30 year refinance rates explained for homeowners considering a reset

What these rates mean

A 30-year refi replaces your current mortgage with a new loan spanning three decades. The headline rate affects your monthly payment, while the APR captures fees and points. Even a 0.5% change can save or cost thousands over time.

How lenders price them

Lenders look at credit score, equity, loan size, property type, and the broader bond market. If your FICO climbs from 680 to 740, you may see a noticeably lower quote. Paying discount points can buy a smaller rate in exchange for upfront cash.

When a refi makes sense

Run a breakeven test: divide total closing costs by your monthly savings to estimate months to recover. If you plan to stay beyond that, refinancing can pay off.

• Compare at least three offers on the same day.
• Ask for zero-point and point options.
• Check if your current loan has a prepayment penalty.
• Consider resetting to 20 or 15 years to build equity faster.
• Lock your rate once you’re comfortable with the math.

Example: Dropping from 7.25% to 6.5% on $400,000 could trim roughly $190 per month, before taxes and insurance.