How Refinance Rates Are Set
How Refinance Rates Are Set: what to know and how to act in 2026.
What to know
Your refinance rate reflects the broader bond market (especially the 10-year Treasury and mortgage-backed securities), then is adjusted for your credit score, loan-to-value, loan type, term, occupancy, and whether you buy points - plus each lender's profit margin. Because that margin varies, comparing two or three lenders directly affects the rate you're offered.
What affects your refinance rate
- Your credit score and loan-to-value
- Loan term (15-year prices below 30-year)
- Rate-and-term vs cash-out (cash-out prices higher)
- Discount points you choose to buy
- The bond market and Fed policy — and lender margins, so compare quotes
Example payment by rate
| Rate | P&I on a $300,000 loan (30-yr) |
|---|---|
| 5.25% | $1,657 |
| 5.50% | $1,703 |
| 5.75% | $1,751 |
| 6.00% | $1,799 |
| 6.25% | $1,847 |
| 6.50% | $1,896 |
| 6.75% | $1,946 |
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Frequently Asked Questions
- How Refinance Rates Are Set — the quick answer?
- Your refinance rate reflects the broader bond market (especially the 10-year Treasury and mortgage-backed securities), then is adjusted for your credit score, loan-to-value, loan type, term, occupancy, and whether you buy points - plus each lender's profit margin. Because that margin varies, comparing two or three lenders directly affects the rate you're offered.
- Are refinance rates higher than purchase rates?
- Rate-and-term refinance rates are usually similar to purchase rates; cash-out refinances price a bit higher because they are riskier for the lender.