In general, refinancing tends to payoff if you can lower your interest rate by at least 0.75 percentage points. This is a big part of why experts widely agree that mortgage rates will rise more in 2022, ending the year at anywhere between 3.4% and 3.7%. Although the Fed does not set mortgage rates, these changes will increase costs for mortgage lenders and those costs will be passed on to borrowers. This has led the Federal Reserve to start making changes to the easy monetary policy it put in place at the start of the pandemic.įollowing the Federal Open Market Committee meeting in December, policymakers from the Fed announced intentions to cut back on Treasury and mortgage-backed security purchases faster than previously thought and also to begin increasing the federal funds rate as soon as this spring. Why are rates rising? Supply chain shortages, high consumer demand for goods and labor shortages have pushed inflation to the highest level in decades. Current mortgage rates hit 3.22% in early January, the highest level since May 2020.

So far this year, rates have been trending higher. Hawaii Alaska Florida South Carolina Georgia Alabama North Carolina Tennessee RI Rhode Island CT Connecticut MA Massachusetts Maine NH New Hampshire VT Vermont New York NJ New Jersey DE Delaware MD Maryland West Virginia Ohio Michigan Arizona Nevada Utah Colorado New Mexico South Dakota Iowa Indiana Illinois Minnesota Wisconsin Missouri Louisiana Virginia DC Washington DC Idaho California North Dakota Washington Oregon Montana Wyoming Nebraska Kansas Oklahoma Pennsylvania Kentucky Mississippi Arkansas Texas View Today's Rates Mortgage rates are likely to rise “If you shop carefully and you are a well-qualified borrower there will always be a good opportunity for you to refinance,” says Melissa Cohn, regional vice president of William Raveis Mortgage.Īs the year begins, pay special attention to the following three areas to prepare for a successful refinance. Regardless of the type of refinance, you need to make sure the terms of the new loan fit your needs. Meanwhile, with rates still low historically speaking, it will generally still pay to convert an older adjustable-rate mortgage to a fixed-rate loan. Record levels of homeowner equity mean cash-out refinances are also on the table for many people. While it’s true that 2022 is unlikely to offer the same level of opportunity as 20, this year will still be a good time to refinance for millions of homeowners. With rates already rising - and experts forecasting continued increases - refinancing may seem less appealing now. Thanks to record-low interest rates, the past two years have been a mortgage-refinance bonanza. Rocket Mortgage gives customers access to customizable mortgage refinance based on real-time rates and their preferred loan terms and costs.

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