Many benchmark refinancing rates have declined today. Fixed 15-year and 30-year refinances have seen their average rates fall. In addition, the average rate for a fixed 10-year refinancing has become scarce. Although refinancing rates are dynamic, they are at historically low levels. For this reason, now is a great time for homeowners to get a good refinance rate. But as always, be sure to think about your personal goals and circumstances first before you get refinancing, and look for a lender who can best meet your needs.
30-year fixed rate refinancing
The current average interest rate for a 30-year refinance is 3.08%, down 4 basis points from what we saw a week ago. (One basis point equals 0.01%.) One of the reasons to refinance into a 30-year fixed loan from a shorter loan term is to lower your monthly payment. If you are currently having difficulty making your monthly payments, a 30-year refinance might be a good option for you. However, the interest rates for a 30 year refinance will generally be higher than the rates for a 15 or 10 year refinance. It will also take you longer to pay it off.
Refinancing at a fixed rate over 15 years
The current average interest rate for 15-year refinances is 2.36%, down 1 basis point from what we saw the week before. Refinancing a 15-year fixed loan from a 30-year fixed loan will likely increase your monthly payment. But you will save more money over time because you pay off your loan faster. Interest rates for a 15-year refinance also tend to be lower than for a 30-year refinance, so you’ll save more in the long run.
10-year fixed rate refinancing
For fixed 10-year refinances, the average rate is currently 2.30%, down 2 basis points from a week ago. Compared to a 30 and 15 year refinance, a 10 year refinance will generally have a lower interest rate but a higher monthly payment. 10-year refinancing can help you pay off your home much faster and save on interest. However, you need to analyze your budget and your current financial situation to make sure that you will be able to afford the highest monthly payment.
Where are the rates going
We track refinancing rate trends using information collected by Bankrate, which is owned by CNET’s parent company. Here is a table with the average refinance rates provided by lenders nationwide:
Average refinancing interest rates
|Product||Rate||A week ago||Switch|
|30-year fixed refi||3.08%||3.12%||-0.04|
|15-year fixed refi||2.36%||2.37%||-0.01|
|Refi fixed 10 years||2.30%||2.32%||-0.02|
Prices as of October 6, 2021.
How to Find Custom Refinance Rates
When looking for refinancing rates, be aware that your specific rate may differ from what is advertised online. Your interest rate will be influenced by market conditions as well as your credit history and demand.
Typically, you’ll need a high credit score, low credit usage rate, and a consistent, on-time payment history in order to get the best rates. Researching interest rates online is always a good idea, but you will need to connect with a mortgage professional to get your exact refinance rate. You should also consider the fees and closing costs, which could offset the potential savings of a refinance.
Since the start of the pandemic, many lenders have been more stringent with whom they approve a loan. If you have a low credit score or a bad credit history, you might have a hard time refinancing at the lowest interest rates.
To get the best refinance rates, you first need to make your application as strong as possible. The best way to improve your credit rating is to get your finances in order, use credit responsibly, and monitor your credit regularly. Also, be sure to compare offers from multiple lenders to get the best rate.
Is Now the Right Time to Refinance?
In general, it’s a good idea to refinance if you can get an interest rate lower than your current interest rate, or if you need to change the term of your loan. It is true that over the past year interest rates have been at an all time low. But when deciding to refinance, be sure to factor in factors other than market interest rates.
Be sure to consider your goals and financial situation, including how long you plan to stay in your current home. It helps to have a specific goal for refinancing, such as lowering your monthly payment or adjusting the length of your loan. Also keep in mind that closing costs and other costs may require an initial investment.
Note that some lenders have tightened their requirements since the start of the pandemic. If you don’t have a strong credit score, you might 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 initiative. But weigh the pros and cons first to make sure it’s right for your situation.