Multiple important refinance rates trailed off today.
Both 15-year fixed and 30-year fixed refinances saw their mean rates decrease. At the same time, average rates for 10-year fixed refinances also shrank.
Although refinance rates fluctuate , they have been quite low recently. If you plan to refinance your house, now might be a great time to get a good rate. But as always, make sure to first think about your personal goals and circumstances before refinancing, and talk to multiple lenders to find a lender who can best meet your needs.
30-year fixed refinance rates
For 30-year fixed refinances, the average rate is currently at 3.13%, a decrease of 2 basis points from what we saw one week ago. (A basis point is equivalent to 0.01%.)
One reason to refinance to a 30-year fixed loan from a shorter loan term is to lower your monthly payment. This makes 30-year refinances good for people who are having difficulties making their monthly payments or simply want a bit more breathing room. Be aware, though, that interest rates will typically be higher compared to a 15-year or 10-year refinance, and you’ll pay off your loan at a slower rate.
15-year fixed-rate refinance
For 15-year fixed refinances, the average rate is currently at 2.44%, a decrease of 1 basis point compared to one week ago.
Refinancing to a 15-year fixed loan from a 30-year fixed loan will likely raise your monthly payment. On the other hand, you’ll save a money on interest, since you’ll pay off the loan sooner. Interest rates for a 15-year refinance also tend to be lower than that of a 30-year refinance, so you’ll save even more in the long run.
10-year fixed-rate refinance
The average rate for a 10-year fixed refinance loan is currently 2.47%, a decrease of 1 basis points compared to one week ago.
You’ll pay more every month with a ten-year fixed refinance compared to a 30-year or 15-year refinance — but you’ll also have a lower interest rate. A 10-year refinance can be a good deal, since paying off your house sooner will help you save on interest in the long run. However, you should analyze your budget and current financial situation to make sure you’ll be able to afford the higher monthly payment.
Where rates are headed
We track refinance rate trends using information collected by Bankrate, which is owned by CNET’s parent company. Here’s a table with the average refinance rates supplied by lenders nationwide:
|30-year fixed refi||3.13%||3.15%||-0.02|
|15-year fixed refi||2.44%||2.45%||-0.01|
|10-year fixed refi||2.47%||2.48%||-0.01|
Rates as of July 9, 2021.
How to shop for refinance rates
When looking for refinance rates, know that your specific rate may differ from those advertised online. Market conditions aren’t the only factor in interest rates; your particular application and credit history will also play a large role.
To get the best interest rates, you’ll typically need a high credit score, low credit utilization ratio, and a history of making consistent and on-time payments. Researching interest rates online is always a good idea, but you’ll need to connect with a mortgage professional to get your exact refinance rate. Also remember to account for potential fees and closing costs.
It’s also worth noting that in recent months, lenders have been stricter with their requirements. This means that if you don’t have great credit ratings, you might not be able to take advantage of lowered interest rates — or qualify for a refinance in the first place.
One way to get the best refinance rates is to strengthen your borrower application. The best way to improve your credit ratings is to get your finances in order, use credit responsibly, and monitor your credit regularly. You should also shop around with multiple lenders and compare offers to make sure you’re getting the best rate.
When to consider a mortgage refinance
Generally, it’s a good idea to refinance if you can get a lower interest rate than that your current interest rate, or if you need to change your loan term. It’s true that in the past year, interest rates have been at a historic low. But when deciding whether to refinance, be sure to take into account other factors besides market interest rates.
A refinance may not always make financial sense. Consider your personal goals and financial circumstances. How long do you plan on staying in your home? Are you refinancing to decrease your monthly payment, pay off your house sooner — or for a combination of reasons? Also keep in mind that closing costs and other fees may require an upfront investment.
Note that some lenders have tightened their requirements since the beginning of the pandemic. If you don’t have a solid credit score, you may not qualify for the best rate.If you can get a lower interest rate or pay off your loan sooner, refinancing can be a great move. But carefully weigh the pros and cons first to make sure it’s a good fit for your situation.