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Several benchmark mortgage refinance rates trended down today.
The national averages for 30-year fixed and 15-year fixed refinances both slid down. Meanwhile, the average rate on 10-year fixed refis also slid lower.
Rates for refinancing are constantly changing, but, overall, they are very low by historical standards. If you’re in the market to refinance, it may make sense to go ahead and lock if you see a rate you like.
Compare refinance rates for a variety of loan types here.
30-year fixed refinance
The average 30-year fixed-refinance rate is 3.22 percent, down 19 basis points compared with a week ago. A month ago, the average rate on a 30-year fixed refinance was lower, at 3.16 percent.
At the current average rate, you’ll pay $433.56 per month in principal and interest for every $100,000 you borrow. That represents a decline of $10.48 over what it would have been last week.
You can use Bankrate’s mortgage calculator to estimate your monthly payments and see what the effects of making extra payments would be. It will also help you calculate how much interest you’ll pay over the life of the loan.
15-year fixed refinance
The average rate for a 15-year fixed refi is 2.75 percent, down 6 basis points since the same time last week.
Monthly payments on a 15-year fixed refinance at that rate will cost around $673 per $100,000 borrowed. The bigger payment may be a little harder to find room for in your monthly budget than a 30-year mortgage payment would, but it comes with some big advantages: You’ll come out thousands of dollars ahead over the life of the loan in total interest paid and build equity much more quickly.
10-year fixed refinance
The average rate for a 10-year fixed-refinance loan is 2.80 percent, down 8 basis points over the last week.
Monthly payments on a 10-year fixed-rate refi at 2.80 percent would cost $960.08 per month for every $100,000 you borrow. If you can manage that hefty monthly payment, you’ll enjoy even more interest cost savings than you would with a 15-year term.
Where rates are headed
To see where Bankrate’s panel of experts expect rates to go from here, check out our Rate Trend Index.
Want to see where rates are right now? Lenders nationwide respond to Bankrate’s weekday mortgage rates survey to bring you the most current rates available. Here you can see the latest marketplace average rates for a wide variety of purchase loans:
Rates as of August 20, 2020.
Want to see where rates are right now? See refinance rates for a variety of loan options here.
Lock your refi rate? How to decide
When you lock in a refinance rate, you freeze the rate your lender offers you for a specific period of time. A rate lock will secure that rate between the time you apply for the refinance and when you close on it.
What causes mortgage rates to change
Mortgage rates are influenced by a range of economic factors, from inflation to unemployment numbers. Typically, higher inflation means higher interest rates and vice versa. As inflation rises, the dollar loses value, which in turn drives off investors for mortgage-backed securities, causing the prices to fall and yields to climb. When yields climb, rates get more expensive for borrowers.
People typically buy more homes when the economy is strong, driving demand for mortgages. Increased demand can cause an increase in rates. Less demand can lead to lower rates.
What are current mortgage refinance rates?
Refinance rates have been volatile since the COVID-19 pandemic upended the U.S. economy, but overall they have been very low. Mortgage rates can rise and fall from week to week, but rates are consistently below 4 percent and even dipping into the mid to low 3s. This is an especially good time for people with good to excellent credit to lock in a low rate for a purchase loan. However, lenders are also raising credit standards for borrowers and demanding higher down payments as they try to dampen their risks.
Methodology: The rates you see above are Bankrate.com Site Averages. These calculations are run after the close of the previous business day and include rates and/or yields we have collected that day for a specific banking product. Bankrate.com site averages tend to be volatile — they help consumers see the movement of rates day to day. The institutions included in the “Bankrate.com Site Average” tables will be different from one day to the next, depending on which institutions’ rates we gather on a particular day for presentation on the site.
To learn more about the different rate averages Bankrate publishes, see “Understanding Bankrate’s Rate Averages.”
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August 21, 2020 at 06:32PM
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