Compare Current Mortgage Refinance Rates

Current Mortgage Rate Trends

Because mortgage refinance loans tend to be riskier than purchase loans, they tend to come with slightly higher interest rates. However, homeowners with credit scores over 740 may qualify for similar rates to purchase loans, according to Freddie Mac.

Over the past 18 months, mortgage refinance rates have mostly hovered between 6% and 7%. Mortgage lenders use the 10-year Treasury note yield as a benchmark. The yield fluctuates based on investor expectations about certain economic indicators.

^*Source: Curinos LLC, June 6, 2025; assumes a 720 FICO^® Score, $350,000 mortgage
^**Source: FRED via Optimal Blue, June 6, 2025
Notes: Rates can vary by data source; monthly payment calculation uses APR and assumes a $350,000 mortgage and 20% down; APR calculation assumes 5% in fees

Mortgage Rate Trends for the Last 5 Years

Mortgage refinance loans spiked in popularity in 2020 and 2021, largely due to record-low interest rates. However, mortgage rates have increased since then, primarily due to the Federal Reserve's efforts to combat rising inflation. Here's a look at interest rate trends for purchase mortgages over that time period.

30-Year Mortgage Rate Trends 2020 to 2025

What Affects Refinance Rates?

As previously mentioned, refinance interest rates are typically a little higher than purchase rates because refinance borrowers are more likely to default compared to homeowners who keep their original loan.

However, there are other factors that may impact what you pay to refinance your mortgage loan:

• Credit score: Lenders use your credit score to evaluate how reliably you manage debt. Higher scores suggest less risk, which typically results in lower refinance rates.
• Debt-to-income ratio: A lower debt-to-income ratio (DTI) shows that you have more breathing room in your budget, making you less risky in the eyes of lenders. A high DTI, on the other hand, may lead to higher rates or limited options.
• Loan amount: Larger refinance loans can carry more risk for lenders, especially in uncertain market conditions. As a result, higher loan amounts may result in slightly higher interest rates. This also applies if you choose to roll your closing costs into the new loan.
• Repayment term: Shorter loan terms usually come with lower interest rates because the lender gets repaid faster and faces less long-term risk. Longer terms tend to have higher rates.
• Equity in your home: The more equity you have, the lower the risk for the lender. If you're refinancing with at least 20% equity, you may qualify for better terms.
• Refinance type: Whether you're doing a rate-and-term refinance or cash-out refinance can affect your rate. Cash-out refinances typically come with slightly higher rates due to the increased loan balance and risk. Additionally, government-backed refinance loans may offer lower rates compared to conventional refinance loans.
• Market conditions: Broader economic factors like inflation, Federal Reserve policy and investor demand for mortgage-backed securities all play a role in determining the rates lenders offer.

Learn more: How Much Does It Cost to Refinance a Mortgage?

Mortgage Refinance Requirements

Mortgage refinance loans often have similar requirements to primary mortgages. However, some lenders may impose stricter standards, especially if you're taking cash out or refinancing an investment property.

Here are the basic requirements to qualify for a refinance:

• Credit score: Most lenders require a score of at least 620, though a higher score can help you qualify for better rates.
• DTI: Lenders typically prefer a debt-to-income ratio below 43%, though some may allow higher ratios with strong compensating factors.
• Home equity: You'll generally need at least 20% equity for the best rates, but less is possible for a rate-and-term refinance. For cash-out refinances, many lenders cap borrowing at 80% of your home's value.
• Income and employment: Expect to provide at least two years of income and job history, verified through tax returns, W-2s or pay stubs.

Learn more: How Does Refinancing a Mortgage Work?

Pros and Cons of Refinancing

Before you refinance your mortgage loan, it's important to carefully consider the potential advantages and disadvantages for your financial situation. Here's a look at some of the general benefits and drawbacks to keep in mind.

Learn more: Pros and Cons of Refinancing Your Home

Should You Refinance Your Mortgage?

Refinancing your mortgage can lower your rate, change your loan terms or help you access home equity. But depending on your goals and financial situation, it may or may not be the right move. Here are some situations where refinancing could make sense:

• Your credit score or income has improved since you first got your mortgage.
• Interest rates have dropped since you closed on your loan.
• You want to switch from an ARM to a fixed-rate mortgage.
• You need to lower your monthly payment by extending your repayment term.
• You want to tap into your equity through a cash-out refinance.
• You plan to stay in your home long enough to recover the closing costs.

On the other hand, refinancing might not make sense if:

• Your credit score or income has declined since you took out your original mortgage.
• Interest rates are higher now than when you first closed.
• You don't have enough equity to qualify for favorable terms or a cash-out refinance.
• You're close to paying off your current mortgage and don't want to reset the term.
• You're moving soon and won't stay in the home long enough to break even on closing costs.

Learn more: When Should You Refinance Your Mortgage?

How to Get the Best Refinance Rate

While there's nothing you can do about economic factors, there are steps you can take to improve your odds of locking in a great deal:

• Improve your credit score. Lenders typically offer the best refinance rates to borrowers with strong credit. Check your Experian credit report and FICO^® Score to spot issues and work on improvements before applying.
• Shop around. Refinance rates and fees can vary widely by lender. Get quotes from at least three to five lenders to compare terms and find the best deal.
• Consider a shorter term. Refinancing into a shorter loan term, such as 15 years instead of 30, can help you qualify for a lower interest rate. Just make sure the higher monthly payments fit your budget.
• Increase your home equity. The more equity you have, the lower the risk to the lender. Making extra payments or waiting until your home value increases may help you qualify for better rates.
• Lock in your rate. If you're happy with a quoted rate, ask your lender about a rate lock to protect against market fluctuations while your loan is processed.
• Lower your DTI. A lower debt-to-income ratio shows you're not overextended. Paying down high-interest debt before applying can help you qualify for better rates.

Alternatives to Refinancing

Refinancing isn't the only way to manage your mortgage or improve your financial situation. Depending on your goals, one of these alternatives might be a better fit:

• Loan recast: If you have a lump sum of cash, some lenders allow you to make a large payment toward your principal and reamortize your loan. A mortgage recast keeps your current interest rate but lowers your monthly payment.
• Mortgage modification: If you're struggling financially, your lender may be willing to modify your existing mortgage to make it more affordable through a lower interest rate, extended term or paused payments.
• Making extra payments: If your goal is to pay off your loan faster or save on interest, consider making extra principal payments. Even small additional amounts each month can add up over time.
• Second mortgage: Instead of refinancing your entire mortgage and taking cash out, consider borrowing against your home equity with a home equity loan or home equity line of credit instead. Closing costs will be lower, and you don't have to worry about changing existing mortgage terms.
• Other loan options: If you're mainly interested in accessing equity, explore personal loans or other lower-cost borrowing options that don't involve touching your mortgage.

The Bottom Line

Refinancing your mortgage can be a powerful tool to lower your interest rate, adjust your loan terms or tap into home equity. However, it's not the right move for everyone. Carefully weigh the costs and benefits based on your current financial picture and long-term goals before moving forward.

As you prepare to refinance, it's important to stay on top of your credit. With Experian, you can monitor your credit for free, making it easier to ensure you're putting your best foot forward.