We want to help you make more informed decisions. Some links on our site — clearly marked — will take you to a partner website and may result in us earning a referral commission. For more information, see How We Make Money.
Advertised & Editorial Rates: This table includes two types of listings: ads that we may be paid for (“advertiser listing”); and listings that we research and publish to provide a more holistic view of market rates (“editorial listings”). Here’s how to tell the difference: if you see a clickable button, such as a green “Next” button, that is an advertiser listing, and if you do not see a clickable button, it’s an editorial listing. For more information, see our Advertising Disclosure
Accuracy of Advertised Terms: Each advertiser is responsible for the accuracy and availability of its ad offer details. However, we attempt to verify those details through our quality control program. For more information, see our Quality Control Program.
Editorial Content: We include editorial content below the rate table to educate consumers about financial products and services. Some of that content may also contain ads, including links to advertisers’ sites, and we may be paid on those ads or links. For more information, see How We Make Money.
What Are Today’s Refinance Rates?
On Sunday, August 09, 2020 according to Bankrate’s latest survey of the nation’s largest mortgage lenders, the average 30-year fixed mortgage refinance rate is 3.130% with an APR of 3.330%. The average 15-year fixed mortgage refinance rate is 2.660% with an APR of 2.870. The average 5/1 adjustable-rate mortgage (ARM) refinance rate is 3.370% with an APR of 4.050%.
Current Mortgage and Refinance Rates
|30-Year Fixed Rate||3.130%||3.330%|
|30-Year FHA Rate||2.740%||3.500%|
|30-Year VA Rate||2.880%||3.120%|
|30-Year Fixed Jumbo Rate||3.180%||3.250%|
|20-Year Fixed Rate||3.080%||3.290%|
|15-Year Fixed Rate||2.660%||2.870%|
|15-Year Fixed Jumbo Rate||2.670%||2.720%|
|5/1 ARM Rate||3.370%||4.050%|
|5/1 ARM Jumbo Rate||3.450%||3.990%|
|7/1 ARM Rate||3.590%||4.040%|
|7/1 ARM Jumbo Rate||3.730%||4.060%|
|10/1 ARM Rate||3.620%||4.010%|
|30-Year Fixed Rate||3.060%||3.380%|
|30-Year FHA Rate||2.820%||3.560%|
|30-Year VA Rate||2.820%||3.070%|
|30-Year Fixed Jumbo Rate||3.100%||3.220%|
|20-Year Fixed Rate||3.070%||3.320%|
|15-Year Fixed Rate||2.630%||2.970%|
|15-Year Fixed Jumbo Rate||2.670%||2.740%|
|5/1 ARM Rate||3.280%||4.030%|
|5/1 ARM Jumbo Rate||3.380%||3.950%|
|7/1 ARM Rate||3.360%||3.940%|
|7/1 ARM Jumbo Rate||3.450%||3.910%|
|10/1 ARM Rate||3.570%||4.030%|
Rates as of Sunday, August 09, 2020
These refinance rate averages are based on weekday mortgage rate information provided by national lenders to Bankrate.com. These marketplace average rates for a variety of refinance loan types are updated daily, though it is possible rates have changed since this was last updated.
What is a Mortgage Refinance?
A mortgage refinance involves taking out a new loan to pay off your current mortgage.
Refinancing your mortgage can help you in a number of ways. The biggest is the potential to save money by lowering your monthly mortgage payment, locking in a lower interest rate, adjusting the length of your loan, or getting rid of private mortgage insurance. You also might want to refinance to cash out some of your home equity and pay for home renovations or other expenses.
The process is similar to taking out an original home mortgage, so you should prepare in the same way. Before you apply, research your best options and organize all the financial documents you’ll need. You’ll want to shop around for the best refinance rates and loan terms.
When Should You Refinance?
Whether or not you should refinance your existing home depends a lot on current refinance rates and how they compare to your existing mortgage. When you refinance, you can expect to pay 3%-6% of the new loan amount upfront in closing costs (or, that figure can be added directly to your new loan). With that in mind, crunch the numbers to ensure you’ll be saving over the life of the loan. If you aren’t planning on staying in your current home for the long term, then you may not have enough time to recoup the costs.
Refinancing is an opportunity to lower your monthly payment and create some room in your monthly budget. The best way to do this is by scoring a significantly lower interest rate. You could also create short-term savings by choosing a new loan with a longer term, such as trading a 15-year mortgage for a 30-year mortgage. In that case, the tradeoff is that you’ll end up paying more interest over the life of the loan. So you’ll have to balance your priorities.
Is Now a Good Time to Refinance?
Refinance rates are as low as they’ve been in years, so this can be an excellent time to refinance your mortgage—if you meet certain criteria. While it’s important to factor in the thousands of dollars you’ll pay in closing costs when you’re running the number, reducing your monthly payment and paying off your mortgage much sooner can make the short-term costs well worth it over time.
However, this isn’t the case for everyone, because the lowest interest rates are only available to those with the best credit. Not only that, but lenders have tightened their standards recently, and if you don’t have a secure source of income you may not be able to qualify for a refinance. So while this is an excellent time for many to consider a mortgage refinance, it doesn’t make sense for everyone.
Finding the Best Refinance Rate
Shop around to find the best mortgage refinance rates—and know your personal financial situation will impact your rates. If you have a high credit score, you can qualify for the best refinance rates. The best way to improve your credit is to take a long-term approach by paying down debt and paying your bills on time.
You may also be able to get better refinances rates on shorter loans. So taking out a 10- or 15-year mortgage will save you on interest over the life of the loan compared to a 30-year refinance, though you’ll have higher monthly payments.
Can You Negotiate Refinance Rates?
Refinance rates aren’t exactly the kind of thing you can negotiate, but you can shop around. Getting loan estimates from 2-3 different lenders allows you to compare rates and fees against one another to get the best rate you can.
When comparing offers, make sure you look at the difference between the interest rate and the APR (annual percentage rate). The interest rate is what you’ll pay on the principal loan, while the APR includes the interest rate, other mortgage fees, and some closing costs. When looking at APRs, ask the lender what fees are included in the APR calculation so you can be sure you’re comparing apples to apples.
Types of Refinancing
Most refinancing falls under the “rate and term” category. With this type of refinance, you’re replacing your existing loan with one that has a more favorable interest rate or loan terms.
A “cash-out” refinance is used to turn your home’s value into cash. For example, if you had a $50,000 mortgage and your home is worth $100,000, you could refinance for $80,000 and pocket the extra $30,000. This could give you an opportunity to make improvements that increase the value of your home, assuming you’re financially secure enough to take on the increased debt.
Another type of refinance is a “cash-in” refinance, where you can pay down your loan as part of the refinance to get a smaller monthly payment. Increasing your equity, or decreasing your principal balance relative to the value of your house, could also help you drop private mortgage insurance payments.
How to Refinance
Once you’ve found the best refinance rates and terms for your situation, it’s time to close on the loan. The process of refinancing is similar to getting a mortgage when you first purchase a home, so you’ll follow many of the same steps.
When you refinance a mortgage you will be on the hook for closing costs, but you won’t have to pay what is generally the biggest out-of-pocket expense on a mortgage – a down payment.
What Will You Need to Refinance
Getting all your paperwork in order before submitting a refinance application is a good way to make the closing process go more smoothly. Your lender should have a checklist for you, and it will include documents such as:
- Proof of income: Your most recent pay stubs, W-2s, 1099s, or tax returns from up to the past two years are required to verify your income and employment status.
- Proof of assets: Gather your most recent statements for bank accounts, retirement plans, and other investments.
- Documentation of current debt: You will need account statements for your current home loan, credit cards, and any other loans you have, like student loans or auto loans.
- Appraisal: Just like when you got your original mortgage, the bank will require you to have an appraisal done on the property to verify its current value.
- Insurance: You will need proof of homeowners and title insurance.
You may also need additional documentation for any alimony or child support you receive or are required to pay. And if you have a large gap in employment or negative marks on your credit report, the lender may require a letter from you explaining those circumstances. Also, given the current economic environment, lenders are vetting applicants more closely. You should expect them to verify your employment up to the day of closing, and if closing takes longer than expected you may need to resubmit your most recent documentation.