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Today several benchmark refinance rates dropped off.
Both 15-year fixed and 30-year fixed refinances saw their average rates go down. At the same time, average rates for 10-year fixed refinances were stable.
Refinancing rates are constantly fluctuating, however rates have been hovering near historic lows for quite some time. For those looking to refinance their existing mortgage this may possibly be the perfect time secure a record-low rate.
30-Year Fixed Refinance Rates
Right now the average 30-year fixed refinance has an interest rate of 3.07%, a decrease of 5 basis points over the previous 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 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
Currently the average rate for a 15-year fixed refinance is 2.71%, a decrease of 2 basis point from a week ago.
Monthly payments on a 15-year refinance 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 2.58%, unmoved 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.
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 from across the nation supply information to Bankrate, which is provided in the table below:
|30-year fixed refi||3.07%||3.12%||-0.05|
|15-year fixed refi||2.71%||2.73%||-0.02|
|10-year fixed refi||2.58%||2.58%||N/C|
Rates as of November 7, 2020.
Is This the Right Time to Refinance?
In many cases, now is the right time to look into refinancing your existing mortgage. Over the last few months we’ve seen rates drop to record lows. Keep in mind, you will need a high credit score to qualify for these ultra-low rates. One thing to keep in mind is the Federal Housing Finance Agency has enacted a new 0.5% refinancing fee as of Dec. 1, 2020. This extra cost will apply to conventional refinance loans worth $125,000 or more. You’re likely to find many mortgage lenders that will price the addition fee into their loan offers in one way or another.
Current Refinance Rate Market
Lenders have been unusually busy with refinance loans because of the low interest rates. 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 types of refinance loans, 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 term. 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. The historically low interest rates that are currently available may allow you to take advantage of a shorter repayment term without increasing your monthly payments by an unreasonable amount. It just depends on how much you’re able to reduce your interest rate by.
If you have a home improvement project you’ve finally got the time to finish, you may be able to fund it with a cash-out refinance. A cash-out refinance enables you to convert the equity you’ve built up in your home into cash. You’ll be taking out a bigger mortgage, but with interest rates where they are, it can be a low-cost way to fund a costly home upgrade.
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 that the fees you’re paying comparable fees with each other.
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. To avoid unnecessary delays communicate with your lender and have the documentation you need ready to go ahead of time.
How We Got These Rates
The rates we have included are averages provided by Bankrate.com Site Averages 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.