- 2025-11-29 19:44:52
Borrowing money via a personal loan can be a strategic way to hit certain financial goals, such as consolidating high-interest debt from other accounts or paying off emergency car repairs, medical expenses, or vet bills. Plus, responsibly managing installment credit like a personal loan, auto loan or mortgage can help bolster your credit score.However, borrowing money isn’t free. And depending on the lender you choose, it can feel downright exorbitant. Read on and we’ll share five personal loan costs to watch out for. We’ll also examine how to potentially reduce the amount you pay for a personal loan.Unavoidable personal loan costs There is really one main inescapable cost associated with a personal loan—the interest charges.Interest When you’re approved for a loan, the bank will assign you an interest rate largely based on your creditworthiness. Your interest rate will be translated into an annual percentage rate, or APR, which factors in your interest rate plus any applicable fees.You’ll then be set up on an installment plan where you’ll make equal monthly payments until your loan is paid off. The loan’s APR is baked into your monthly payments, meaning that a portion of every installment will go toward interest and a portion toward the principal of the debt.Although interest is unavoidable when taking out a personal loan, there are ways to minimize your out-of-pocket (we’ll cover some strategies in a minute).Avoidable personal loan costsSome ancillary costs are a result of how you manage your personal loan.Late feesTo say nothing of the devastating effects to your credit score, a late payment on your personal loan can result in fees. The exact penalty varies by lender, but you can expect to pay either a percentage of your amount owed or a flat dollar amount. To avoid late fees, it’s wise to put your account on autopay—just in case. This will act as a failsafe in case you forget to make your payment.Early payoff penaltiesSome lenders charge penalties if you pay off your loan before the end of the term. We think this is a borderline predatory fee that penalizes you for trying to get out of debt as quickly as possible. It ensures the financial institution will be compensated if it doesn’t receive every penny of interest you would have paid if you’d simply made the minimum payment each month.If you can help it, stay away from lenders who charge these fees.Lender-specific personal loan costs Similar to early prepayment fees, there are a couple other costs that may be assessed depending on lender. In other words, these are not universally tacked on by all banks. Try to do business with those that don’t charge these fees.Application/administrative feeApplication fees aren’t standard practice among lenders, but they’re still something to watch for. These fees are supposedly to cover the costs associated with processing your loan application. In general, application fees can reach $50; the exact fee will vary by lender.Even more frustrating is the fact that you may have to pay this fee even if your application isn’t approved.Origination feeAnother seemingly arbitrary cost is a loan origination fee. Again, this is not charged by every lender, so do your best to work with one that doesn’t ding you with it.Origination fees are typically between 1% and 10% of your loan amount. Oftentimes, the bank will subtract this fee from the loan amount when depositing funds into your bank, and you’ll pay the full loan amount as agreed upon. If a lender that does assess an origination fee turns out to be your best option, at least try to find one with a fee at the lower end of that range.For example, if you opened a $50,000 loan with an origination fee of 2%, you’d pay a $1,000 origination fee. That means the bank would deposit $49,000 into your bank account—and your outstanding loan balance would be $50,000.Keep the origination fee in mind when calculating the amount of money you want. The origination fee could result in receiving less than you need.How to lower your personal loan costsBeyond steering clear of lenders that levy avoidable charges like origination and application fees, there are steps you can take to lower the price of borrowing money with a personal loan. That’s particularly true if you have a bit of lead time before you need the funds.Work on improving your credit scoreCredit bureaus take factors of your credit usage—payment history, average length of account age, credit utilization, etc.—and from these elements generate a number that indicates how responsible you are with borrowing money. In general, the higher your credit score, the more favorable your loan terms should be. For example, your credit score helps to determine your loan’s interest rate and origination fee (if one applies). Improving your credit score might potentially save you thousands of dollars over the lifetime of your loan.Adjust your term lengthYour loan term is the length of time you’ve got to pay back the money you owe. With a bit of strategy, your term might help you pay off your loan considerably faster.For example, some lenders will charge you a lower interest rate if your repayment term is shorter. Alternatively, you could choose the loan with the longest term to lower your monthly installment amount and then decide to pay extra on the principal each month. The sooner you pay off your loan in full, the less interest you’ll end up paying over the life of the loan.Rate shopDon’t necessarily accept the first loan offer you see. It’s important to compare lenders to find the most favorable loan for your situation. Many lenders will give you the opportunity to be preapproved for a loan. This should reveal your proposed loan terms, such as repayment schedule, APR, and borrowing amount.Put your loan on autopayUsing autopay with your loan will save you from paying late fees—and it can also lower your interest rate with some lenders. For example, LightStream offers a 0.50%-point discount for those with autopay as of this writing.Only take out what you needYou may think there’s no harm in taking out a loan larger than what you need. In truth, there can occasionally be some benefit to that; if you’re low on savings, requesting a larger loan can give you the funds you need to stay current on your bills in the event that you go through a financial hardship. But, understand that this strategy will result in paying more interest in the long run.Best personal loans for low fees Best forInstitutionLoan amountMax loan termAPR (with eligible discounts)Learn moreLonger repayment termsLightStream$5,000-$100,000240 months6.24%–24.89%View offerat BankrateFee-sensitive borrowersWells Fargo$3,000-$100,00084 months6.74%-26.49%View offerat BankrateLow maximum APRPenFed Credit Union$600-$50,00060 months6.99%-17.99%View offerat BankratePreapprovalAmerican Express$3,500-$50,00060 months6.99%-19.99%View offerat American ExpressSmall loan amountTD Bank$2,000-$50,00060 months7.99%-23.99%View offerat TD BankLonger repayment termsView offerat BankrateInstitutionLightStreamLoan amount$5,000-$100,000Max loan term240 monthsAPR (with eligible discounts)6.24%–24.89%Fee-sensitive borrowersView offerat BankrateInstitutionWells FargoLoan amount$3,000-$100,000Max loan term84 monthsAPR (with eligible discounts)6.74%-26.49%Low maximum APRView offerat BankrateInstitutionPenFed Credit UnionLoan amount$600-$50,000Max loan term60 monthsAPR (with eligible discounts)6.99%-17.99%PreapprovalView offerat American ExpressInstitutionAmerican ExpressLoan amount$3,500-$50,000Max loan term60 monthsAPR (with eligible discounts)6.99%-19.99%Small loan amountView offerat TD BankInstitutionTD BankLoan amount$2,000-$50,000Max loan term60 monthsAPR (with eligible discounts)7.99%-23.99%Loan details checked Nov. 12, 2025The takeaway Personal loans aren’t free. You’re guaranteed to have to pay interest charges each month (a component of your monthly payment along with a portion that goes to the debt’s principal) until you’ve fully repaid your lender. And depending on the bank you choose and the way you manage your loan, you could also pay origination fees, late fees, and more.Choose a lender that is light on fees and provides reasonable APR and repayment terms. And pay off your loan as quickly as you can to minimize the interest you incur.Learn moreRead our breakdown of the pros and cons of personal loans.Frequently asked questionsWhat’s the difference between APR and interest rate?A personal loan’s interest rate indicates the amount of interest you’ll pay for borrowing money. Its annual percentage rate (APR) indicates the interest rate plus any other costs, such as fees.Is it worth paying off my personal loan early if there’s a prepayment penalty?The answer as to whether it’s worth eating a prepayment fee to save on interest depends entirely on which will save you more money. If a prepayment fee is more than the interest you’d shell out for making monthly minimum payments on your loan, then it’s not worth paying off your loan early.When is a payment considered late on a personal loan?Your payment is late if it’s not paid by the due date. There may be a grace period of up to 30 days before the lender reports you as late to the credit bureaus—but you could be assessed a late fee almost immediately.What costs should I watch for when getting a personal loan?You should consider all costs associated with a personal loan, including interest and late fees. And you should be particularly wary of lenders that charge additional penalties, such as early payoff fees, application fees, and origination fees.Do all personal loan lenders charge origination fees?No, not all personal loan lenders charge origination fees. For this reason, consumers will oftentimes do well to shop around and select a lender that doesn’t charge this fee.Join us at the Fortune Workplace Innovation SummitMay 19–20, 2026, in Atlanta. The next era of workplace innovation is here—and the old playbook is being rewritten. At this exclusive, high-energy event, the world’s most innovative leaders will convene to explore how AI, humanity, and strategy converge to redefine, again, the future of work. Register now.
Continue Reading
- 2025-12-02 23:16:21
The price of gold was trading at $4,249 per ounce as of 9 a.m. Eastern Time on December 1, 2025. That’s a $5 increase from the same time yesterday and a $1,610 increase from a year ago. Gold price per ounce% ChangePrice of gold yesterday$4,245-0.09%Price of gold 1 month ago$3,864-9.06%Price of gold 1 year ago$2,639-37.89%Price of gold yesterdayGold price per ounce$4,245% Change-0.09%Price of gold 1 month agoGold price per ounce$3,864% Change-9.06%Price of gold 1 year agoGold price per ounce$2,639% Change-37.89%If you’re looking for an investment that is not tied directly to the variance of inflation, gold may be the right choice. In general, gold as an asset is typically expected to increase in value over time. One of the most common ways to purchase and manage gold is through a gold IRA, which can serve as a steadying force in a portfolio amid volatile markets. This may also be a good choice for those who want to invest in gold without the challenge of having to make storage arrangements for physical gold bullion.Check Out Our Daily Rates ReportsDiscover the highest high-yield savings rates, up to 5% for December 8, 2025.Discover the highest CD rates, up to 4.18% for December 8, 2025.Discover the current mortgage rates for December 8, 2025.Discover current refi mortgage rates report for December 8, 2025.Discover current ARM mortgage rates report for December 8, 2025.Discover the current price of gold for December 8, 2025.Discover the current price of silver for December 8, 2025.Historical gold price chartGold is not always a home run investment. In a strong economy, stocks can perform better in the short and long term. From 1971 to 2024, the stock market delivered average annual returns of 10.7%. Gold delivered an average annual return of 7.9% over the same period.However, during times of economic uncertainty, gold is a solid option as a risk-averse investment. For this reason, some may prefer to think of it as a store of value as opposed to an investment in the way that stocks and bonds are.What does “spot gold” mean?The spot gold price is the price to buy or sell gold immediately in an over-the-counter trade. This is an effective way for investors to monitor the demands and trends of gold investment at that time. Simply stated, a higher spot gold price means there is higher demand for gold in the marketplace. Notably, unlike futures contracts, the spot price is for an immediate sale. When the future price is higher than the spot price, it is called contango. This is common when investing in commodities that have a high storage cost. When the futures price is lower than the spot price, it is called backwardation.There are plenty of different factors that can impact the spot price, which is why that figure is constantly shifting up and down. Those looking to invest in gold need to be able to deal with this level of price fluctuation.What is price spread in gold trading?A price spread is the difference between an asset’s offered purchase price vs. the price offered to sell it. Similarly, in gold investing, the two key terms are ask price and bid price. The ask price is how much it costs to buy the gold, while the bid price is how much it can be sold for. Bid prices are always lower than ask prices.The lower the spread between these two prices, the more liquid the market is. If there is a relatively small spread, that means the demand for gold is on the rise.How to invest in goldIf investing in gold immediately leads to an image of Scrooge McDuck olympic diving into a pile of coins, that’s only half right. While there are opportunities to buy physical gold bars, coins or jewelry, gold is often traded as exchange-traded funds (ETF).James Taska, a fee-based financial advisor, said, “There is a great debate as to whether paper gold is as useful as the physical. From a financial advisor’s viewpoint, it is much easier to rebalance a client’s allocation of gold if it is owned as an exchange-traded fund (ETF), and the spread when attempting to buy/sell gold can be quite variable and wide.” Some of the most common ways to invest in gold include:Gold bars:Often referred to as bullion, this is a popular gold investing method. Offered on a per gram or ounce basis, other qualities including purity, weight, and manufacturer are typically stamped on the face of the bar. Similarly, you may encounter gold rounds.Gold coins:These are collectible coins, such as the American Gold Eagle coin. These often are sold at a higher price than bars of the same weight because they are viewed as collectibles with limited availability in the marketplace.Gold jewelry:Jewelry typically comes with aesthetic, external and subjective value, so the price may be significantly higher than the standard weight value. Gold futures contracts:A futures contract states that the investor will buy a specified amount of gold for a defined price at a future date. Futures allow investors to speculate on the price of gold in the future without needing to handle the actual physical product. Gold funds:These are mutual funds or ETFs that own gold assets. Like other ETFs in a stock portfolio, you can purchase shares in gold funds or any other mutual fund investment, and their value fluctuates based on the changes in the underlying portfolio of assets.Is it a good time to invest in gold?Ultimately, there is a relative subjectivity in determining if now is a better time to invest in gold compared to other periods. However, using gold as a way to diversify your existing portfolio can mitigate the impact of market volatility.In the current economy, gold continues to offer stability in a highly volatile period for the stock market. Prices have risen to all-time highs, with the price rising over 25% since the start of 2025, fueled by ongoing inflation and economic uncertainty. Many experts agree this is a good time to diversify your portfolio with gold.Current precious metals pricesas of 9 a.m. ET on December 1, 2025Precious MetalPrice per ounceGold$4,249Silver$58Platinum$1,681Palladium$1,450GoldPrice per ounce$4,249SilverPrice per ounce$58PlatinumPrice per ounce$1,681PalladiumPrice per ounce$1,450Silver, platinum, and palladium are popular precious metals that investors can hold in portfolios in addition to gold. Gold is typically less volatile than silver, which can have a large price range even within a 24-hour period. Additionally, because silver is a more common resource used across different industries, it is more sensitive to external economic changes.Platinum and palladium are in the same boat as silver. Investors can use these rare metals as a way to diversify a portfolio, but be wary that there is typically much more fluctuation than with gold.#qsWidgetContainer179, #qsWidgetContainer179 [data-widget-id] { background-color: transparent; font-family: var(--graphik-cond),Graphik Cond,Arial Narrow,Helvetica neue Condensed,sans-serif; letter-spacing: .5px; padding: 0; } #qsWidgetContainer179 .sizeone .header-section { border-bottom: 0 none; color: #666; font-weight: 600 !important; padding: 6px 0; } #qsWidgetContainer179 .sponsored { font-family: inherit; letter-spacing: .5px; } #qsWidgetContainer179 .sponsored .add-text { color: inherit !important; } #qsWidgetContainer179 .sponsored:not(.sponsored + .sponsored) { color: inherit; font-weight: 600; text-transform: uppercase; } #qsWidgetContainer179 .non_featured_list { background-color: transparent; border-top: 0 none; } #qsWidgetContainer179 .cdBankingDesignChanges .sh-listing { border: 1px solid #F2F2F2 !important; box-shadow: 4px 4px 20px 0 #1111110D; margin-bottom: 40px; } #qsWidgetContainer179 .listing { background-color: #fff; border: 1px solid #F2F2F2 !important; box-shadow: 4px 4px 20px 0 #1111110D; margin-top: 40px; } #qsWidgetContainer179 .listing:first-child { margin-top: 0; } #qsWidgetContainer179 .ad-copy-bottom-section { background-color: #F9F9F9; } #qsWidgetContainer179 .listing .listing-content-wrapper .sh-promo-ribbon { align-items: center; background: #007B9D !important; display: flex; font-family: inherit; font-weight: 600; height: auto; justify-content: center; margin: 0; padding: 4px 16px; } #qsWidgetContainer179 .listing .listing-content-wrapper .sh-promo-ribbon span.sh-promo-text::before { display: none; } #qsWidgetContainer179 .listing .listing-content-wrapper .sh-promo-ribbon span.sh-promo-text::after { display: none; } #qsWidgetContainer179 .logo-column.flex-container, #qsWidgetContainer179 .ad-copy-column.flex-container { flex-grow: 1; flex-shrink: 1; } #qsWidgetContainer179 .disclosure-contnr .text { color: #666 !important; } #qsWidgetContainer179 .prop-name { font-family: var(--graphik-cond),Graphik Cond,Arial Narrow,Helvetica neue Condensed,sans-serif; font-size: 12px; font-weight: 500; letter-spacing: .5px; line-height: 150%; margin-bottom: 8px; } #qsWidgetContainer179 .apy-label, #qsWidgetContainer179 .curDate, #qsWidgetContainer179 .prop-value { font-family: var(--graphik-compact), Graphik Compact, Arial Narrow, Helvetica neue Condensed, sans-serif !important; font-size: 16px !important; font-weight: 600 !important; line-height: 150%; } #qsWidgetContainer179 .curDate { font-size: 12px !important; font-weight: 500 !important; margin-top: 4px; } #qsWidgetContainer179 .listing-title .prod-name:hover { color: #111; } #qsWidgetContainer179 .shmktpl-button { border-radius: 0; font-family: var(--graphik-cond),Graphik Cond,Arial Narrow,Helvetica neue Condensed,sans-serif; font-size: 16px; font-weight: 600; height: auto; letter-spacing: .5px; line-height: 150%; padding: 12px 16px; } #qsWidgetContainer179 .ad-copy-bottom-section { padding: 0; } #qsWidgetContainer179 .prop-value-container { align-items: stretch; } #qsWidgetContainer179 .prop-conatiner { padding: 12px; position: relative; } #qsWidgetContainer179 .prop-conatiner:not(:first-child):before { background-color: #fff; content: ' '; height: calc(100% + 24px); position: absolute; left: -12px; top: -12px; width: 2px; } #qsWidgetContainer179 .sh-row-product-title { color: #666; font-family: var(--graphik-cond),Graphik Cond,Arial Narrow,Helvetica neue Condensed,sans-serif; font-size: 12px; font-style: normal; letter-spacing: .5px; } #qsWidgetContainer179 .see-more-text { background-color: #F2F2F2; } #qsWidgetContainer179 .see-more-text + .row-2 { background-color: #F9F9F9 !important; } #qsWidgetContainer179 .description-title { font-family: var(--graphik-cond),Graphik Cond,Arial Narrow,Helvetica neue Condensed,sans-serif; font-size: 16px; font-weight: 600; line-height: 120%; text-transform: none; } #qsWidgetContainer179 svg.shArrow path { fill: #111 !important; } #qsWidgetContainer179 #sh-star-icon { top: -2px; } #qsWidgetContainer179 #sh-star-icon svg path:first-child { fill: #007B9D !important; } #qsWidgetContainer179 #see_more_carrier, #qsWidgetContainer179 .see_less_carrier { background-color: #F2F2F2; color: #111; } /** CD Styles */ #qsWidgetContainer179 .cdBankingDesignChanges .sh-listing-container { padding: 0; } #qsWidgetContainer179 .cdBankingDesignChanges #sh-header-container { border-bottom: 1px solid #F2F2F2; margin-bottom: 0; padding: 6px 0; } #qsWidgetContainer179 #sh-star-icon:before { background-color: #007B9D; content: ' '; display: block; height: 10px; left: 0; position: absolute; top: 1.5px; width: 10px; } #qsWidgetContainer179 .listing-title { font-family: var(--graphik-cond),Graphik Cond,Arial Narrow,Helvetica neue Condensed,sans-serif !important; } #qsWidgetContainer179 .shmktpl-sponsored, #qsWidgetContainer179 .cdBankingDesignChanges .shmktpl-disclosure-button { color: #666 !important; font-family: var(--graphik-cond),Graphik Cond,Arial Narrow,Helvetica neue Condensed,sans-serif; font-weight: 600; line-height: 150%; } #qsWidgetContainer179 .sh-logo { flex-shrink: 1; } #qsWidgetContainer179 .shmktpl-sponsored { text-transform: uppercase; } #qsWidgetContainer179 .cdBankingDesignChanges .sh-listing-content-wrapper { box-shadow: none; gap: 24px; margin-bottom: 0; padding: 24px; } #qsWidgetContainer179 .disclosure-content ul li { font-family: var(--graphik-cond),Graphik Cond,Arial Narrow,Helvetica neue Condensed,sans-serif; font-size: 16px; font-weight: 500; letter-spacing: .5px; line-height: 150%; } #qsWidgetContainer179 .sh-fdic-insured .sh-icon svg path { fill: #666 !important; } #qsWidgetContainer179 .cdBankingDesignChanges .sh-row-product-title.sh-date { margin-right: 0; padding-top: 0; } #qsWidgetContainer179 .cdBankingDesignChanges .sh-row-product-title.sh-bank-name { font-style: normal; font-weight: 400; margin-right: 0; margin-top: 4px; } #qsWidgetContainer179 .cdBankingDesignChanges .sh-row-container { align-items: flex-start; } #qsWidgetContainer179 .cdBankingDesignChanges .product-details-container > .sh-row-container { align-items: center !important; } #qsWidgetContainer179 .cdBankingDesignChanges .sh-first-product .sh-title-container { height: auto; min-height: 0; padding: 12px; } #qsWidgetContainer179 .sh-title { font-family: var(--graphik-cond),Graphik Cond,Arial Narrow,Helvetica neue Condensed,sans-serif; font-size: 20px; font-weight: 600; text-align: left; } #qsWidgetContainer179 .sh-fdic-insured .sh-text { color: #666 !important; } #qsWidgetContainer179 .sh-first-product .sh-btn__text, #qsWidgetContainer179 .sh-btn__text { border-radius: 0; border-color: #111; color: #111; font-family: var(--graphik-cond),Graphik Cond,Arial Narrow,Helvetica neue Condensed,sans-serif; font-weight: 600; line-height: 150%; height: auto; letter-spacing: .5px; padding: 12px 16px; } #qsWidgetContainer179 .sh-btn__text:hover { border-color: #666; color: #666; } #qsWidgetContainer179 .sh-row-sub-container span.sh-row-value { font-family: var(--graphik-compact), Graphik Compact, Arial Narrow, Helvetica neue Condensed, sans-serif !important; font-size: 16px !important; font-weight: 600 !important; letter-spacing: .5px !important; } @media only screen and (width: 768px) { #qsWidgetContainer179 .cdBankingDesignChanges .sh-row-product-title.sh-bank-name { position: relative; top: initial; } } @media only screen and (max-width: 767px) { #qsWidgetContainer179 .cdBankingDesignChanges .sh-first-product .sh-title-container { padding: 0; } #qsWidgetContainer179 .prop-conatiner:not(:first-child):before { height: 2px; left: 0; top: -12px; width: 100%; } #qsWidgetContainer179 .sh-row2-container { flex-basis: 100% !important; padding-bottom: 8px !important; } #qsWidgetContainer179 .sh-first-product .sh-title-container .sh-row-container { height: auto; padding: 8px; } #qsWidgetContainer179 .cdBankingDesignChanges .sh-row-product-title.sh-bank-name { font-size: 14px; font-weight: 400; margin-top: 8px; top: 182px; } #qsWidgetContainer179 img.logo-image { margin-left: auto; margin-right: auto; max-width: 200px; } #qsWidgetContainer179 .listing-title { font-size: 20px; font-weight: 600; } }The takeawayThe U.S. economy has been in flux for several years now, and the current period of extended inflation has had a major impact. Gold can serve as an inflationary hedge in an investor’s portfolio. Additionally, because of the variance of acquisition methods, gold can be a relatively easy asset to accumulate based on an investor’s comfort level and interest. Whether you purchase gold as an IRA or as a more active investment account, investing in gold may help achieve both short- and long-term investment objectives.Frequently asked questionsWhat is the best way to own gold?Many investors are buying gold via ETFs, which allows for a managed portfolio of easily traded assets.Is gold a good investment?Gold is often a good investment for investors looking to diversify their portfolio and get a hedge against inflation. There are many ways to buy gold, making it easy to access the investment.Should I buy gold coins or gold bars?Gold coins are considered collectibles and may have a higher value for the weight of gold compared to a bar. Collectible and historical significance can make coins a more attractive asset to some investors. Additionally, U.S. minted coins might help protect investors from the risk of getting fake bars.Fortune Brainstorm AIreturns to San Francisco Dec. 8–9 to convene the smartest people we know—technologists, entrepreneurs, Fortune Global 500 executives, investors, policymakers, and the brilliant minds in between—to explore and interrogate the most pressing questions about AI at another pivotal moment. Register here.
Continue Reading
- 2025-12-21 04:35:16
The current average refinance rate on a 30-year, fixed-rate home loan is 6.33%, according to data from the popular real estate marketplace Zillow. If you’re a homeowner hoping to refinance your mortgage for a lower rate or perhaps to tap home equity, read on to see average refi interest rates for a variety of loan types and terms. You can also see the prior day’s report here.Check Out Our Daily Rates ReportsDiscover the highest high-yield savings rates, up to 5% for December 8, 2025.Discover the highest CD rates, up to 4.18% for December 8, 2025.Discover the current mortgage rates for December 8, 2025.Discover current refi mortgage rates report for December 8, 2025.Discover current ARM mortgage rates report for December 8, 2025.Discover the current price of gold for December 8, 2025.Discover the current price of silver for December 8, 2025.Current refi rates dataConventional mortgages30-year6.33%20-year6.20%15-year5.56%10-year5.42%Jumbo mortgages30-year6.72%15-year5.89%FHA loans30-year7.25%15-year5.25%VA loans30-year5.86%15-year5.52%Note thatFortunereviewed the most recent Zillow data available as of Nov. 21.How mortgage refinancing worksA mortgage refinance essentially pays off your existing home loan with a new one. Just like when you applied for a mortgage the first time around, you’ll need to apply and meet lender criteria regarding your credit profile, proof of income, your debt-to-income (DTI) ratio, and more. Note that this means your credit score will likely take a small hit due to the hard inquiry. And it also means if you don’t meet the lender’s requirements, you can be denied for a refi loan.What’s happening with mortgage rates in the market?Some observers hoped mortgage interest rates would fall in tandem cuts made by the Federal Reserve to the federal funds rate late last year. But, that didn’t happen, and mortgage rates remained stubbornly near the 7% mark—looking at the nationwide average for 30-year, fixed-rate loans—for months.Rates have remained well above the pandemic-era lows, when some homeowners snagged loans with rates in the 2% and 3% range. Many remain locked in, unwilling to move or refinance in the current environment. A report from Redfin showed that as of the third quarter of 2024, 82.8% of homeowners with a mortgage had a rate below 6%.Still, homeowners finally started getting some relief in late August and early September of 2025, when mortgage rates started trending noticeably downward ahead of the Fed’s Sept. 16-17 meeting—at which the central bank delivered the year’s first rate cut. The Fed followed up with a second cut to the federal funds rate at the end of October, as well.When it might make sense to refinance your mortgageAs we’ll cover more in the next section, it’s not free to refi your home loan. So, when does it make sense to accept the upfront costs and refinance? One common guideline is that if you can get a new rate that’s a full percentage point lower than your current rate, it’s worth refinancing. Using recent market conditions as an example, someone who took out a home loan at 7% might find it worth their while to refinance if rates drop and they can get a new loan with a 6% rate.It may also be worth refinancing to tap your home equity through a cash-out refi. Note that you’ll typically need to have at least 20% equity in your home for this. So, if you purchased the place with the 5% minimum down payment—or 3% for first-time homebuyers—typically available on conventional loans, it could take a while before you’re eligible for a cash-out refi.Yet another situation where you might benefit from refinancing is to change your loan term. For example, maybe you took out a 15-year mortgage intending to save on interest charges in the long run in exchange for higher monthly payments. But life is unpredictable, and maybe you’ve decided the monthly payments are spreading your budget too thin. Refinancing to a 30-year loan may offer the flexibility to make smaller monthly payments that fit your budget better.There are also cases where it can make sense to switch loan types. If you have an FHA loan with a lifetime requirement to pay mortgage insurance, for instance, refinancing so you can change your mortgage to a conventional loan could provide an opportunity to ditch that insurance cost (called MIP on an FHA loan or PMI on a conventional). Or, if you initially took out an adjustable-rate mortgage (ARM) and you’ve realized you intend to keep the loan for a significant number of years, refinancing to switch to a fixed-rate mortgage might be a smart way to avoid rate hikes when your ARM’s adjustment period kicks in.Costs to refinance your mortgageMuch like a traditional home loan taken out to purchase a property, refinancing a mortgage involves closing costs that run about 2% to 6% of the loan amount. For instance, if you do a rate-and-term refi on a $300,000 loan, you might pay anywhere from $6,000 to $18,000 in refi closing costs. Here are some of the costs you might see on your refinance loan estimate:Lender origination fees.Appraisal fees.Title search and insurance fees.Loan application fees.Survey fees.Attorney fees (if required in your state).Recording fees.Prepayment penalties (if your current loan servicer charges one).Different types of mortgage refi loansThere are a wide variety of mortgage refinance loans on the market, and the right one for your needs will depend on what you’re aiming to accomplish and what type of mortgage you currently have. Here are some common refi options:Rate-and-term refinance:This is the most popular refi option that allows you to lower your interest rate and/or shorten your loan term. While shortening your loan term does typically earn you a lower rate and hefty lifetime interest savings, you’ll be locked into higher monthly mortgage payments.Cash-out refinance:With a cash-out refi, you can tap your home’s equity by replacing your existing loan balance with a new, larger one and withdraw the difference in cash. You can use the money for home improvements, consolidating high-interest debt or other financial goals.No-closing-cost refinance:With this option, your lender covers your closing costs in exchange for charging you a higher interest rate. If you don’t have cash upfront for closing costs and could otherwise benefit from a refinance, this option may be worth looking into.Streamline refinance:Available to existing FHA, VA and USDA loan borrowers, these refi options involve less documentation and a more straightforward application and approval process.Refinancing with your existing lender vs. a new oneThere’s no requirement that you refinance with the same lender you got your original mortgage from. Thus, it’s worth shopping around for the lowest rate and best service you can find. However, some lenders may offer incentives if you stick with them, such as waiving a portion of the closing costs. Since these charges can be an expensive upfront cost, it’s worth checking with your existing lender about incentives—as that might reduce the barrier to refinancing and allow you to refi more easily than you’d otherwise be able to. Finally, know that if your mortgage was purchased by Fannie Mae or Freddie Mac, you might be eligible for programs such as Refi Now and Refi Possible.Fortune Brainstorm AIreturns to San Francisco Dec. 8–9 to convene the smartest people we know—technologists, entrepreneurs, Fortune Global 500 executives, investors, policymakers, and the brilliant minds in between—to explore and interrogate the most pressing questions about AI at another pivotal moment. Register here.
Continue Reading
