the rates advertised online may not apply to you. Your interest rate will be influenced by market conditions as well as your credit history and application.

Having a high credit score, low credit utilization ratio and a history of consistent and on-time payments will generally help you get the best interest rates. You can get a good feel for average interest rates online, but make sure to speak with a mortgage professional in order to see the specific rates you qualify for. To get the best refinance rates, you'll first want to make your application as strong as possible. The best way to improve your credit ratings is to get your finances in order, use credit responsibly and monitor your credit regularly. 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 carefully whether it's the right choice for you at the moment.

When should I refinance?

In order for a refinance to make sense, you'll generally want to get a lower interest rate than your current rate. Aside from interest rates, changing your loan term is another reason to refinance.When deciding whether to refinance, be sure to take into account other factors besides market interest rates, including how long you plan to stay in your current home, the length of your loan term and the amount of your monthly payment. And don't forget about fees and closing costs, which can add up.

As interest rates have rather steadily increased since the beginning of the year, the pool of people eligible for refinancing has shrunk significantly. If you bought your house when interest rates were lower than current rates, you may likely not gain any financial benefit from refinancing your mortgage.

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• Current Refinance Rates For 30 Year Fixed

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Today's Mortgage Rates for Aug. 23, 2022: 30-Year Fixed Rate Soars Higher

Today's Mortgage Rates for Aug. 23, 2022: 30-Year Fixed Rate Soars Higher

A variety of notable mortgage rates increased today. There's been a staggering gain in 30-year fixed mortgage rates, and 15-year fixed rates cruised higher as well. At the same time, average rates for 5/1 adjustable-rate mortgages also were boosted.

Though mortgage rates have been rather consistently going up since the start of this year, what happens next depends on whether inflation continues to climb or begins to retreat. Interest rates are dynamic and unpredictable -- at least on a daily or weekly basis -- and they respond to a wide variety of economic factors. Right now, they're particularly sensitive to inflation and the prospect of a US recession. With so much uncertainty in the market, if you're looking to buy a home, trying to time the market may not play to your favor. If inflation rises and rates climb, this could translate to higher interest rates and steeper monthly mortgage payments. For this reason, you may have better luck locking in a lower mortgage interest rate sooner rather than later. No matter when you decide to shop for a home, it's always a good idea to seek out multiple lenders to compare rates and fees to find the best mortgage for your specific situation.

30-year fixed-rate mortgages

The 30-year fixed-mortgage rate average is 5.87%, which is an increase of 40 basis points from one week ago. (A basis point is equivalent to 0.01%.) Thirty-year fixed mortgages are the most frequently used loan term. A 30-year fixed mortgage will typically have a higher interest rate than a 15-year fixed rate mortgage -- but also a lower monthly payment. You won't be able to pay off your house as quickly and you'll pay more interest over time, but a 30-year fixed mortgage is a good option if you're looking to minimize your monthly payment.

15-year fixed-rate mortgages

The average rate for a 15-year, fixed mortgage is 5.04%, which is an increase of 17 basis points from the same time last week. You'll definitely have a larger monthly payment with a 15-year fixed mortgage compared to a 30-year fixed mortgage, even if the interest rate and loan amount are the same. However, as long as you can afford the monthly payments, there are several benefits to a 15-year loan. These include typically being able to get a lower interest rate, paying off your mortgage sooner, and paying less total interest in the long run.

5/1 adjustable-rate mortgages

A 5/1 ARM has an average rate of 4.31%, an addition of 9 basis points from the same time last week. For the first five years, you'll typically get a lower interest rate with a 5/1 adjustable-rate mortgage compared to a 30-year fixed mortgage. However, you might end up paying more after that time, depending on the terms of your loan and how the rate shifts with the market rate. If you plan to sell or refinance your house before the rate changes, an ARM may make sense for you. But if that's not the case, you could be on the hook for a significantly higher interest rate if the market rates shift.

Mortgage rate trends

Though mortgage rates were historically low at the beginning of 2022, they have been increasing somewhat steadily since then. The Federal Reserve recently raised interest rates by another 0.75 percentage points in an attempt to curb record-high inflation. The Fed has raised rates a total of four times this year, but inflation still remains high. As a general rule, when inflation is low, mortgage rates tend to be lower. When inflation is high, rates tend to be higher.

Though the Fed does not directly set mortgage rates, the central bank's policy actions influence how much you pay to finance your home loan. If you're looking to buy a house in 2022, keep in mind that the Fed has signaled it will continue to raise rates, and mortgage rates could increase as the year goes on. Whether rates follow their upward projection or begin to level out hinges on if inflation actually slows.

We use rates collected by Bankrate, which is owned by the same parent company as CNET, to track changes in these daily rates. This table summarizes the average rates offered by lenders across the country:

Today's mortgage interest rates

Rates accurate as of Aug. 23, 2022.

How to find the best mortgage rates

You can get a personalized mortgage rate by reaching out to your local mortgage broker or using an online calculator. In order to find the best home mortgage, you'll need to take into account your goals and overall financial situation. Things that affect what the interest rate you might get on your mortgage include: your credit score, down payment, loan-to-value ratio and your debt-to-income ratio. Having a good credit score, a higher down payment, a low DTI, a low LTV, or any combination of those factors can help you get a lower interest rate. The interest rate isn't the only factor that affects the cost of your home — be sure to also consider other factors such as fees, closing costs, taxes and discount points. You should comparison shop with multiple lenders -- including credit unions and online lenders in addition to local and national banks -- in order to get a mortgage loan that works best for you.

How does the loan term impact my mortgage?

When picking a mortgage, you should consider the loan term, or payment schedule. The most common mortgage terms are 15 years and 30 years, although 10-, 20- and 40-year mortgages also exist. Another important distinction is between fixed-rate and adjustable-rate mortgages. For fixed-rate mortgages, interest rates are stable for the life of the loan. For adjustable-rate mortgages, interest rates are the same for a certain number of years (typically five, seven or 10 years), then the rate fluctuates annually based on the market interest rate.

One thing to take into consideration when deciding between a fixed-rate and adjustable-rate mortgage is how long you plan on living in your home. Fixed-rate mortgages might be a better fit if you plan on staying in a home for quite some time. Fixed-rate mortgages offer greater stability over time in comparison to adjustable-rate mortgages, but adjustable-rate mortgages can sometimes offer lower interest rates upfront. If you don't have plans to keep your new home for more than three to 10 years, however, an adjustable-rate mortgage might give you a better deal. There is no best loan term as a general rule; it all depends on your goals and your current financial situation. Make sure to do your research and know what's most important to you when choosing a mortgage.

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Buying a Home or Refinancing? Here's How to Find the Right Home Loan

Buying a Home or Refinancing? Here's How to Find the Right Home Loan

Navigating the world of home-buying could be an Olympic sport. There are so many different regulations, guidelines and fees to keep track of -- and by the time you master one part, there are new rules to learn. And, with mortgage rates predicted to continue rising, particularly as the Fed looks to increase rates as early as March, locking in a rate sooner rather than later may save you tens of thousands in interest.

When searching for the right home loan, you're bound to come across many options. But not every mortgage is right for every person -- you'll want to learn more about the different types of home loans to decide which one is right for you. This guide will help break down several of the most common home loan types, while explaining what's required for approval and who each type is best for.

Read more: Mortgages, Credit Scores and Down Payments: 5 Things to Know Before Buying a Home

1. Conventional loan

What it is: A conventional loan is a loan that isn't backed by a government agency. These are the most common type of loan. Conventional loan terms come in 10-, 15-, 20- and 30-year terms, with 30-year terms being the most popular option.

What you need: You can get a conventional loan with as little as 3% down payment and a 620 credit score. But the lower your credit score, the more money you might need for a down payment.

Who it's good for: The majority of home loans -- around 75% -- are conventional loans, so it's good for most people. You can use it for your first home, second home and even investment properties.

Who should skip it: Borrowers who don't have the minimum credit score requirements or need payment assistance.

2. FHA loan

What it is: An FHA loan is backed by the Federal Housing Administration, which provides mortgage insurance to lenders who provide FHA loans. It's the largest mortgage insurer in the world. Loans are administered by FHA-approved lenders. This can be local banks, credit unions and online lenders. Loans come in 15- and 30-year terms.

What you need: To secure a 3.5% down payment rate, your credit score will need to be 580 or above. If it's below 580, you can still qualify, but you'll need at least a 10% down payment. For down payments of less than 20%, your loan will require private mortgage insurance. PMI protects the lender just in case you default on your loan. PMI will get removed from your mortgage payments once you have at least 20% equity in your home.

Who it's good for: Borrowers who don't have strong enough credit to qualify for a conventional loan. FHA loans also offer down payment loans and grants through federal, state and local programs whereas conventional loans don't.

Who should skip it: If you have good or excellent credit that would qualify you for a conventional loan.

Check out our full guide to FHA loans.

3. VA loan

What it is: VA loans are offered through the US Department of Veterans Affairs. Military veterans, those in active duty or in the reserves qualify for VA loans. 

What you need: There's no down payment or minimum credit score requirement to get a VA loan.

Who it's good for: Those who serve or have served in the military.

Who should skip it: Borrowers who aren't in the military, obviously. VA loans are only good on primary residences so if you need funding for a second home or investment property, you'll need to look at other options.

Check out our full guide to VA loans.

4. USDA loans

What it is: USDA loans are funded by the US Department of Agriculture. They're available in specific regions across the country. They're made for borrowers in mostly rural areas who might not otherwise qualify for a traditional loan. Loans are backed by USDA-approved lenders (similar to FHA-backed loans). You can check to see if you'd qualify by checking the eligibility site.

What you need: There's no down payment required for a USDA loan. Most lenders require at least a fair credit score.

Who it's good for: Families in rural areas as long as you meet income and location limits.

Who should skip it: Those who don't meet the location and income requirements. If you qualify for one and not the other, you also might want to look into alternative loan options.

Check out our full guide to USDA loans.

Other loan types to know about

As well as being based on a government (or nongovernment) program, mortgages can be categorized by interest rates and how much the home price is. Those are:

• Fixed-rate loans: These are the most common type of loan within a conventional mortgage. Fixed-rate loans means you'll pay the same interest rate every month for the life of the loan. The only time your interest rate will change is if you refinance your mortgage.

• Adjustable-rate mortgages: ARMs have a fixed interest rate for a set amount of time and then the interest rate fluctuates periodically. They usually start out lower than standard fixed-rate mortgages but can change over time based on a benchmark. A 5/1 ARM means the first five years have a fixed rate and then a variable interest rate that changes every year after that.

• Jumbo loans: This is a mortgage that finances a property that's too expensive for a traditional loan. The qualifications for jumbo loans tend to be more strict. For most lenders, you'll need a credit score of at least 700 and usually a 20% down payment. Jumbo loans start where conforming loans end, which is different depending on where you are. Jumbo loans can have fixed or adjustable rates. 

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