Refi Rates Today, May 3, 2021 | Rates Rise

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Today, multiple closely followed mortgage refinance rates saw growth.

Both 15-year fixed and 30-year fixed refinances saw their average rates go up. The average rate on 10-year fixed refinance mortgages were stable.

Refinancing interest rates are constantly fluctuating. However, they’re presently low, making them a potentially great deal for borrowers. For those looking to refinance their existing mortgage, this might be the right move to lock in a great deal on an interest rate.

Here are the average rates for 30-year, 15-year, and 10-year refinance loans are:

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 3.17%, an increase of 4 basis points from a week ago.

You can use our mortgage calculator to determine how much your mortgage will cost you every month and to understand how much you could save if you made extra 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 2.46%, an increase of 3 basis points from what we saw last week.

Monthly payments on a 15-year refinance loan will be bigger compared to a 30-year refinance at the same rate. However, a shorter loan term can help you build up equity in your home much more quickly.

10-Year Fixed-Rate Refinance

The average 10-year, fixed refinance rate is 2.41%, unmoved from the rate observed over the previous week.

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

How Mortgage Refinance Rates Have Changed

The days of all-time historically low mortgage rates could be over. In recent weeks, mortgage rates inched above 3% for the first time since July, according to Freddie Mac’s weekly survey.

But rates should still remain favorable for borrowers throughout this year. Experts see rates staying low throughout 2021, and that during the back half of 2021 it’s more likely that rates will make steady gains. Where refinance rates move in the long term will depend on broad factors, such as inflation and our economic recovery.

The table below shows where refinance rates were headed in the last week. This information is provided by Bankrate, which aggregates data collected from lenders across the country. Bankrate is owned by Nextadvisor’s parent company, Red Ventures.

Average refinance interest rates
ProductRateLast weekChange
30-year mortgage refinance rate3.17%3.13%+0.04
15-year fixed refinance rate2.46%2.43%+0.03
10-year fixed refinance rate2.41%2.41%N/C

Rates as of May 3, 2021.

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

How Are Refinance Rates Determined?

The refinance rate you qualify for is based on a number of things that aren’t in your control. The overall direction of the economy and decisions made by the Federal Reserve can have a large impact on refinance rates. However, your personal finances come into play as well.

Factors to pay attention to are:

  • Refinance loan type
  • Your loan-to-value ratio
  • Yields for 10-year Treasury bonds
  • Inflation rates
  • Personal finances: Credit score, and debt-to-income ratio
  • Health of the economy

Refinance Rate Predictions

On a day to day basis refinance rates can move up or down based on a wide variety of factors. But the general trend is going to be rising rates in the months to come.

In 2020, refinance rates fell to the lowest levels on record. The Federal Reserve bank would like to keep rates low in order to stimulate the economy, but in order to accomplish its goal we don’t need to have all-time low interest rates. And as unemployment continues to drop and people have more money to spend, inflation should rise. This is one factor that will push refinance rates higher over the long haul, even though they are currently favorably low.

Is Now the Right Time to Refinance?

Record low refinance rates drove a surge in mortgage refinancing over the past year. But as interest rates have rebounded from all-time lows, the number of borrowers looking to refinance has begun to shrink.

However, even with the downturn, the interest in mortgage refinancing remains stronger than it was before the pandemic drove rates into the ground. This is because refinance rates are hovering at just over 3%, which is still a historically good deal, even if it’s higher than the recent lows.

So as we turn our backs on record low interest rates, many borrowers are still able to save with a refinance. But many experts forecast that rates will continue to trend upward throughout 2021. So it’s reasonable to expect refinancing to get more expensive for borrowers as the year progresses.

Why Are Refinance Rates Increasing?

Since the beginning of 2021, refinance rates have been making a steady march upward.

This increase in rates has been driven by several factors, including inflation, and the economy. As the economy begins to show signs of life and spending increases thanks to a new round of economic stimulus, investors are expecting inflation to increase. And when inflation goes up, rates follow suit.

With more and more people getting vaccinated everyday, there is hope that the worst is behind us. So the days of all-time low rates look to be over. However, even with refinance rates making strong gains, they still remain low. So for many homeowners, now is still a good time to refinance, even if rates aren’t as low as they were just a few months ago.

How to Qualify for the Lowest Refinance Rate

Your financial situation has a big effect on the refinance rate you’ll be able to secure. Less debt and a better credit score generally translates into a better mortgage refinance rate.

Your situation isn’t the only thing that will impact the refinance rates you’re offered. Your property’s value compared to your loan balance also factors into the decision. Having at least 20% equity in your property is ideal.

Even the mortgage itself will impact your mortgage refinance rate. A shorter-term refinance loan generally has lower interest rates than a loan with longer terms. Also, if you want to pull cash out of your home with a cash-out refinance, you should expect to pay a higher mortgage rate for that privilege.

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.

Bankrate receives this mortgage rate information from lenders across the nation, but it is possible that the referenced rates have changed since publishing this article.

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