The average refinance mortgage rate for a 30-year, fixed-rate loan stands at 6.35% as of November 18, 2025, according to data from Zillow. Homeowners wishing to refinance their mortgages can explore various loan types and terms available in the current market.
Understanding Mortgage Refinancing
Mortgage refinancing is the process of replacing an existing home loan with a new one. Borrowers must apply and meet lender requirements, including credit history, income stability, and debt-to-income (DTI) ratio. This process may slightly impact credit scores due to hard inquiries, and there’s a risk of denial if the conditions are not met.
Current Trends in Mortgage Rates
Mortgage rates have been relatively stable, hovering around the 7% mark for 30-year fixed-rate loans. Although rates showed signs of dipping slightly toward the end of February, they remain well above the pandemic-era lows of 2% to 3%. As of the third quarter of 2024, approximately 82.8% of homeowners with mortgages secured rates below 6% according to Redfin.
Starting in late August and early September 2025, mortgage rates began to decline ahead of the Fed’s scheduled meeting in mid-September. Following a quarter-point reduction in the federal funds rate at that meeting, the trend continued with another cut in October.
When to Consider Refinancing
Refinancing is not without costs, making it essential to evaluate potential savings. A common guideline suggests refinancing may be beneficial if borrowers can secure a rate that is at least 1% lower than their current rate. For example, switching from a 7% loan to a 6% rate can significantly reduce interest charges over time.
- Cash-out refinances allow homeowners to access equity for various purposes.
- Sometimes, borrowers switch from a 15-year to a 30-year term to lower monthly payments.
- Refinancing can involve changing loan types, such as moving from an FHA loan to a conventional one.
Costs Associated with Refinancing
Closing costs for refinancing range from 2% to 6% of the loan amount. For instance, a $300,000 loan might incur costs between $6,000 and $18,000. Common fees include:
- Lender origination fees
- Appraisal fees
- Title search and insurance fees
- Loan application fees
- Survey fees
- Attorney fees
- Recording fees
- Prepayment penalties (where applicable)
Types of Refinance Loans
Several refinance options exist, and choosing the right one depends on individual circumstances. Popular refinancing types include:
- Rate-and-term refinance: Allows for lower interest rates or changes in loan terms.
- Cash-out refinance: Involves taking out a new, larger loan to access home equity.
- No-closing-cost refinance: The lender covers closing costs in exchange for a higher interest rate.
- Streamline refinance: Designed for FHA, VA, and USDA borrowers, providing a simplified process with less documentation.
Refinancing with Current vs. New Lenders
Homeowners are not obliged to refinance with their original lender. Shopping around can yield better rates and services. However, existing lenders might provide incentives like waiving closing costs, making it worth a discussion. Additionally, if the mortgage has been sold to Fannie Mae or Freddie Mac, homeowners may qualify for special refinancing programs.
