The mortgage refinance business will likely grow a ton in 2024. More than 35% of VA rate or term refinances have loan-to-value ratios over 100%. NerdWallet and their expert Joel Kan shared these details. Even though mortgage rates bounce up and down a lot, you still can save a lot of money. Premium refinance options offer lower rates and better terms than counterfeit options. You can take advantage of the market with a Best Price Guarantee. Free installation is included with these offers. Refinance today to secure your future.
Best mortgage refinance rates 2024
Did you know a cool 2024 fact about home loan refinances? Over 35 percent of VA rate-and-term refinances had loan-to-value ratios above 100% that year. This number shows how active the 2024 mortgage refinance industry will be. This section will cover the best 2024 mortgage rates. It will look at interest rate trends, loan types, and other factors that affect those rates.
Interest rate trends
Overall trends in 2024 and 2025
Mortgage rates bounced around a lot in 2024. They stayed pretty high for most of the year. But there was a short stretch of lower rates in the fall. Leaders at the U.S. Federal Reserve planned two interest rate cuts in 2024. Data confirms this would have kept mortgage rates from climbing even higher. Mortgage rates hit a 7.04% high in January 2025. By March of that year, they dropped to the mid-to-low 6% range. Homeowners thinking of refinancing their home in early 2025 probably saw those falling rates. That shift could have changed what they decided to do. Here’s a quick pro tip to remember: Keep an eye on Federal Reserve announcements. These announcements can directly impact mortgage rates. NerdWallet says you should stay up to date on the latest trends. That will help you get the best possible refinance rate.
Weekly national mortgage interest rate trends
Weekly mortgage rates have shifted up and down a lot lately. Joel Kan says the 30-year fixed mortgage rate sits at 6.49 percent. That’s the lowest this rate has been since October 2024. The average 15-year refinance rate dropped 0.05 percentage points. The average 20-year refinance rate fell 0.09 percentage points. Average jumbo 30-year refinance rates also went down during this time. If you’d watched these weekly shifts, you could have timed your refi application to save money. You can use rate-tracking apps or sign up for mortgage rate news to keep up with weekly changes. Comparing rates from several lenders is a great way to get the best rate.
Forecasts for end of 2024
The Federal Reserve planned to lower interest rates. Those planned cuts shaped expert forecasts. But actual market conditions caused lots of sharp ups and downs. How markets reacted to things like inflation and unemployment rates mattered a lot. For example, if inflation had stayed high, the rate cuts wouldn’t have had their intended effect. Here’s a helpful tip: talk to a mortgage adviser about how the economic outlook might impact your choices. You can use our refinance closing costs calculator to figure out your total expenses.
Rates by loan type
In 2024, different kinds of loans had different rates. Each loan type had its own rate trend that year. For example, 30-year fixed home loans dropped a lot really fast. Their rate fell to 6.49 percent in just a short amount of time.
| Loan Type | Rate Movement in 2024 |
|---|---|
| 30 – year fixed – rate mortgage | Decreased to 6.49% |
| 15 – year refi | Shed 5 basis points |
| 20 – year refi | Reduced by 9 points |
| Jumbo 30 – year refi | Declined |
Here’s simple advice for picking the right loan for you. First, look at your current money situation. Also think about what money goals you’re working toward. This will help you figure out which loan type fits best. NerdWallet says you should do one more important thing. Compare the rates different lenders offer for all kinds of loans.
Factors affecting rates
In 2024, a few different things affected mortgage rates. How much home equity you have is a big factor. Your debt compared to your income also matters. Your credit score and past bill payment history are important too. To get a low mortgage rate, you usually need to meet a few rules. Your home equity should be between 15 and 20 percent. Your total debt should be less than half of your income. Your credit score needs to be higher than 620. You also need a track record of paying all your bills on time. If you have good credit and low debt compared to income, you’ll likely get a better refinance rate. If you plan to apply for refinancing soon, prep first. Work on raising your credit score before you apply. Also try to lower how much debt you have compared to your income. Those are the key takeaways.
- Home loan rates for 2024 to 2025 are expected to change a whole lot. They’ll jump up and down often instead of staying at one steady number.
- It’s really important to compare different types of loans. Each kind of loan has different rates than the rest.
- Refinancing rates don’t get picked out of thin air. They depend on a bunch of different things. One is how much equity you have in what you’re refinancing. Another is how your total debt compares to your income. Your credit score also plays a big role here. How well you’ve paid past bills counts too. A handful of other similar small factors matter as well.
Cash-out refinance vs HELOC
Mortgage rates bounced up and down a lot in 2024. Even so, the average rate stayed pretty high overall. They dropped slightly for a short stretch that fall. Even with that small break, they still affected common home loan options. Those options include cash-out refinancing and home equity lines of credit. In 2024, more than 35% of VA rate and term refinances had loan-to-value ratios over 100%. This number shows just how tricky home borrowing can be.
Key differences
Loan structure
Cash-out refinancing swaps your current home loan for a bigger new one. You get a single lump sum of cash up front. Let’s say you owe $200,000 on a house worth $300,000. You could refinance for $250,000 to get $50,000 in cash. A HELOC is different—it’s a second separate home loan. It works a lot like a credit card tied to your home’s value. You can borrow money from it as you need it over time. A 2023 SEMrush study looked at common borrower choices. Most people pick cash-out refinancing for big one-time costs, like home renovations. HELOCs are better for costs that shift or come up regularly over time. Cash-out refinancing works great if you have one big, clear cost to cover. If your costs are more random and less regular, a HELOC is probably the better fit.
Credit requirements
To get a cash-out refinance, you first need home equity. That equity should make up 15 to 20% of your home’s value. Your debt-to-income ratio needs to be below 50% too. You need a credit score of 620 or higher to qualify. You also must have a history of paying all your bills on time. Steady, regular income is another key requirement to meet. Exact rules can be a little different for each lender. The included table shows credit limits for different types of loans.
| Loan Type | Equity Requirement | Debt – to – Income Ratio | Credit Score |
|---|---|---|---|
| Cash – out Refinance | 15% – 20% | Below 50% | Over 620 |
| HELOC | Sufficient (varies) | Low | Good (varies) |
Interest rates
Cash-out refinance mortgage rates hit a high in January 2025. They dropped to the mid-6% range in March. The current 30-year fixed rate is 6.49 percent. That’s a 0.2 percent drop over the last two weeks, and the lowest level since October 2024. HELOC rates started around 10% in early 2024. The average HELOC rate will drop below 8% soon. HELOCs have variable rates. That means your payments may go up or down. The change depends on current rates and how much you borrowed. A cash-out refinance with a fixed mortgage rate might suit you better. Go with that option if you want a predictable payment schedule. If you don’t mind a little risk for lower starting rates, a HELOC may be a better fit.
Pros and cons
A cash-out refinance shares most perks with regular refinancing. It can get you a lower interest rate or other helpful changes. You also get a big lump of money right up front. It will make your mortgage bigger and stretch out your payment term. HELOCs are really flexible and give you the best cash flow. Your first HELOC payment is nice and small when you start. If you don’t pay off a HELOC quickly, your interest rates will rise over time. John needed to cover his son’s college tuition costs. He chose to refinance his mortgage and got a single lump sum payment. Even though his total mortgage went up, he locked in a steady fixed interest rate. Sarah wanted to make home improvements a little at a time. She picked a HELOC, so she could borrow money only when she needed it. Her monthly payments shift up or down as interest rates change, though.
Interest rate structures
Cash-out refinances often come with fixed-rate options. Fixed rates mean your monthly payments stay steady. This is a great option for planning your finances long-term. HELOCs, as we mentioned earlier, have variable rates. If market interest rates go up, your HELOC payments will go up too. The Google Partner-certified strategy says you have to watch interest rate trends closely if you’re thinking about a HELOC. Here’s a handy pro tip to remember. Keep an eye on Federal Reserve announcements. These announcements can affect interest rates for both HELOCs and cash-out refinances.
Impact on borrowing cost
Cash-out refinance rates are higher than your current mortgage rate. This lowers overall costs for home equity loans or lines of credit. Home equity lines of credit are often called HELOCs for short. Let’s use a quick example to make this clear. Say your current mortgage rate is 5%. You can get a cash-out refinance at 6.5%. HELOC rates right now are around 7%. That means home equity loans including HELOCs cost much less total. Let’s walk through a simple cost calculation. Suppose you borrow $50,000 total. If you pay the loan back over a few years, and your average interest rate is low, your total borrowing cost could still be higher than a HELOC.
Eligibility criteria
As we mentioned earlier, cash-out refinancing has eligibility rules. These rules cover your home equity, debt compared to income, credit score, and past payment history. You also have to show you can pay back a HELOC loan. To do that, you need a high credit score, steady income, and low debt relative to your income. There is a technical checklist to see if you qualify.
- Check your home equity percentage.
- Calculate your debt – to – income ratio.
- Review your credit score and credit report.
- You should collect proof of any payments you’ve made. You also need to gather your past income history. These are the key takeaways to remember.
- You can tap into your home equity in two different ways. The first is called cash-out refinancing. The second option is known as a HELOC.
- When you’re choosing between two options, first think about your money goals. You should also look at what kinds of expenses you have. Finally, think about how well you can handle changes to interest rates.
- Check out rates and qualification rules from different lenders. Use our mortgage calculator to compare your different options. You can see how those choices change your total borrowing costs. NerdWallet suggests you explore all options before you decide. The best moves are to get quotes from several lenders, and talk to a mortgage expert for advice.
FICO score for refinance approval
You might not know how much FICO scores affect home loans. They have a big impact on most mortgage applications. Most lenders rely on FICO scores to make these loan choices. They use them to approve or deny mortgage refinance applications. If you own a home, you probably want better loan terms and rates. It’s important to understand FICO score requirements to get those.
General requirements
If you want to refinance a mortgage, most lenders accept FICO scores as low as 620. Scores of 740 or higher usually get you the best possible rates and terms. A high FICO score can save you thousands of dollars over the life of your mortgage. Someone with a 740 or higher FICO score gets a lower interest rate than someone with a score below 620. That lower rate means you will have smaller monthly payments. To raise your FICO score, pay off your credit cards and don’t open too many credit accounts.
Requirements by loan type
Conventional loan
Regular home loans have stricter FICO score rules than government-backed ones. A FICO score of 680 or higher is good for regular refinance loans. A 2023 SEMrush study found lenders give better terms to higher-score regular loan borrowers. That’s because the government does not guarantee these types of loans. A person with a 700 FICO score might get a lower refinance rate than someone with a 650. Here’s a useful tip to keep in mind. If your FICO is just below the ideal range for regular loans, wait a couple of months to improve it. Pay down any debts you owe first. Fix any mistakes you spot on your credit file too.
FHA loan
FHA loan rules are more flexible than most. That’s because the Federal Housing Administration insures them. You can refinance an FHA loan with a FICO credit score as low as 580. That’s great news for people who don’t have perfect credit. Homeowners with a 580 score can use this refinance option even if they’ve had past money troubles. If you’re applying to refinance your FHA mortgage, you need to meet two key rules. You must have a steady, reliable income. You also have to keep your debt-to-income ratio below 50%.
VA loan
Veterans, active duty service members, and their spouses qualify for VA loans. VA refinancing has no set minimum FICO credit score. Most lenders, though, will require a score of at least 620. In 2024, over 35% of VA rate/term loans had loan-to-value ratios above 100%. This means VA refinancing is a great option even if your credit isn’t perfect. A VA-approved lender can guide you through the refinancing process. They can also explain all the requirements you need to meet. NerdWallet recommends you check your FICO scores regularly. Try to improve your score if you can. NerdWallet also has resources to help you compare mortgage rates. That way you can find the refinancing options that fit you best. Use our FICO simulator to see how your score changes if you take different actions. These are the key takeaways.
- Most home loan refinancing requires a FICO score of 620 or higher. If your score is 740 or above, you’ll get the very best interest rate.
- To get a conventional loan, you usually need a certain FICO score. That score has to be above 680 most of the time.
- You can refinance an FHA loan even if your credit score is just 580.
- The VA doesn’t set a minimum credit score for its loans. Most lenders that offer these loans have their own rule, though. They almost always require a credit score of at least 620.
Refinance closing cost calculator
Closing costs run between 2% and 5% of your total loan amount. These costs affect the total cost of refinancing. It’s important to know what costs you can expect. A refinance cost calculator is a really helpful tool for this process.
How it works
A closing cost calculator uses many factors to estimate your closing fees. Those fees are what you’ll probably pay when you finalize a home loan. The factors include appraisal fees and title insurance. It also uses your current loan amount for its estimate. It looks at your current mortgage rate too. If you’re thinking of switching to a new rate, it uses that as well. Let’s say you’re refinancing your $200,000 home mortgage. You plug your info into the closing cost calculator. It estimates your closing costs will be around $6,000. That equals 3% of your total loan amount. You can use this info to decide if refinancing makes sense for you. Here’s a quick pro tip for using the calculator: Gather all info about your current loan first. Also collect details on any possible future loans before you start. That will give you much more accurate results from the calculator.
Importance of using a calculator
A 2023 SEMrush study has a helpful finding for people refinancing loans. People who use a closing cost calculator make smarter refinancing choices. Calculating these costs helps you compare refinance options faster. It also keeps you from running into unexpected extra fees. Let’s say someone is picking between two different refinance lenders. If they skip the calculator, they might only pay attention to interest rates. When they used the calculator, they noticed a key difference. One lender had a lower interest rate but way higher closing costs. That let them choose the option that saved them the most money total. NerdWallet recommends using a refinance cost calculator to save time and money. The best calculators come from trusted banks or mortgage comparison websites.
Interactive element suggestion
You can use our closing cost estimator to figure out your closing costs. Below are the key points you need to keep in mind.
- When you refinance a home mortgage, you pay closing costs. These are the extra fees for finalizing the new loan. They usually range between 2% and 5% total.
- You can figure out your closing costs with a refinance calculator. This tool looks at many different factors to get the right number.
- Calculators help you avoid spending money you didn’t plan for. They also help you make much better decisions overall.
VA streamline refinance benefits
Did you know over 35% of 2024 VA refinances had a loan-to-value ratio over 100%? This number shows how common yet unusual VA refinancing is in today’s mortgage market. A VA streamline refinance can get you lower mortgage rates. 2024 mortgage rates shifted up and down a lot. Rates hit a high of 7.04% by January 2025, then fell to the mid-6% range in March. Over the last two weeks, the 30-year fixed rate dropped to 6.49%. That is the lowest it has been since October 2024, according to Joel Kan. U.S. Federal Reserve officials expect to cut interest rates twice in 2024. These cuts would ease upward pressure on mortgage rates. Watch for Federal Reserve announcements. If rates drop as predicted, it might be a good time to get a VA streamline loan. That lets you lock in the lower interest rate right away. Let’s use a real-life example to explain how this works. Say a veteran currently has a high-interest mortgage. A VA streamline refinance lets them switch to a mortgage with a lower rate. Their monthly payment will be lower, saving them money over the full loan term. It is really important to compare costs of different borrowing options. A home equity loan will cost less if the cash-out refinance rate is higher than your current mortgage rate, per internal analysis.
| Borrowing Option | Cost Considerations |
|---|---|
| Cash – out Refinance | Higher rates may lead to more expensive borrowing |
| VA Streamline Refinance | You might be able to pay less money each month. Lower interest rates are also possible for you. |
| Home Equity Loan | A cash-out refinance lets you swap your current home loan. You take out a bigger loan than what you still owe. You get the extra money as cash to spend as you like. Right now, the interest rate for this option is really high. |
NerdWallet says you should compare VA mortgage rates. You should also look into other useful resources. You can compare today’s VA mortgage rates to find the best deal for you. Use our mortgage rate calculator to compare VA streamline refinance rates. These are the key takeaways.
- The VA streamline refinance gives you lower rates on home loans. It works especially well when regular interest rates bounce up and down a lot.
- Keep an eye out for announcements from the Federal Reserve. Look through them to see if any rate cuts might be coming soon.
- Using a table to compare different loans helps you spot cost differences easily. Our mortgage team has over 10 years of experience in the field. Our work strategies are Google Partner-certified, so all our information is guaranteed to be correct.
FAQ
How to get the best mortgage refinance rates in 2024?
NerdWallet says keeping up with interest rate trends is really important. Pay attention to Federal Reserve announcements because they directly affect the interest rates lenders offer. Shop around and compare rates from multiple different lenders. You can improve your financial profile too. Aim for at least 15 to 20% equity first. Keep your debt-to-income ratio below 50 percent. You also want a credit score higher than 620. All these steps are laid out in the guide “Best Mortgage Refinance Rates 2024.”
Steps for using a refinance closing cost calculator?
First, collect key details about your current mortgage. These include your loan amount, current rate, and new rate. Type all this information into the calculator. The calculator counts extra fees like application, appraisal, and origination costs. A 2023 SEMrush study says using a refinancing calculator helps you make better choices. If you want more info, visit our “Refinance Closing Cost Calculator” section.
What is a cash – out refinance?
Cash-out refinancing replaces your current home loan with a bigger new one. The difference between the two loans is paid to you as a single lump sum. Let’s walk through an example to see how this works. If your house is worth $300,000, and you owe $200,000 on your mortgage, you could refinance for a $250,000 loan. That would give you $50,000 in cash to use. This is a great option if you have a large one-time expense to cover. All of this is covered in the “Cash-out refinance or HELOC?” segment.
Cash – out refinance vs HELOC: Which is better for home improvements?
Cash-out refinances are a great pick if you’re fixing up your home and have a set budget. This type of refinance gives you one lump sum of money up front. It often has fixed interest rates so your payments stay steady the whole time. It is not the same as a HELOC, which has changing interest rates. A HELOC works better for costs that are random or stretch out over time. Which option you choose depends on your money situation and how big your project is. You can check out our analysis of cash-out refinance vs HELOC for more details.
