Refinancing rates fell ahead of this week’s inflation report. Refi interest rate on July 9, 2024

Mortgage rates are constantly changing, but there’s a good chance they will fall this year. To get the lowest interest rate, shop around and compare offers from different lenders. Please enter your information below to receive a customized quote from one of CNET’s partner lenders.

About these rates: Like CNET, Bankrate is owned by Red Ventures. This tool features partner rates from lenders you can use when comparing multiple mortgage rates.

Current Refinance Rate Trends

When mortgage rates hit historic lows during the pandemic, there was a refinancing boom as homeowners were able to get lower rates. But with average mortgage rates currently around 7%, it’s not financially feasible to get a new home loan.

At the beginning of the year, hopes were high that the Federal Reserve would cut interest rates in the summer. But high inflation and a strong labor market over the past few months have made it clear to investors that it will take longer than expected for the Fed to cut interest rates.

Higher mortgage rates make refinancing less attractive for homeowners, making them more likely to keep their existing mortgages.

Refinancing interest rate trends in 2024

“There’s a good chance rates will be lower than they are now by the end of 2024,” said Keith Gumbinger, vice president of mortgage website HSH.com. But accurately predicting the end result for mortgage rates is difficult because it depends on economic data we don’t yet have. .

If inflation continues to improve and the Fed is able to cut interest rates, mortgage refinancing rates could be between 6% and 6.5% at the end of the year.

But Zillow Home Loans senior economist Orphe Divounguy said data showing rising inflation could cause investors to reconsider the possibility of a rate cut by the Federal Reserve and push mortgage rates higher.

If you’re considering refinancing, remember you can’t time the economy: interest rates fluctuate hourly, daily and weekly, and are affected by a range of factors. Matt Graham of Mortgage News Daily says the best move is to pay close attention to daily rate changes and develop a strategy on how to take advantage of a large enough percentage drop.

What does refinancing mean?

When you refinance your mortgage, you take out another home loan to pay off your original mortgage. With a traditional refinance, your new home loan will have a different term and/or interest rate. With a cash-out refinance, you tap into your equity through a new loan that’s larger than your existing mortgage balance, pocketing the difference.

Refinancing can be a good financial move if you have a lower interest rate or can pay off your home loan in less time, but consider whether it’s the right choice for you. Lowering your interest rate by 1% or more can incentivize a refinance, allowing you to significantly reduce your monthly payments.

How to choose the right refinance type and term

Prices posted online are often subject to certain qualifications. Your individual interest rate will be affected by market conditions and your specific credit history, financial situation and application. Having a high credit score, a low credit utilization ratio, and a history of consistent on-time payments will often help you get the best interest rate.

30-year fixed-rate refinance

The current average 30-year fixed refinancing rate is 7.03%, down 2 basis points from this time last week. (One basis point equals 0.01%.) Monthly payments on a 30-year fixed refinance are typically lower than with a 15-year or 10-year refinance, but the repayments will take longer and will typically cost more in interest. In the long run.

15-year fixed-rate refinance

The current average 15-year refinancing rate is 6.59%, down 7 basis points from last week. Although a 15-year fixed refinance will likely raise your monthly payments compared to a 30-year loan, you’ll save more money over time because you’ll pay off the loan more quickly. quick. Additionally, 15-year refinance rates are typically lower than 30-year refinance rates, which will help you save more in the long run.

10-year fixed-rate refinance

The current average 10-year refinancing rate is 6.43%, down 25 basis points from last week. 10-year refinances typically have the lowest interest rates but the highest monthly payments of all refinance terms. A 10-year refinance can help you pay off your home loan faster and save money on interest, but make sure you can afford the higher monthly payments.

To get the best refinance rate, make your application as strong as possible by getting your finances in order, using credit responsibly and monitoring your credit regularly. And don’t forget to talk to multiple lenders and shop around.

When to consider mortgage refinancing

Homeowners often refinance to save money, but there are other reasons to do so. Here are the most common reasons homeowners refinance:

• To get a lower interest rate: If you can get an interest rate that’s at least 1% lower than your current mortgage rate, it might make sense to refinance.
• Switch mortgage type: If you have an adjustable-rate mortgage and want more security, you can refinance to a fixed-rate mortgage.
• Cancellation of Mortgage Insurance: If you have an FHA loan that requires mortgage insurance, you can refinance to a conventional loan once you have 20% equity.
• To change the length of your loan term: Refinancing to a longer loan term may lower your monthly payments. Refinancing short-term will save you money on interest in the long run.
• To tap into your equity with a cash-out refinance: If you replace your mortgage with a larger loan, you can get the cash difference to cover large expenses.
• To cancel someone’s mortgage: If you get divorced, you can take out a new home loan in your name and use the funds to pay off your existing mortgage.