Numerous closely followed refinance rates declined today.
Both 15-year fixed and 30-year fixed refinances saw their mean rates sink. In addition, the average rate on 10-year fixed refinance also slumped.
Although refinance rates fluctuate , they have been lower than they’ve been in years. Because of this, right now is an optimal time for homeowners to get a good refinance rate. But as always, make sure to first consider your personal goals and circumstances before refinancing, and shop around 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 2.94%, a decrease of 6 basis points compared to one week ago. (A basis point is equivalent to 0.01%.)
Refinancing to a 30-year fixed loan from a shorter loan term can lower your monthly payments. This makes 30-year refinances good for people who are having difficulties making their monthly payments or simply want a bit more breathing room. In exchange for the lower monthly payments though, rates for a 30-year refinance will typically be higher than 15-year and 10-year refinance rates. You’ll also pay off your loan slower.
15-year fixed-rate refinance
The average rate for a 15-year fixed refinance loan is currently 2.25%, a decrease of 4 basis point over last week.
With a 15-year fixed refinance, you’ll have a larger monthly payment than a 30-year loan. On the other hand, you’ll save 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 10-year fixed refinance rate right now is 2.28%, a decrease of 3 basis points from what we saw the previous week.
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 help you pay off your house much quicker and save on interest. 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 across the US:
|Product||Rate||A week ago||Change|
|30-year fixed refi||2.94%||3.00%||-0.06|
|15-year fixed refi||2.25%||2.29%||-0.04|
|10-year fixed refi||2.28%||2.31%||-0.03|
Rates as of August 5, 2021.
How to shop for refinance rates
When searching for refinance rates online, it’s important to remember that your specific financial situation will influence the rate you’re offered. Though current market conditions will be a factor, your particular interest rate will depend largely on your application and credit history.
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. To get your personalized refinance rates, you’ll need to speak with a mortgage professional, as the rates you qualify for may differ from the rates advertised online. You should also take into account any fees and closing costs that might offset the potential savings of a refinance.
Since the beginning of the pandemic, a lot of lenders have been stricter stricter with who they approve for a loan. 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.
Before applying for a refinance, you should make your application as strong as possible in order to get the best rates available. The best way to improve your credit ratings is to get your finances in order, use credit responsibly, and monitor your credit regularly. Don’t forget to speak with multiple lenders and shop around to find 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.
To decide whether a refinance is right for you, consider all of the factors including how long you plan to stay in your current home, the length of your loan term and the amount of your monthly payment. And don’t forget about fees and closing costs, which can add up.
Some lenders have tightened their requirements in recent months, so you may not be able to get a refinance at the posted interest rates — or even a refinance at all — if you don’t meet their standards. Refinancing at a lower interest rate can save you money in the long run and help you pay off your loan sooner. But a careful cost-benefit analysis is necessary to confirm that doing so makes sense.