3.09%: This week's 30-year-fixed-rate

2.35%: This week's 15-year-fixed-rate

Historical averages are based on Freddie Mac Primary Mortgage Market Survey®

Mortgage Refinance FAQs

WHAT IS A MORTGAGE REFINANCE?

When you refinance, you get a new mortgage to replace your current home loan. Just as when you bought the home, you will most likely undergo a credit check and pay closing costs. Some lenders offer a "no closing cost" refinance, in which you pay a higher interest rate in exchange for paying little or nothing at closing.

WHY REFINANCE YOUR MORTGAGE?

There are multiple reasons to refinance your mortgage. People usually refinance to save money, either in the short run or the long run, and sometimes to borrow against their equity. Here are some of the main reasons to refinance:

To get a lower mortgage rate. If mortgage interest rates fall after you get the loan, you may be able to refinance to a lower rate. This can result in smaller monthly payments.

To shorten the term. Refinancing from a 30-year mortgage to a shorter-term loan (15 or 20 years, most commonly) might increase your monthly payment (even with a lower interest rate), but it decreases the overall interest you pay over the life of the loan.

To get rid of mortgage insurance. When you buy a home with a down payment of less than 20%, you have to pay for mortgage insurance. Refinancing is one way to stop paying private mortgage insurance, and it's the only way to get rid of FHA mortgage insurance.

To replace an adjustable-rate mortgage, or ARM, with a fixed-rate loan. Rather than enduring the uncertainty of annual interest-rate adjustments with an ARM, you might refinance to a fixed-rate loan so you don't have to worry that the rate will rise.

To get your hands on equity. With a cash-out refinance, you borrow more than your current loan balance and take out the difference in cash. A cash-out refinance is a popular way to pay for home improvements.

WHEN CAN YOU REFINANCE A MORTGAGE?

You may refinance as often as it makes financial sense to do so. There is an exception: Some lenders require "seasoning" between refinances — in other words, they require you to have the loan for a specified number of months before refinancing again.

HOW DO YOU REFINANCE YOUR MORTGAGE?

The first step in refinancing is determining your goal. Do you want to reduce your monthly payment? Shorten the term? Get rid of FHA mortgage insurance? Move from an ARM to a fixed rate? Borrow from equity?

After you have identified your goal, you’ll shop for a refinance lender, apply and close on your new mortgage, the same way you did when you bought the home.