Both 15-year fixed and 30-year fixed refinances saw their mean rates slump this week. The average rate on 10-year fixed refinance also sank.
At the start of the pandemic, refinance rates hit a historic low. But in early 2022, the Federal Reserve began hiking interest rates in an effort to curb high inflation. While the Fed doesn't directly set mortgage rates, its series of rate hikes has led to an increased cost of borrowing among most consumer loan products, including mortgages and refinances.
After more than a year of aggressive rate increases, though, the central bank opted to skip a rate hike on June 14. The Fed has signaled that it will use this pause as an opportunity to study incoming economic data, but is not ruling out additional rate increases in the future. The Fed's next meeting to decide is scheduled for July 26.
Current Mortgage Rates for July 2023
Mortgage refinance rates change every day. Experts recommend shopping around to make sure you're getting the lowest rate. By entering your information below, you can get a custom quote from one of CNET's partner lenders.
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 refinance rates.
If inflation continues to decline and the Fed is able to hold rates steady -- and eventually cut them in 2024 -- mortgage rates should see some relief.
"Rates are getting to a point of being steady," said Kevin Williams, founder of Full Life Financial Planning. "So it's more of a question of how long it will take for rates to start ticking back down and when inflation will return to a place where your dollar starts buying a bit more each month," he added.
But a return of rates in the 2% to 3% range is unlikely. Unless you bought a house within the past year, it's unlikely you can save money by refinancing to a mortgage with a lower rate.
Regardless of where rates are headed, homeowners shouldn't focus on timing the market, and should instead decide if refinancing makes sense for their financial situation. As long as you can get a lower interest rate than your current one, refinancing will likely save you money. Do the math to see if it makes sense for your current finances and goals. If you decide to refinance, make sure you compare rates, fees and the annual percentage rate -- which shows the total cost of borrowing -- from different lenders to find the best deal.
30-year fixed-rate refinance
For 30-year fixed refinances, the average rate is currently at 7.33%, a decrease of 11 basis points from what we saw one week ago. (A basis point is equivalent to 0.01%.) One reason to refinance to a 30-year fixed loan from a shorter loan term is to lower your monthly payment. This makes 30-year refinances good for people who are having difficulties making their monthly payments or simply want a bit more breathing room. In exchange for the lower monthly payments though, rates for a 30-year refinance will typically be higher than 10- or 15-year refinance rates. You'll also pay off your loan slower.
15-year fixed-rate refinance
The average rate for a 15-year fixed refinance loan is currently 6.54%, a decrease of 25 basis point compared to one week ago. A 15-year fixed refinance will most likely raise your monthly payment compared to a 30-year loan. But you'll save more money over time, because you're paying off your loan quicker. 15-year refinance rates are typically lower than 30-year refinance rates, which will help you save even more in the long run.
10-year fixed-rate refinance
The average 10-year fixed refinance rate right now is 6.70%, a decrease of 7 basis points compared to one week ago. A 10-year refinance will typically feature the highest monthly payment of all refinance terms, but the lowest interest rate. 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
Mortgage rates hit a 20-year high in late 2022, but now the macroeconomic environment is changing again. Rates dropped significantly in January before climbing back up in February. Since the start of the summer, mortgage rates have been fluctuating between 6.5% and 7%.
Even though the Fed hit pause on rate hikes, mortgage interest rates will continue to fluctuate on a daily basis. That's because mortgage rates aren't directly tied to the federal funds rate. Mortgage rates respond to a variety of economic factors, including inflation, employment and the outlook for the economy more broadly.
The most recent Consumer Price Index shows annual inflation was at 3.0% for the 12-month period ended in June, down sharply from May's 4.0% figure.
"With the backdrop of easing inflation pressures, we should see more consistent declines in mortgage rates as the year progresses, particularly if the economy and labor market slow noticeably," said Greg McBride, CFA and chief financial analyst at Bankrate, CNET's sister site.
The central bank is unlikely to cut rates any time soon, but positive signaling from the central bank and cooling inflation may ease some of the upward pressure on mortgage rates.
We track refinance rate trends using information collected by Bankrate. Here's a table with the average refinance rates supplied by lenders nationwide:
Average refinance interest rates
| Product | Rate | A week ago | Change |
|---|---|---|---|
| 30-year fixed refi | 7.33% | 7.44% | -0.11 |
| 15-year fixed refi | 6.54% | 6.79% | -0.25 |
| 10-year fixed refi | 6.70% | 6.77% | -0.07 |
Rates as of July 18, 2023.
How to find personalized refinance rates
It's important to understand that the rates advertised online often require specific conditions for eligibility. Your 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. 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?
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 your loan term. 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 increased throughout 2022, the pool of refinancing applicants contracted. If you bought your house when interest rates were lower than they are today, there may not be a financial benefit in refinancing your mortgage.
