What Is a Good Refinance Rate in 2026?

"Is 6.25% a good rate?"

It depends.

Let me show you how to tell if you're getting a good deal.

Current Market Rates (March 2026)

30-year fixed conventional:

• Excellent credit (760+): 6.00-6.25%
• Good credit (720-759): 6.25-6.50%
• Average credit (680-719): 6.50-7.00%
• Below average (620-679): 7.00-8.00%+

15-year fixed conventional:

• Excellent credit: 5.375-5.625%
• Good credit: 5.625-5.875%
• Average credit: 5.875-6.375%

FHA loans: Add 0.125-0.25% to conventional rates

VA loans: Subtract 0.125% from conventional rates

Jumbo loans (above $802,650): Add 0.25-0.75% to conventional rates

Broker's Tip: These are baseline rates for 80% LTV, primary residence, rate-and-term refinance. Your actual rate will vary based on your full profile.

The Real Question: Is It Good FOR YOU?

A "good rate" isn't just about the number. It's about what you're saving compared to what you have now.

Scenario 1: You Have a 7.5% Rate

Your current rate: 7.5% Rate offer: 6.375% Is 6.375% good? Hell yes.

You're dropping 1.125%. On a $400,000 loan, that's $300/month savings ($108,000 over 30 years).

Lock it. Don't overthink it.

Scenario 2: You Have a 5.0% Rate

Your current rate: 5.0% Rate offer: 6.25% Is 6.25% good? No.

You're going UP in rate. Why would you refinance? (The only reason: cash-out refinance where you need the cash and accept the higher rate.)

Scenario 3: You Have a 6.5% Rate

Your current rate: 6.5% Rate offer: 6.25% Is 6.25% good? Maybe.

You're saving 0.25%, which is $60/month on a $400,000 loan.

If closing costs are $4,000, it takes 67 months (5.6 years) to break even.

Are you staying that long? If yes, refinance. If not, skip it.

The Break-Even Test (Most Important)

A good rate is one that recovers your closing costs within 2-3 years.

How to Calculate Break-Even

Step 1: Get your monthly payment savings

• Current payment: $2,500
• New payment: $2,350
• Savings: $150/month

Step 2: Divide closing costs by monthly savings

• Closing costs: $4,500
• Monthly savings: $150
• Break-even: 30 months (2.5 years)

If you're staying 2.5+ years, it's a good rate. If you're selling in 18 months, it's not worth it.

Use our break-even calculator to run your numbers.

Broker's Tip: I tell clients to aim for a 24-month break-even or less. Anything longer is risky (you might move, rates might drop further, life happens).

Historical Context: Where Are Rates Today?

Mortgage rate history:

• 2020-2021: 2.5-3.5% (historic lows, once-in-a-lifetime)
• 2022-2023: 7.0-8.0% (Fed rate hikes crushed affordability)
• 2024-2025: 6.5-7.5% (rates stabilized but still elevated)
• 2026 (now): 6.0-6.5% (Fed cut rates, market cooled)
• 30-year average: 7.7%

Context: Today's rates (6.0-6.5%) are below the long-term average. They're not the rock-bottom 2020 rates, but they're not terrible either.

If you have a rate above 7%, refinancing makes sense.

If you have a rate below 5.5%, you're probably better off keeping it (unless you need cash-out).

Credit Score Benchmarks: What Rate Should You Expect?

Your credit score determines your rate tier.

Is your rate "good"? Compare to these benchmarks:

| Credit Score | Expected 30-Year Fixed Rate (80% LTV) | What's "Good" | |--------------|---------------------------------------|---------------| | 760+ | 6.00-6.25% | Anything under 6.125% | | 740-759 | 6.25-6.50% | Anything under 6.375% | | 720-739 | 6.50-6.75% | Anything under 6.625% | | 700-719 | 6.75-7.00% | Anything under 6.875% | | 680-699 | 7.00-7.25% | Anything under 7.125% | | 660-679 | 7.25-7.625% | Anything under 7.50% | | 640-659 | 7.625-8.00% | Anything under 7.75% |

If you're getting a rate 0.25% BELOW your expected tier, you're doing well.

If you're getting a rate 0.25% ABOVE your tier, shop other lenders. You're being overcharged.

Broker's Tip: Always ask lenders, "What credit score tier am I in?" If they quote you a 6.75% rate and you have a 760 score, something's wrong. Push back.

LTV Matters: How Much Equity Do You Have?

LTV (loan-to-value) = Loan Amount ÷ Home Value

The less you borrow (relative to your home's value), the better your rate.

Rate adjustments by LTV:

| LTV | Rate Adjustment | Example (on 6.25% base rate) | |-----|-----------------|------------------------------| | ≤ 80% | No adjustment | 6.25% | | 80-85% | +0.25-0.50% | 6.50-6.75% | | 85-90% | +0.50-0.75% | 6.75-7.00% | | 90-95% | +0.75-1.25% | 7.00-7.50% | | 95-97% | +1.25-1.75% | 7.50-8.00% |

If you're at 82% LTV and getting quoted 6.75%, that's in line with market pricing.

If you're at 75% LTV and getting quoted 6.75%, you're being overcharged. Shop around.

Loan Type: Are You Comparing Apples to Apples?

Different loan types have different rate ranges.

Don't compare:

• Conventional to FHA
• Fixed to ARM
• 30-year to 15-year

Conventional vs FHA

FHA rates are typically 0.125-0.25% higher than conventional (but FHA allows lower credit scores).

If you have a 680 score:

• Conventional: 6.875%
• FHA: 6.50%

FHA might actually be cheaper for you (even though FHA rates are generally higher, the credit score impact is less).

Fixed vs ARM

ARMs start 0.75-1% lower than 30-year fixed.

March 2026:

• 30-year fixed: 6.25%
• 7/1 ARM: 5.50%
• 5/1 ARM: 5.25%

Is 5.50% on a 7/1 ARM "good"? Compare it to other ARM offers, not fixed rates.

30-Year vs 15-Year

15-year fixed rates are typically 0.5-0.75% lower than 30-year.

March 2026:

• 30-year fixed: 6.25%
• 15-year fixed: 5.625%

Is 5.75% a good rate for a 15-year? That's slightly high (should be closer to 5.625%). Shop around.

When to Lock vs When to Wait

Lock your rate if:

1. It saves you $200+/month compared to your current rate
2. Break-even is under 3 years
3. Rates are rising (don't gamble)
4. You found a rate 0.25% below your expected tier

Wait if:

1. Rates are falling rapidly (you might get 0.25% better next week)
2. You have time (not closing for 60+ days)
3. Economic data suggests a rate drop is coming (Fed meeting, jobs report)

Most of the time, I tell clients: lock within 3 days of applying. Trying to perfectly time the market is a fool's errand.

See our rate lock guide.

Broker's Tip: If you're nervous about locking, ask about a "float down" option. You lock now, but if rates drop 0.25%+ before closing, you get the lower rate. Costs 0.125% extra, but worth it for peace of mind.

Red Flags: When a "Good Rate" Is Actually a Trap

Red Flag #1: Rate Is Great, But Fees Are Outrageous

Lender A: 6.00% rate, $8,000 in fees Lender B: 6.25% rate, $3,000 in fees

Which is better? Run the break-even.

On a $400,000 loan, Lender A saves you $60/month. But you're paying $5,000 more upfront.

Break-even: 83 months (7 years)

Unless you're staying 10+ years, Lender B is the better deal.

Always compare APR (annual percentage rate), which includes fees. A 6.00% rate with 2 points has a higher APR than a 6.125% rate with zero points.

Red Flag #2: Teaser Rate (ARM Bait-and-Switch)

"Get 5.0% today!" (fine print: 5/1 ARM)

ARMs are fine if you understand them. But if you think you're getting a 30-year fixed at 5.0% and you're actually getting an ARM that adjusts after 5 years, you're in for a rude awakening.

Always ask: Is this fixed or adjustable?

Red Flag #3: "No-Cost Refinance" With a Sky-High Rate

Lender: "Zero closing costs!" Rate: 7.25% (when market rate for your profile is 6.375%)

You're paying for those closing costs through a rate that's 0.875% higher. That costs you $210/month on a $400,000 loan.

No-cost refi makes sense IF the rate is reasonable. See our no-cost refinance guide.

Frequently Asked Questions

Q: Should I refinance if I'm only saving 0.375%?

On a $400,000 loan, 0.375% saves you $90/month. If closing costs are $4,500, break-even is 50 months (4.2 years). If you're staying that long, yes.

Q: Is it worth refinancing if I'm selling in 2 years?

Probably not. Unless your monthly savings are massive (enough to recover closing costs in 24 months), skip it.

Q: Can I get a better rate if I wait 6 months?

Maybe. But rates could also go UP. If you're saving $200+/month today, refinance today. Don't gamble on future rate drops.

Q: What if I refinanced last year and rates dropped again?

You can refinance as many times as you want. If the math works (break-even under 3 years), do it again.

Q: Are online lenders cheaper than traditional banks?

Sometimes. Online lenders (Rocket, Better.com) have lower overhead, so they can offer better rates. But shop around — sometimes local brokers beat them.

Next Steps

Want to know if you're getting a good rate? Get personalized quotes and I'll tell you:

Compare your refinance options →

I'm a California licensed mortgage broker with 15+ years experience (DRE #01212512). I'll show you what rate you SHOULD be getting and where to find it.

Related guides:

• How Refinance Rates Are Determined
• How to Get the Best Refinance Rate
• Break-Even Calculator Guide
• Current Refinance Rates
• Refinance Calculator