Today’s Mortgage Refinance Rates, January 11, 2021 | Rates advance

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Today a number of notable mortgage refinance rates moved higher.

Both 15-year fixed and 30-year fixed refinances saw their mean rates go up. In addition, the average rate on 10-year fixed refinance also saw an increase.

Refinancing rates are constantly changing. However, they are presently abnormally low, making them a potentially great deal for borrowers. For those looking to refinance their existing mortgage, this may possibly be the perfect time to secure a record-low rate.

Take a look at local refinance rates.

30-Year Fixed Refinance Rates

Right now, the average 30-year fixed refinance has an interest rate of 2.94%, an increase of 4 basis points what we saw last week. Just last month a 30-year fixed refinance had a smaller average rate of 1.00%.

You can use our mortgage calculator to determine how much your mortgage will cost you every month and find out how much less interest you’ll pay by making additional payments. Our mortgage calculator will also show you how much interest you’ll be charged over the entire loan term.

15-Year Fixed-Rate Refinance

Right now, average 15-year fixed refinance rates are 2.39%, an increase of 2 basis point from a week ago.

Monthly payments on a 15-year refinance loan are tougher to fit into a monthly budget than a 30-year mortgage payment would be. However, a shorter loan term can save you thousands of dollars interest over the life of the loan.

10-Year Fixed-Rate Refinance

The average 10-year, fixed refinance rate is 2.41%, an increase of 3 basis points from the rate observed over the previous week.

Monthly payments with a 10-year refinance term would cost a significant amount more per month than you would with a 15-year term, but you’ll pay less interest in the long term.

Where Are Rates Going

To determine refinance rate trends, we use data aggregated by Bankrate, which is owned by the same parent company as NextAdvisor. Lenders nationwide supply information to Bankrate, which is provided in the table below:

Average refinance interest rates
ProductRateLast weekChange
30-year mortgage refinance rate2.94%2.90%+0.04
15-year fixed refinance rate2.39%2.37%+0.02
10-year fixed refi2.41%2.38%+0.03

Rates as of January 11, 2021.

Take a look at mortgage refinance rates for a number of different loans.

Is This the Right Time to Refinance?

For many borrowers, now is an excellent time to refinance because rates have been near historic lows. While refinance rates change day to day, if you can lock in a rate near 3%, that’s an exceptionally low interest rate. Keep in mind, you will need a high credit score to qualify for these ultra-low rates. Also, if you’re closing on a refinance after Dec. 1, 2020, your loan might end up being more expensive. That’s when the Federal Housing Finance Agency is adding a new refinancing fee of 0.5% on conventional refinance loans of $125,000 or more.

Current Refinance Rate Market

The historically low interest rates we’ve experienced have helped fuel a hot market for mortgage refinancing. For many borrowers now is a good opportunity to refinance, but you should expect to have a longer wait than usual to close on your new mortgage. And as some mortgage lenders become more risk averse you’re more likely to run into stricter lending guidelines. So borrowers with blemishes on their credit report or who have recently changed jobs may find themselves unable to qualify for a refinance.

When Should You Refinance?

Although there are a variety of refinance loan types, the main reasons to refinance are to secure a lower interest rate or to adjust your loan’s term.

Locking in a lower interest rate can reduce your monthly payments and save you on interest in the long haul. You can also accomplish the same goal by changing your repayment terms. If you opt for a longer term, you could lower your monthly payments. The trade off to this strategy is you’ll end up paying more interest over the life of the loan. On the other hand, if you refinance to a shorter term loan, say a 15-year mortgage, you’ll pay off your loan sooner and end up paying less interest as a result. Of course, 15-year mortgages have noticeably higher monthly payments compared to 30-year loans. Thanks to the exceptionally low interest rates, you may be able to get the best of both worlds. If you can significantly reduce your interest rate with a refinance, you may be able to take out a shorter-term loan and still keep your payments around the same level.

If you have enough equity in your home, you could also do what is known as a cash-out refinance. With this particular refinance option, you’ll be taking out a bigger mortgage, but you’ll walk away with a chunk of cash. Because interest rates are so low, this is a decent opportunity to consolidate high-interest debt or finance a home improvement project.

How to Refinance Your Mortgage

The first step to refinancing your mortgage is to shop around with multiple lenders to find the best offer. To compare offers from every lender you need to look at more than just the interest rate. You should carefully look at the Loan Estimate form each lender will provide after you apply and be sure you’re paying comparable fees.

What do You Need to Refinance?

Refinancing is a similar process to taking out a mortgage for a home purchase. During the underwriting process, your lender will review your employment, check your credit, and you’ll be required to provide documents to verify your income. Your lender should be able to provide you with a checklist of the supporting documents you’ll need, so you can organize them ahead of time.

How We Got These Rates

The rates we have included are averages provided by Bankrate and are calculated after the close of the previous business day. The lenders that the “Bankrate.com Site Average” tables include are not the same every day.

National lenders provide this mortgage rate information to Bankrate.com. It is possible the mortgage rates we reference has changed since this was published.

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