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Today, multiple notable refinance rates dropped off.
Both 15-year fixed and 30-year fixed refinances saw their average rates shrink. And average rates for 10-year fixed refinances also shrank.
Mortgage refinance rates are constantly fluctuating. However, they’re currently very low. For those looking to refinance their existing mortgage, this can be a great opportunity to reduce your interest rate.
Refinance rates currently are:
- 30-year mortgage refinance rate: 3.11%
- Currently, the average 15-year fixed-rate refinance is 2.43%
- Today, the average 10-year fixed refinance rate is 2.38%
30-Year Fixed Refinance Rates
Right now, the average 30-year, fixed refinance has an interest rate of 3.11%, a decrease of 5 basis points from what we saw last week.
You can use our mortgage calculator to get an idea of what your monthly payments will be 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
Currently, the average rate for a 15-year fixed refinance loan is 2.43%, a decrease of 5 basis points over the previous week.
Monthly payments on a 15-year refinance loan can be a considerable amount more than what you’d get with a 30-year mortgage. 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 2.38%, a decrease of 6 basis points from what we saw last 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.
Mortgage Refinance Rate Movement
But rates should still remain favorable for borrowers throughout this year. Experts see rates staying low throughout 2021, and will only start seeing consistent gains in the second half of the year. Whatever ends up happening with refinance rates in the long term will depend on broad factors, such as inflation and our economic recovery.
We determine refinance rate trends using data aggregated by Bankrate, which is owned by the same parent company as NextAdvisor. Lenders from across the nation supply information to Bankrate, which is provided in the table below:
|30-year mortgage refinance rate||3.11%||3.16%||-0.05|
|15-year fixed refinance rate||2.43%||2.48%||-0.05|
|10-year fixed refinance rate||2.38%||2.44%||-0.06|
Rates as of May 5, 2021.
Factors Behind Today’s Refinance Rates
While there’s no single entity that sets refinance rates, the Federal Reserve has an outsized influence on them. When it decides to ramp up its purchase of mortgage-backed securities, that puts downward pressure on mortgage rates. The Federal Reserve’s policies also impact inflation, which can influence what direction rates are going.
However, there are personal factors that impact what refinance rate you are qualify for. How much equity you have in your home is important. Having at least 20% equity will help you to get the lowest possible rate. You also need to pay attention to your personal finances, and the best refinance rates are usually available to those with better credit scores and less debt.
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?
The past year was a historically excellent time to refinance because rates had never been lower. However, since January mortgage rates have crept up and crossed the 3% threshold for the first time since last summer.
Even though the days of record breaking refinance rates are behind us, this is still an exceptional time to refinance for many homeowners. If you can lock in today’s rates that are just north of 3%, you are getting a deal with a close to all-time low rate.
So there is still time to save with a refinance, but that window is closing. Many experts are predicting rates to continue to increase as the economy returns to pre-pandemic levels over the next year.
What’s Driving Increasing Refinance Rates?
Over the past few months, we’ve seen a steady increase in refinance rates.
As the economy continues to recover, you should expect to see rates rise. Although a full recovery may not happen in the near term, rates have risen on the expectation of a bright economic future. The new round of stimulus has increased the likelihood of rising inflation in many investors minds, which has driven up Treasury bond yields. And mortgage rates typically move in tandem with Treasury bonds.
While refinance rates haven’t grown to levels beyond what many experts predicted, they have increased sooner than anticipated. Keep in mind, that from a historical perspective, refinance rates are still exceptionally low. So the window to save money with a mortgage refinance is still open for many homeowners.
How to Qualify for the Lowest Refinance Rate
Your finances have a big impact on the refinance rate you get. Less debt and a better credit score typically will get you a better mortgage refinance rate.
But your personal financial situation isn’t the only factor that impacts the refinance rates you’re offered. A better loan-to-value ratio (LTV) may help you get a lower refinance rate. So it’s better to have more equity. You want to have at least 20% equity, or a loan-to-value ratio of 80% or less.
Even the mortgage itself will impact your refinance interest rate. A loan with a shorter repayment term generally has lower interest rates than mortgage refinance loans with longer repayment terms, all else equal. Your refinance rate is also impacted by the type of refinance you plan on taking out. A cash-out refinance is viewed as a riskier loan and will come with a higher mortgage refinance rate than other types of mortgage refinancing.
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.
Mortgage Interest Rates by Loan Type
Mortgage Refinance Rates
Home Purchase Rates
- 30 Year Fixed Mortgage Rates
- 20 Year Fixed Mortgage Rates
- 15 Year Fixed Mortgage Rates
- 10 Year Fixed Mortgage Rates