Compare refi mortgage rates Nov. 27, 2024

Current refi mortgage rates

Here’s where average refi rates stand for a variety of mortgage types, according to Zillow. 

Conforming loans

Government-backed loans

Jumbo loans

Mortgage rates news for the week of Nov. 27, 2024

As 2024 nears a close, the mortgage market seems to be in a moment of slightly easing interest rates, after a period of stubborn highs. Let’s take a look at where the market is now and how homebuyers are behaving.

Rates dip and applications pick up

Despite the Federal Reserve’s decision to cut the federal funds rate in both September and November, hopes for a corresponding decrease in mortgage interest rates were initially dashed. These rates instead climbed and then remained close to 7% for fixed-rate, 30-year home loans, as reported by Optimal Blue data. But in late November, mortgage rates moved a little bit in the opposite direction.

Concurrent with this shift, the Mortgage Bankers Association reported an increase in mortgage applications for the latter part of November. On Nov. 27, the MBA announced that loan application volume had risen by 6.3% for the week ending Nov. 22, compared to the previous week.

The MBA attributed this uptick primarily to an increase in mortgage purchase loans, noting that refinance activity had actually decreased slightly.

New mortgage payments are up

However, potential homeowners still face challenges in the current market, with affordability decreasing and monthly mortgage payments on the rise. The MBA reported on Nov. 26 that the national median payment applied for by purchase applicants had increased to $2,127 in October, up from $2,041 in September.

For those applying for conventional loans, this increase was from $2,053 to $2,134 over the same period. Applicants for FHA loans saw a rise from $1,753 to $1,842.

Smaller homes are in

Zillow’s housing market predictions for 2025, released on Nov. 25, 2024, suggest a trend towards smaller homes as a more affordable option. The analysis noted a 35% increase in listing descriptions featuring the word “cozy” when comparing 2024 to 2023.

Learn more: U.S. homes aren’t just more expensive. They’re also getting smaller.

There may be some positive news for prospective buyers in terms of housing inventory. 

“Zillow forecasts 2.6% home value growth in 2025, a relatively slow pace that is similar to this year’s growth,” the analysis notes. “For existing home sales, Zillow forecasts 4.3 million in the coming year, up slightly from 4.1 million in 2023 and a projected 4 million in 2024.”

Housing shortage still top of mind

Nevertheless, America’s housing shortage remains a significant obstacle for those seeking to own or upgrade their homes. A Brookings analysis published on Nov. 26 estimated that in recent years, the shortage has ranged from 1.5 million all the way up to 5.5 million units.

Learn more: America needs to ‘build, baby, build’ to fix the housing crisis, Moody’s says.

How does mortgage refinancing work?

Refinancing a mortgage involves replacing your existing home loan with a new one, often with a lower interest rate, a different loan term or other features that help improve your finances in some meaningful way.

The refinance process is similar to a purchase mortgage approval. It’s generally quicker, though, because there are fewer steps—there’s no home inspection or seller negotiations to navigate.

But you should know that while refinancing can be a smart financial move, it’s not free.

Costs to refinance a mortgage

Like a traditional home loan, refinancing a mortgage involves closing costs that run about 2% to 6% of the loan amount. So if you do a rate-and-term refi on a $300,000 loan, you might  pay anywhere from $6,000 to $18,000 in refi closing costs.

Here are some of the costs you might see on your refinance loan estimate:

• Lender origination fees.
• Appraisal fees.
• Title search and insurance fees.
• Loan application fees.
• Survey fees.
• Attorney fees (if required in your state).
• Recording fees.
• Prepayment penalties (if your current loan servicer charges one).

Types of mortgage refinance loans

You can choose from several types of mortgage refinance loans. Here are the most common options:

• Rate-and-term refinance: This is the most popular refi option that allows you to lower your interest rate and/or shorten your loan term. While shortening your loan term does typically earn you a lower rate and hefty lifetime interest savings, you’ll be locked into higher monthly mortgage payments.
• Cash-out refinance: With a cash-out refi, you can tap your home’s equity by replacing your existing loan balance with a new, larger one and withdraw the difference in cash. You can use the money for home improvements, consolidating high-interest debt or other financial goals.
• No-closing-cost refinance: With this option, your lender covers your closing costs in exchange for charging you a higher interest rate. If you don’t have cash upfront for closing costs and could otherwise benefit from a refinance, this option is worth looking into.
• Streamline refinance: Available to existing FHA, VA and USDA loan borrowers, these refi options involve less documentation and a more straightforward application and approval process.

When is a good time to refinance your home? Here’s how to decide

Refinancing makes most sense when you can tangibly improve your financial situation in some way. Here are some times when a mortgage refinance is worth considering:

• Mortgage interest rates have dropped significantly.
• You’ve improved your credit score or lowered your debt-to-income ratio (DTI) and thus have a good chance to qualify for a lower rate.
• You’ve built at least 20% equity in your home.
• You want to switch from a Federal Housing Administration (FHA) loan to a conventional loan to drop costly lifetime mortgage insurance premiums.
• You want to pull out cash for home improvements or to consolidate high-interest debt.
• You want to switch from a riskier adjustable-rate mortgage (ARM) to a stable fixed-rate loan to avoid higher mortgage payments when your ARM resets.

“The window of opportunity to refinance is often short,” says Chad Freeman, a senior loan officer with Embrace Home Loans in Rockville, Maryland. “The key is to be ready by planning now and not when the rates drop low enough to pull the trigger. My advice is to speak to your qualified mortgage advisor now, so that you can take advantage when the opportunity strikes.”

How to get the best mortgage refi rate possible

To ensure you snag the best mortgage refi rate you can, here are some steps to take before you apply:

1. Ensure you have 20% equity. If you have less than 20% equity, your lender might charge a higher interest rate and private mortgage insurance (PMI). You can check your home’s current value online through a property search portal to get an idea of what it’s worth. However, your lender will likely require a property appraisal to get a current market valuation.
2. Pull your credit score and report. Your interest rate offer will depend heavily on your credit score. Many credit cards and banks provide this access for free. Also, get a free copy of your credit report from the three major credit agencies at AnnualCreditReport.com, and look for any errors you may need to address.
3. Pay down some debt. If you’re carrying a mountain of debt, chances are you might have a high DTI ratio, which can impact your borrowing power and interest rate offers. Focus on paying down credit cards to lower your credit usage rate below 30% of each available credit limit to lower your ratio.
4. Shop around for a refinance loan. Don’t settle on the first refi offer you get. It pays to shop around with at least three different refinance lenders so you can compare rates, terms and loan programs to ensure you’re not leaving potential savings on the table.

Calculate mortgage refinance savings

Wondering just how much a mortgage refinance can save you? Let’s take a look at a few examples.

Example No. 1: A rate-and-term refinance to lower your rate

Let’s crunch some numbers through a mortgage refi calculator. Let’s say you’re one year into repaying an existing mortgage with a balance of $300,000 at 7.5%, with monthly principal and interest payments of $2,097.64. 

If mortgage rates drop to 6%, here’s what your new loan would look like approximately:

• New monthly payment: $1,799
• Monthly savings: $299/month
• Lifetime savings: $72,269
• Upfront fees: $6,000
• Break-even point: 21 months

Example No. 2: A rate-and-term refinance to shorten your loan term

Using the same example starting loan figures above, let’s shorten the loan term to 15 years, drop the rate to 5.5%—to reflect that 15-year mortgages often have lower rates than those with 30-year terms—and see how the math works out:

• New monthly payment: $2,451
• Extra monthly cost: $354/month
• Lifetime savings: $278,558
• Upfront fees: $6,000

While in the first scenario you break even after a little less than two years, in the second, it takes nearly 18 years before you come out ahead. The lifetime savings in the second example, however, are massive. Either way, you should go in knowing you’re playing the long game.

Mortgage refinancing pros and cons

Note that not all of these pros and cons will apply to all refis—it depends on the type of refi you opt for and the loan terms you can get. But in general, these are factors to consider:

Mortgage refi trends

During the COVID-19 pandemic in 2020 and 2021, mortgage rates sank to record lows below 3% after the Fed stepped in and cut the federal funds rate to keep the economy afloat. This prompted millions of homeowners to refinance. In fact, more than 50% of outstanding mortgages have a rate of 4% or lower while more than 75% have a rate of 5% or lower, according to Realtor.com in June 2024.

As the pandemic recovery took hold from 2022 on, inflation surged, prompting the Fed to hike the federal funds rate 11 times between March 2022 and July 2023. Mortgage rates climbed, too, and hovered between 6% and 7% for close to two years, causing refinance activity to all-time lows.

That is, until recently.

According to Freddie Mac, 30-year fixed mortgage rates averaged 6.46% as of Aug. 22, down 77 basis points from 6.98% a year ago. With the Fed signaling it intends to cut rates in September, mortgage rates are expected to follow suit and, with it, bring a potential surge in new refi activity.

Learn more: Mortgage rate forecast—How low can we go in 2024 and 2025 once the Fed cuts rates?

Mortgage rates (including refi rates) are commonly considered to be closely tied to the 10-year U.S. Treasury index, Freeman with Embrace Home Loans explains. If the 10-year Treasury drops to 3.25% and the spread goes to 2.5%, then 30-year fixed rates could potentially drop to 5.75%. 

And if the 10-year drops to 3.25% and the spread goes to 2.25%, then 30-year fixed rates could potentially drop further to 5.5%, Freeman says.

“There is, of course, no crystal ball and mortgage rates, like everything else, will be subject to various layers of economic conditions and decisions made by the Fed,” he adds.

Learn more: Should 40-year mortgages replace the 30-year term as America’s standard?

The takeaway

Refinancing your mortgage can be a wise move that helps you reach specific financial goals, but it involves paying closing costs and other considerations. To get the best refi rates possible, make sure your credit and finances are in good shape so you’re ready to strike when rates drop. An experienced loan officer or mortgage broker can help you evaluate your refi options, costs, potential savings and other factors to help you decide if now is a good time to refinance.

Frequently asked questions

Can I refinance more than once?

You can refinance a mortgage several times, however, you’ll pay closing costs each time and you may encounter prepayment penalties. 

What factors affect mortgage refinance rates?

Mortgage refinance rates, like mortgage rates, change daily and even hourly based on mortgage market conditions, inflation, unemployment, Federal Reserve monetary policy and your specific financial and credit profile.

Can I lock in a mortgage refinance rate?

You can lock in a mortgage refi rate to ensure you don’t end up paying more if rates go up before closing on your new loan. However, know that some lenders charge a rate-lock fee for this benefit, which adds to your overall borrowing costs.

How long does it take to refinance a mortgage?

Refinancing a mortgage typically takes 30 to 45 days, but this timeline can vary by lender, the loan program, the complexity of your application and borrower volume.