Multiple closely followed mortgage refinance rates advanced today. Both 15-year fixed and 30-year fixed refinances saw their average rates go higher. In addition, the average rate on 10-year fixed refinance also moved up. Refinance interest rates are never set in stone — but rates have been historically low. If you plan to refinance your home, now might be an excellent time to secure a good rate. Before you refinance, remember to think about your personal needs and financial situation, and speak with different lenders to find the best one for you.
30-year fixed-rate refinance
The current average interest rate for a 30-year refinance is 3.15%, an increase of 14 basis points from what we saw 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. Because of this, a 30-year refinance can be a good idea if you’re having trouble making your monthly payments. In exchange for the lower monthly payments though, rates for a 30-year refinance will typically be higher than 10- and 15-year refinance rates. You’ll also pay off your loan slower.
15-year fixed-rate refinance
The current average interest rate for 15-year refinances is 2.44%, an increase of 15 basis points from what we saw the previous week. A 15-year fixed refinance will most likely raise your monthly payment compared to a 30-year loan. On the other hand, you’ll save money on interest, since you’ll pay off the loan sooner. 15-year refinance rates are typically lower than 30-year refinance rates, which will help you save even more in the long run.
10-year fixed-rate refinance
For 10-year fixed refinances, the average rate is currently at 2.38%, an increase of 13 basis points over last week. Compared to a 30-year and 15-year refinance, a 10-year refinance will usually have a lower interest rate but higher monthly payment. A 10-year refinance can help you pay off your house much quicker and save on interest. Just be sure to carefully consider your budget and current financial situation to make sure that you can afford a 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 reported by lenders across the US:
Average refinance interest rates
|30-year fixed refi||3.15%||3.01%||+0.14|
|15-year fixed refi||2.44%||2.29%||+0.15|
|10-year fixed refi||2.38%||2.25%||+0.13|
Rates as of Oct. 4, 2021.
How to shop for refinance rates
When looking for refinance rates, know that your specific rate may differ from those advertised online. Though current market conditions will be a factor, your particular interest rate will depend largely on your application and credit history.
Having a high credit score, a low credit utilization ratio and a history of consistent and on-time payments will generally help you get the best interest rates. You can generally get a good feel for average interest rates online, but make sure to speak with a mortgage professional in order to see the specific rates you qualify for. And don’t forget about fees and closing costs, which may add a hefty amount upfront.
It’s also worth noting that since the beginning of the pandemic, lenders have been stricter with their requirements. If you have a low credit score or a poor credit history, you might have trouble getting a refinance at the lowest interest rates.
To get the best refinance rates, you’ll first want to make your application as strong as possible. The best way to improve your credit ratings is to get your finances in order, use credit responsibly and monitor your credit regularly. Also be sure to compare offer from multiple lenders in order to get the best rate.
Is now a good time to refinance?
Most people refinance because the market interest rates are lower than their current rates or because they want to change their 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. 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. 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.