What is the current average 30-year fixed mortgage rate in May 2026?

As of May 2026, the average 30-year fixed mortgage rate generally fluctuates between 6% and 7.5%, depending on market conditions, lender, and borrower creditworthiness. These rates are significantly higher than the historic lows seen in 2020-2021.

Should I refinance my mortgage if interest rates are higher than my current rate?

Refinancing when rates are higher than your current mortgage is generally not advisable if your primary goal is to lower your interest rate. However, it might make sense for a cash-out refinance to consolidate high-interest debt or to switch from an adjustable-rate mortgage to a fixed-rate for stability.

What home renovations offer the best return on investment (ROI)?

Kitchen and bathroom remodels consistently offer high ROI, often recouping 60-80% of their cost at resale. Other strong contenders include adding a deck or patio, replacing garage doors, and improving energy efficiency with new windows or insulation.

How much equity do I need to qualify for a home equity loan or HELOC?

Lenders typically require you to have at least 15-20% equity in your home to qualify for a home equity loan or HELOC. This means your outstanding mortgage balance should be no more than 80-85% of your home's current market value.

What are the biggest financial risks of relocating in a high-interest rate market?

The biggest financial risks include incurring significant selling costs (agent commissions, closing costs), paying higher interest rates on a new mortgage, and potentially losing the benefit of a low-interest rate on your current home. These factors can drastically increase your monthly housing expenses.

Is it better to renovate or relocate if I need more space?

If you have a low-interest mortgage and are happy with your neighborhood, renovating to add space is often more financially prudent than relocating. Moving means taking on a new, higher-interest mortgage and incurring substantial selling and buying costs.

How do I calculate the break-even point for a mortgage refinance?

To calculate the break-even point, divide the total closing costs of the refinance by your monthly savings from the new loan. For example, if closing costs are $5,000 and you save $100 per month, your break-even point is 50 months (5,000 / 100).

Mortgage Maze: Refinancing, Renovating, Relocating | One…