Several closely followed mortgage refinance rates went up today. Both 15-year fixed and 30-year fixed refinances saw their mean rates increase. At the same time, average rates for 10-year fixed refinances also made gains. Refinance interest rates are never set in stone -- but rates have been historically low of late. Because of this, right now is a great time for homeowners to secure a good refinance rate. But as always, make sure to first take into account your personal goals and circumstances before getting a refinance, and compare offers to find a lender who can best meet your needs.
30-year fixed refinance rates
For 30-year fixed refinances, the average rate is currently at 3.25%, an increase of 13 basis points compared to one week ago. (A basis point is equivalent to 0.01%.) A 30-year fixed refinance will typically have lower monthly payments than a 15- or 10-year refinance. This makes 30-year refinances good for people who are having difficulties making their monthly payments or simply want a bit more breathing room. In exchange for the lower monthly payments though, rates for a 30-year refinance will typically be higher than 15- and 10-year refinance rates. You'll also pay off your loan more slowly.
15-year fixed-rate refinance
The current average interest rate for 15-year refinances is 2.54%, an increase of 16 basis points over last week. Refinancing to a 15-year fixed loan from a 30-year fixed loan will likely raise your monthly payment. However, you'll also be able to pay off your loan quicker, saving you money over the life of the loan. 15-year refinance rates are typically lower than 30-year refinance rates, which will help you save even more in the long run.
10-year fixed-rate refinance
The average 10-year fixed refinance rate right now is 2.58%, an increase of 20 basis points compared to one week ago. Compared to a 30-year and 15-year refinance, a 10-year refinance will usually have a lower interest rate but a higher monthly payment. A 10-year refinance can help you pay off your house much quicker and save on interest. However, you should analyze your budget and current financial situation to make sure you'll be able to afford the higher monthly payment.
Where rates are headed
We track refinance rate trends using information collected by Bankrate, which is owned by CNET's parent company. Here's a table with the average refinance rates reported by lenders across the US:
Average refinance interest rates
|30-year fixed refi||3.25%||3.12%||+0.13|
|15-year fixed refi||2.54%||2.38%||+0.16|
|10-year fixed refi||2.58%||2.38%||+0.20|
Rates as of June 23, 2021.
How to find the best refinance rate
It's important to understand that the rates advertised online may not apply to you. Though current market conditions will be a factor, your particular interest rate will depend largely on your application and credit history.
Generally, you'll want a high credit score, low credit utilization ratio, and a history of making consistent and on-time payments in order to get the best interest rates. You can generally get a good feel for average interest rates online, but make sure to speak with a mortgage professional in order to see the specific rates you qualify for. And don't forget about fees and closing costs, which may cost a hefty amount upfront.
It's also worth noting that in recent months, lenders have been stricter with their requirements. As such, you may not qualify for a refinance -- or a low rate -- if you don't have a solid credit rating.
One way to get the best refinance rates is to strengthen your borrower application. You can do that by monitoring your credit, taking on debt responsibly, and getting your finances in order before applying for a refinance. You should also shop around with multiple lenders and compare offers to make sure you're getting the best rate.
When should I refinance?
Generally, it's a good idea to refinance if you can get a lower interest rate than that your current interest rate, or if you need to change your loan term. Interest rates in the past few months have been at historic lows, but that's not the only thing you should be looking at when deciding whether to refinance.
Make sure to consider your goals and financial situation, including how long you plan to stay in your current home. It's helpful to have a specific goal for a refinance -- such as decreasing your monthly payment or adjusting the term of your loan. Also keep in mind that closing costs and other fees may require an upfront investment.
Some lenders have tightened their requirements in recent months, so you may not be able to get a refinance at the posted interest rates -- or even a refinance at all -- if you don't meet their standards. If you can get a lower interest rate or pay off your loan sooner, refinancing can be a great move. But carefully weigh the pros and cons first to make sure it's a good fit for your situation.