A number of mortgage refinance rates ticked up today: both 10- and 30-year fixed-rate refinances, specifically. At the same time, average rates for 15-year fixed refinances didn’t change. Refinance interest rates are never set in stone, but rates have been the lowest they’ve been in years. If you plan to refinance your house, now might be a good time to get a good rate. Before refinancing, remember to consider your personal needs and financial situation, and shop around for different lenders to find the best one for you.
30-year fixed-rate refinance
The current average interest rate for a 30-year refinance is 3.24%, an increase of 4 basis points over this time last week. (A basis point is equivalent to 0.01%.) One reason to refinance to a 30-year fixed loan from a shorter loan term is to lower your monthly payment. This makes 30-year refinances good for people who are having difficulties making their monthly payments or simply want a bit more breathing room. However, interest rates for a 30-year refinance will typically be higher than rates for a 15-year or 10-year refinance. It’ll also take you longer to pay off your loan.
15-year fixed-rate refinance
The average rate for a 15-year fixed refinance loan is currently 2.51%, unmoved over last week. A 15-year fixed refinance will most likely raise your monthly payment compared to a 30-year loan. However, you’ll also be able to pay off your loan quicker, saving you money over the life of the loan. Interest rates for a 15-year refinance also tend to be lower than that of a 30-year refinance, so you’ll save even more in the long run.
10-year fixed-rate refinance
For 10-year fixed refinances, the average rate is currently at 2.50%, an increase of 1 basis point from what we saw the previous week. You’ll pay more every month with a ten-year fixed refinance compared to a 30-year or 15-year refinance — but you’ll also have a lower interest rate. A 10-year refinance can be a good deal, since paying off your house sooner will help you save on interest in the long run. 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 country:
Average refinance interest rates
|Product||Rate||A week ago||Change|
|30-year fixed refi||3.24%||3.20%||+0.04|
|15-year fixed refi||2.51%||2.51%||N/C|
|10-year fixed refi||2.50%||2.49%||+0.01|
Rates as of Dec. 10, 2021.
How to find the best refinance rate
It’s important to understand that the rates advertised online may not apply to you. Your interest rate will be influenced by market conditions as well as your credit history and application.
Having a high credit score, low credit utilization ratio, and a history of consistent and on-time payments will generally help you get the best interest rates. Researching interest rates online is always a good idea, but you’ll need to connect with a mortgage professional to get your exact refinance rate. Also remember to account for potential fees and closing costs.
Since the beginning of the pandemic, a lot of lenders have been stricter with who they approve for a loan. As such, you may not qualify for a refinance — or a low rate — if you don’t have a solid credit rating.
To get the best refinance rates, you’ll first want to make your application as strong as possible. You can do that by monitoring your credit, taking on debt responsibly, and getting your finances in order before applying for a refinance. Also be sure to compare offers from multiple lenders in order to get the best rate.
Is now a good time to 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.
To decide whether a refinance is right for you, consider all of the factors including how long you plan to stay in your current home, the length of your loan term and the amount of your monthly payment. Also keep in mind that closing costs and other fees may require an upfront investment.
Note that some lenders have tightened their requirements since the beginning of the pandemic. If you don’t have a solid credit score, you may not qualify for the best rate. Refinancing at a lower interest rate can save you money in the long run and help you pay off your loan sooner. But a careful cost-benefit analysis is necessary to confirm that doing so makes sense.