Refinance pricing begins with your credit score. Not your home’s value, not your neighborhood, not how many years you’ve banked at the same branch. Before a loan officer has pulled an income figure or ordered an appraisal, the pricing engine has already read your middle score and dropped you into a tier. Everything after that adjusts around it.
That’s both the frustrating part and the useful part. Frustrating because it feels arbitrary and impersonal. Useful because the tiers are published, predictable, and occasionally worth waiting for.
The tier structure lenders actually use
Fannie Mae and Freddie Mac publish a grid of loan-level price adjustments, usually shortened to LLPAs. Lenders apply them on top of a base rate. The bands are roughly 20 points wide, and they run from a 620 floor up past 780, with the sharpest cliffs sitting at 620, 640, 660, 680, 700 and 740.
A 738 and a 702 land in the same bucket. So do a 661 and a 679. This is why two people with genuinely different credit histories can be quoted identical rates, and why someone who gains twelve points and crosses a line can suddenly save real money.
If you want a sense of where the underlying market sits before you start comparing tiers, our month-by-month overview of where refinance rates currently sit and whether a refinance saves you anything is a better starting point than any single quote.
Refinance rates by credit score: a rough map
The figures below assume a 30-year fixed refinance on a primary residence, around 75% loan-to-value, no cash out, and a single borrower. Adjust upward for cash-out, investment properties, condos with weaker occupancy, or jumbo loans.
- 760 and above: roughly 6.0%–6.2%. You get the lender’s advertised pricing, more or less.
- 740–759: around 6.15%–6.3%.
- 700–739: 6.3%–6.4%.
- 680–699: 6.5%–6.7%.
- 660–679: 6.8%–7.0%.
- 640–659: 7.2%–7.5%.
- 620–639: 7.6%–8.0%, and expect fewer lenders to call back.
- Below 620: conventional pricing largely disappears. FHA, VA, or a portfolio lender at a credit union becomes the realistic path.
These are illustrative ranges, not quotes. Rates move daily, and one lender’s 680 tier can be meaningfully cheaper than another’s.
Small score moves, disproportionate price moves
The gap between 680 and 720 is typically about 0.4 percentage points. The gap between 620 and 700 is closer to a full point. But the single biggest cliff is 740: below it you’re paying for credit history you haven’t quite earned in the eyes of the pricing model, above it you stop paying for it at all. Getting from 725 to 745 is often the highest-return forty points in the whole grid.
What the gap looks like on a real payment
Take a $350,000 loan balance and three borrowers refinancing the same house on the same day.
The 765-score borrower gets 6.15% and pays $2,132 a month in principal and interest. The 685-score borrower gets 6.85% and pays $2,294. The 645-score borrower gets 7.65% and pays $2,483.
That’s $351 a month between the top and bottom of that spread, or about $4,200 a year. Held for the full 30 years, the difference exceeds $126,000. No amount of haggling over the appraisal fee closes that gap. The score did all the work.
The score your lender uses isn’t the one you check
Mortgage lenders typically pull FICO Score 2, 4 and 5, older model versions built specifically for mortgage underwriting. The free score in your banking app is usually a VantageScore or a newer FICO edition. They can differ by 20 to 40 points in either direction, and occasionally more if your file is thin or recently active.
Two mechanics matter here. First, on a conventional loan the lender generally takes the median of your three bureau scores, discarding the highest and the lowest. Second, if you’re applying with a co-borrower, the rate is set by the lower of your two median scores. A 790 paired with a 665 prices like a 665.
This is also why the industry’s headline average is a poor planning tool. The average mortgage refinance rate works as a compass rather than a quote, because it describes a borrower who may not resemble you at all.
How to climb a tier before you apply
Score improvements take 30 to 60 days to show up, mostly because of statement cycles. If you’re two months out from applying, there’s still time for meaningful movement.
- Pay revolving balances down before the statement closes. Utilization is recalculated on the balance the issuer reports, not the one you see after you pay. Getting below 10% of your limit on every card is worth more than almost anything else.
- Leave old accounts open. Closing a card you’ve held for nine years shortens your average account age and cuts your available credit at the same moment.
- Dispute genuine errors now. A single collections item reporting incorrectly can cost 40 points. Bureau disputes typically resolve in 30 days.
- Don’t open new credit in the six months before applying. A new auto loan or store card in month three can undo a year of careful repayment.
- Ask about a goodwill deletion on a single late payment if your history is otherwise clean. It works more often than people expect.
Waiting has a price, so do the arithmetic
Say you’re at 688 and a lender quotes 6.55%. Ninety days of disciplined paydown could push you past 700, dropping the quote to roughly 6.35%. On a $350,000 loan that’s about $50 a month, or $18,000 over the life of the loan.
The cost of waiting is the extra interest you pay in the meantime, plus the risk that rates rise while you’re tidying up your file. Three months at 0.2 points higher on that balance is roughly $180. Against $18,000, waiting is obviously correct.
Flip the scenario. If you’re at 752 and a lender tells you to wait until you hit 780, the price difference is close to zero and you’re just absorbing rate risk for nothing. Movement in the market can easily swamp a 20-point score gain, which is why separating real rate movement from weekly noise matters as much as your credit profile does.
Paying points doesn’t fix a low score
Discount points buy down the rate, usually around 0.25 points of rate for 1% of the loan amount. On $350,000, spending $3,500 to move from 6.15% to 6.40% saves about $57 a month, which takes 61 months to break even. That’s a reasonable deal if you plan to stay.
What points can’t do is erase the LLPAs attached to a 640 score. You’ll pay the adjustment and the points. Lenders will happily let you do both, so be careful reading an offer that looks competitive on rate but carries four points in fees.
Compare the APR, then compare the fees
A low headline rate paired with high origination charges is a marketing position, not a bargain. The APR folds those costs into a single annualized number, which makes it harder for a lender to hide behind a pretty rate. The bigger number on the Loan Estimate is usually the honest one, and it’s the one to line up across three or four lenders quoting the same lock period.
Get every quote on the same day, for the same loan amount, term and lock length. Ask each lender which credit tier they priced you in, and whether a rescore before closing could improve it. Some will reprice after a rapid rescore; many won’t volunteer it. Your score is the biggest lever you have, so it’s worth knowing exactly where you sit on the grid before you sign anything.