In general, refinance rates for mortgages varied, with one notable rate moving higher. The national rate average for a 15-year fixed refinance did not change, while 30-year fixed-rate refinances moved up. In addition, the average rate on 10-year fixed refinance shrank. Although refinance rates are always changing, they have been quite low recently. Because of this, right now is an optimal time for homeowners to lock in a good refinance rate. But as always, make sure to first take into account your personal goals and circumstances before getting a refinance, and talk to multiple lenders to find a lender who can best meet your needs.
30-year fixed refinance rates
The average rate for a 30-year fixed refinance loan is currently 3.14%, an increase of 1 basis point 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. If you’re having difficulties making your monthly payments currently, a 30-year refinance could be a good option for you. 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 2.42%, unmoved from what we saw the previous week. Refinancing to a 15-year fixed loan from a 30-year fixed loan will likely raise your monthly payment. On the other hand, you’ll save money on interest, since you’ll pay off the loan sooner. 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 rate for a 10-year fixed refinance loan is currently 2.42%, a decrease of 1 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 higher monthly payment. 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 data collected by Bankrate, which is owned by CNET’s parent company. Here’s a table with the average refinance rates supplied by lenders nationwide:
Average refinance interest rates
|30-year fixed refi||3.14%||3.13%||+0.01|
|15-year fixed refi||2.42%||2.42%||N/C|
|10-year fixed refi||2.42%||2.43%||-0.01|
Rates as of June 1, 2021.
How to shop for refinance rates
When looking for refinance rates, know that your specific rate may differ from those advertised online. Market conditions aren’t the only factor in interest rates; your particular application and credit history will also play a large role.
To get the best interest rates, you’ll typically need a high credit score, low credit utilization ratio, and a history of making consistent and on-time payments. To get your personalized refinance rates, you’ll need to speak with a mortgage professional, as the rates you qualify for may differ from the rates advertised online. 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. If you have a low credit score or a poor credit history, you might have trouble getting a refinance at the lowest interest rates.
One way to get the best refinance rates is to strengthen your borrower application. If you haven’t already, try to improve your credit by monitoring your credit reports, using credit responsibly, and managing your finances carefully. 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.
A refinance may not always make financial sense. Consider your personal goals and financial circumstances. How long do you plan on staying in your home? Are you refinancing to decrease your monthly payment, pay off your house sooner — or for a combination of reasons? And don’t forget about fees and closing costs, which can add up.
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.
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