Today’s average refinance rates
mortgage
Refinance
As mortgage rates start to drop, be ready to take advantage of the opportunity. Experts recommend shopping around and comparing multiple quotes to get the lowest price. Enter your information here to get 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.
Refinance Rate News
Mortgage refinance rates have been slowly declining as inflation reports cool and employment data softens. Still, most homeowners currently have mortgage rates well below 6%, which means the financial incentive to refinance isn’t there yet.
But there’s always an exception to the rule: If you bought your home late last year when mortgage rates were above 8%, the recent drop in rates might be enough for you to consider refinancing.
While experts don’t expect a refinance boom like the one seen in 2020 and 2021 when mortgage rates hit all-time lows, it’s a positive sign that rates tend to fall or move sideways rather than spike.
What will happen to refinance rates in 2024?
Slowing inflation and expected rate cuts from the Federal Reserve should help bring mortgage rates down to around 6.5% by the end of 2024, experts say.
Melissa Cohn, regional vice president and member at William Raveis Mortgage, said the Fed has not adjusted its short-term interest rate, known as the federal funds rate, since last summer, and a rate cut appears imminent, possibly as soon as September. Member of CNET Money’s Expert Review Board.
As the Federal Reserve slowly lowers interest rates over the next few years, mortgage rates should gradually ease. But if the Fed chooses to delay a rate cut, or if economic data shows a resurgence in inflation, mortgage rates could move 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 is larger than your existing mortgage balance, bringing the difference into cash.
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.
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
For 30-year fixed refinances, the average rate is now 6.56%, down 32 basis points from a week ago. (One basis point equals 0.01%.) Monthly payments on a 30-year fixed refinance are typically lower than 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 fixed refinance rate is 6.00%, down 30 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 fixed refinancing rate is 5.98%, down 20 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.
Reasons you might refinance your home
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.
