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Refinancing your mortgage is one of the most lucrative moves a homeowner can make. When you refinance, you take out a new loan on your home to replace your current mortgage. The primary goal is to secure a lower interest rate, which can net you a lower monthly mortgage payment, a shorter-term loan or free up money for a home renovation or other big-ticket item.

Here’s what you need to know about a 30-year fixed-rate refinance mortgage -- the most popular type of refinance home loan -- and how to find the best lenders and rates available to you.

Average 30-year聽refinance rates聽are near a 20-year high at 6.94%, as of April 13, 2023. Mortgage rates tend to rise or fall depending on what’s happening with the economy, and are also affected by the federal funds rates set by the Federal Reserve. To mitigate聽skyrocketing inflation, the Fed raised interest rates seven times in 2022, and hiked rates twice so far in 2023. However, it’s likely that mortgage rates will remain flat as long as the Fed continues to act in line with market expectations.

A 30-year fixed-rate refinance could save you tens of thousands in interest if you’re able to secure a lower rate. Here are the pros and cons to consider when deciding if a 30-year fixed refinance is right for you.

Lower monthly payments:聽One of the biggest benefits of refinancing is reducing your monthly payment with a lower interest rate. For example, a 15-year mortgage at 6% has a monthly payment of $1,266; a 30-year mortgage at 7% has a monthly payment of $998. The 30-year loan will cost you more in interest over the life of the mortgage but cost $268 less per month.

Eliminate private mortgage insurance:聽If you made聽less than a 20% down payment聽and have聽private mortgage insurance, a refi may allow you to get rid of聽PMI. (Note that you may also be able to discontinue paying for PMI if you have at least 20% equity in your home.)

Paying more interest over the life of the loan:聽Although a 30-year refinance will lessen your monthly payments, you will end up paying thousands of dollars more in interest over the course of the loan, since you’ll be paying interest for a longer period of time.

It requires upfront costs:聽You will have to pay聽closing costs聽and additional lender fees in order to complete your refinance transaction, which could cost thousands of dollars upfront. In 2021, average refinance closing costs were聽almost $2,500聽for a single-family home in the US.

Longer loan term:聽If you refinance into a new 30-year mortgage, it will take you longer to pay off, giving you less financial flexibility in the future.

It will take longer to build equity in your home:聽Since you’re extending your loan terms, it can take you more time to build up equity, which means you may not be able to take advantage of a聽cash-out refinance. You typically need 20% equity in your home to qualify for a cash-out refinance or get rid of PMI.

If you’re thinking about refinancing your home loan, it’s important to compare many different lenders and options. If you apply for the first loan you find, you risk paying more in interest and fees. When comparing refinance rates, make sure you’re comparing apples to apples: Some lenders will quote you an interest rate, others may show you the APR. (Here’s an explanation of how they differ). 

Also, make sure you’re comparing the same repayment term. A longer-term loan will have a lower APR, given that fees are amortized over a longer period. This can give you a misleading impression of which loan is less expensive, even though you will pay more total interest over the life of a longer-term loan.

Along with interest rates, it’s important to compare the overall cost of a mortgage including closing costs, lender fees and any other charges that come with refinancing. There’s no set standard, so lenders can charge a variety of fees during the process.

You might qualify for a mortgage refinancing if:

Refinancing isn’t always the right move. When interest rates are on the rise, it may not be the right time to refinance. But if you can substantially reduce your interest rate, monthly payment -- or both -- it might make sense. Some homeowners refinance in order to pay off a home loan sooner, opting for a shorter 15- or 20-year term. Those tend to come with lower interest rates than a 30-year loan. Still, that may not make sense for everyone, because the monthly payment may be higher even with a lower interest rate.

The best refinancing rates are usually reserved for applicants who meet the following eligibility requirements:

We use information collected by Bankrate (which is owned by the same parent company as CNET) to track daily mortgage rate trends. The above table summarizes the average rates offered by lenders across the country. 

Many factors influence refinancing rates. While the broader economy plays a key role in mortgage rates, there are a handful of things specific to you that determine your rate. They include your credit score, your down payment and the loan term and type.

A 30-year fixed-rate refinance is a loan you take out to pay off your current mortgage, and it becomes the new mortgage you are paying off every month. The interest rate is fixed and you must pay off the loan in 30 years. The most common reasons to refinance with a 30-year fixed-rate loan are to lower your monthly payments and/or your interest rate. A 30-year fixed-rate loan is the most popular type of home loan.

Whether or not you qualify for a 30-year fixed-rate refinance is determined by lenders, who use a number of factors to decide your eligibility. Your income, your credit score, how much debt you’re carrying, and your聽loan-to-value ratio聽all affect the rate a lender will offer you.

The decision to refinance is different for everyone and depends on a few key variables: The interest rate of your current mortgage, whether you need access to a larger monthly cash flow, and how much of your mortgage you’ve already paid off.聽 If you plan to move in a few years, it may not be worth it to refinance because you won’t have the new loan long enough to recoup the costs of your refi in lower payments.

It’s important to shop around with different lenders to find the right refinance loan for you.

Refinancing can be a valuable tool for stretching your monthly budget over the length of your mortgage. Even though refinance rates are rising, they are still historically low, offering millions of homeowners the chance to save money every month. By taking into account the factors that make up your personal financial situation and comparing multiple lenders, you can find the best possible 30-year fixed refinance rate available to you and start saving on your monthly mortgage payments.