If you’ve been waiting for rates to drop to refinance a 8% mortgage, your time has come. Rates are now the lowest they’ve been since early 2023.
The 30-year fixed-rate hit 6.06% on average during the week ending Jan. 15, according to Freddie Mac’s Primary Mortgage Market Survey.
That’s nearly a point lower than they were this time last year, when they hovered above 7%, and nearly 2 points lower than when rates peaked at 7.79% in October 2023, according to Freddie Mac’s historical data.
The weekly average dip was driven by a significant drop in rates late last week, Freddie Mac Chief Economist Sam Khater said in a press release. This came after President Donald Trump ordered Fannie Mae and Freddie Mac to buy $200 billion in mortgage bonds on Jan. 8 in an effort to lower mortgage rates that have remained stubbornly high even after three Federal Reserve interest cuts in 2025, CNBC reported earlier this week.
And borrowers have already taken note.
“The impacts are noticeable, as weekly purchase applications and refinance activity have jumped, underscoring the benefits for both buyers and current owners,” Khater said. “It’s clear that housing activity is improving and poised for a solid spring sales season.”
Who should I refinance with?
If you’re looking to refinance your mortgage, here are three lenders that are known for their customer service records, availability and diverse offerings.
Best for speedy closing: Rocket Mortgage
If you want that lower rate as soon as possible, consider Rocket Mortgage.
Its average closing time for refinancing is 21 days — half the national average. Additionally, Rocket is known for its customer satisfaction, garnering top ratings from J.D. Power and the Better Business Bureau.
Rocket Mortgage Refinance
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Annual Percentage Rate (APR)
Apply online for personalized rates
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Types of loans
Conventional loans, FHA loans, VA Interest Rate Reduction Refinance Loan (IRRRL) and jumbo loans
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Fixed-rate Terms
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Adjustable-rate Terms
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Credit needed
580 if opting for FHA loan refinance or VA IRRRL; 620 for a conventional loan refinance
But Rocket has higher origination fees than other lenders and it is completely online, so it does not have physical locations.
Best for lowest rates: Better
Better is known for its comparatively lower rates.
It also lets you roll your lenders’ fees into your loan, so you don’t have to pay them upfront (make sure your lower rate is worth adding the lender fees to your loan). This could help you lower your rate even if you may not have the cash available to cover those fees.
Better Mortgage
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Annual Percentage Rate (APR)
Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included
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Types of loans
Conventional loan, FHA loan, Jumbo loan and adjustable-rate mortgage (ARM)
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Terms
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Credit needed
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Minimum down payment
3.5% if moving forward with an FHA loan
But, like Rocket, it doesn’t have physical locations, so you should use another lender if you’re looking for an in-person experience.
Best for credit union: PenFed Credit Union
Credit Unions are member-owned and run, meaning any money the credit union makes is put back into products for its members.
That means tend to have better rates compared to traditional lenders, and more flexible terms. PenFed Credit Union made our best refinance lenders list as the best credit union option.
Unlike many credit unions with strict membership requirements, anyone can join with a $5 deposit into a PenFed savings account. PenFed offers borrowers refinancing a closing credit of up to $1,500.
PenFed Credit Union Mortgage
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Annual Percentage Rate (APR)
Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included
-
Types of loans
Conventional loan, VA loan, FHA loan, Jumbo loan and adjustable-rate mortgage (ARM)
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Terms
-
Credit needed
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Minimum down payment
3.5% if moving forward with an FHA loan
What are the refinancing requirements?
To get the best rate possible, you’ll want a strong credit score and low debt-to-income ratio. While requirements vary across lenders, here are some of the general guidelines for the minimum qualifications a borrower must meet to refinance.
| Type of mortgage | Minimum credit score | Maximum DTI ratio |
|---|---|---|
| Conventional (rate-and-term or cash-out) | 620 | 50% |
| FHA loan | 580 | 45% |
| VA loan | 620 | 41-50% |
| USDA loan | 640 | 41-46% |
| Jumbo loan | 700 | 45% |
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Why trust CNBC Select?
At CNBC Select, our mission is to deliver high-quality service journalism and comprehensive consumer advice to our readers, enabling them to make informed financial decisions. Every mortgage review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of financial products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties and we pride ourselves on our journalistic standards and ethics.
Our methodology
Additionally, we incorporate findings from independent sources, including lender scores from the J.D. Power mortgage origination and servicing surveys and ratings from the Better Business Bureau.
For home equity loans, we review rates, repayment terms, the amount of equity required and the minimum and maximum loan amounts available.
We also consider requirements for credit scores, debt-to-income ratios and combined loan-to-value ratios.
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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
