What to know about today’s best refinance mortgage rates

While the record-low house refinance rates from the COVID-19 era aren’t expected to return anytime soon, rates are still good enough that many homeowners can save thousands in interest, depending on their current rate. What’s “low” for one homeowner might not be for another. It all depends on how your initial rate compares to the rates you’re offered today. Even small rate drops can have a big impact. For example, lowering your refinance rate from 10% to 9% could save you tens of thousands of dollars over time.

Is now a smart time to refinance?

It might be a smart time to refinance if any of these are true for you:

• Your interest rate is higher than current market rates
• Your credit score has improved
• You want to switch loan terms, like from an adjustable to a fixed-rate loan
• ou need to lower your monthly payment
• You want to pay off your loan faster

Here’s how you could benefit from refinancing your mortgage:

• Lower your interest rate and monthly payment
• Lock in a more stable loan
• Pay off your mortgage sooner

How to qualify for low home loan refinance rates

Home loan refinance rates shift regularly based on market conditions, like inflation, the economy, and Federal Reserve policy. While you can’t control those changes, what you can control are the personal factors lenders use to determine the rate you’ll actually qualify for:

Have a higher credit score than when you got your original mortgage
If your credit score is higher now than when you first took out your mortgage, you may qualify for lower rates

Have a lower debt-to-income (DTI) ratio than before
If you're carrying less debt now compared to when you originally qualified, or your income has increased, you may get access to lower rates

Choose a shorter loan term
If your finances have improved, 15- or 20-year refinance rates could get you a lower overall loan cost compared to a 30-year mortgage.

Have built up at least 20% equity in your home
If your home has increased in value or you’ve paid down part of your loan, hitting that 20% equity mark can help you qualify for lower rates, (and remove your private mortgage insurance (PMI) payments)

Shop around
Comparing offers from multiple lenders now might uncover much lower rates than what you qualified for originally. Checking out more than one lender’s site gives you a better shot at finding the best refinance rates.

How to check your personalized home loan refinance rates

To view the rate you may qualify for, visit a lender’s page, answer a few basic questions, and get prequalified. This step typically doesn’t affect your credit score, since no hard credit check is required. Once you narrow down your choices and find a lender offering the best refinance rates, they’ll run a hard credit check to verify the information you provided if you choose to move forward with your application.

How to compare refinance mortgage rates using APR

When reviewing mortgage refinance rates today, you’ll usually see the APR (annual percentage rate) instead of just the interest rate. That’s not a trick. It’s actually the most accurate way to compare loan costs across lenders.

That’s why experts use APR when comparing rates. It includes more than just the base rate, giving a clearer picture of what you’ll actually pay.

• The interest rate shows the base cost of borrowing
• The APR includes that rate plus any required lender fees associated with closing on the new loan

By focusing on APR, experts can see which lenders are truly offering the most affordable loan over time, not just which one has the lowest refinance rates.

How the mortgage refinance process works

Refinancing is the process of replacing your current mortgage loan with a new one. When you refinance, you’re not adjusting your current loan, you’re replacing it completely. Your old mortgage is paid off, and you take out a new loan, often with a lower rate, different term, or both.

For example:

If you refinance a $250,000 mortgage at a 7% interest rate, you'll now pay 7% interest on that new $250,000 loan each year, plus any applicable fees. The old loan is gone. The 7% interest is your updated mortgage going forward.

Pro tip: You don’t have to refinance your mortgage with the same lender you secured your initial loan with. In fact, it can often be beneficial to shop around. Even if you’ve had a good experience with your original lender, a new lender could save you more over time.

What FHA refinance rates are and how they compare

This FHA streamline refinance program is meant to help borrowers who don’t meet the stricter requirements of conventional refinancing.

• This program is only available for current FHA mortgages
• Having an FHA loan doesn’t mean you have to use an FHA refinance; you can switch to a conventional loan if you qualify

FHA refinance rates are typically lower than conventional rates because these loans are insured by the Federal Housing Administration, and borrowers are required to pay private mortgage insurance (PMI) fees for the entirety of their loan. (With a conventional refinancing, you can drop PMI payments once you have 20% equity.)

If your credit isn’t great, or you don’t have 20% equity, FHA streamline can be a fast, low-hassle way to lower your rate. But if you can qualify for a conventional refi, it could save you more in the long run.

Most major lenders offer FHA refinance rates and conventional rates. Visit a lender’s site and enter your loan details to compare your options.

What experts predict for home refinance rates 2025

Most experts expect home refinance rates in 2025 to remain relatively stable or gradually decline, depending on inflation and Federal Reserve policy. While rates likely won’t return to the historic lows seen during the pandemic, many analysts believe they could ease slightly if inflation continues to cool and the Fed shifts toward cutting interest rates.

Experts expect refinance rates in 2025 to stay steady or slowly decline if inflation continues to ease. But rates will still vary by location. For example, home refinance rates in Texas are often lower than in states like California or New York, due to more affordable housing and strong lender competition. On the other hand, areas with higher costs or regional risks—like wildfires or hurricanes—may see higher rates.

Refinancing mortgage rates largely vary by borrower, based on credit score, home equity, loan type, and location. Even a small national shift may not affect everyone the same way. Comparing multiple lender offers remains the easiest way to find the best refinance rates.

What lower home refinancing rates can do for you

Even if home refinancing rates aren’t at record lows, they can still offer meaningful savings. You may benefit from refinancing if:

• Your new refinance rate is lower than your current mortgage
  A rate drop of 1% or more can lead to significant long-term savings
• Your monthly payments feel too high
  Extending your term can reduce the amount you owe each month
• You want to pay off your loan faster
  Refinancing into a shorter term—like a 15- or 20-year refinance rate—can help you pay off your mortgage sooner and reduce the total interest you’ll pay over the life of the loan
• You’ve built at least 20% home equity
  You may be able to remove private mortgage insurance (PMI), which could lower your monthly payment by hundreds
• You want to switch between a fixed and adjustable rate
  A fixed-rate mortgage (FRM) keeps your interest rate and monthly payment the same for the life of the loan, even if market rates increase
  An adjustable-rate mortgage (ARM) usually starts with a lower rate for the first few years, which can save money early on