Numerous benchmark refinance rates receded today. Both 15-year fixed and 30-year fixed refinances saw their average rates drop. In addition, the average rate on 10-year fixed refinances also slumped. Refinance interest rates are never set in stone -- but rates have been historically low. Because of this, right now is a good time for homeowners to get a good refinance rate. Before getting a refinance, remember to think about your personal needs and financial situation, and compare offers from different lenders to find the best one for you.
30-year fixed refinance rates
The average rate for a 30-year fixed refinance loan is currently 2.94%, a decrease of 6 basis points over this time last week. (A basis point is equivalent to 0.01%.) Refinancing to a 30-year fixed loan from a shorter loan term can lower your monthly payments. This makes 30-year refinances good for people who are having difficulties making their monthly payments or simply want a bit more breathing room. Be aware, though, that interest rates will typically be higher compared to a 15-year or 10-year refinance, and you'll pay off your loan at a slower rate.
15-year fixed-rate refinance
The current average interest rate for 15-year refinances is 2.24%, a decrease of 5 basis points over last week. A 15-year fixed refinance will most likely raise your monthly payment compared to a 30-year loan. On the other hand, you'll save money on interest, since you'll pay off the loan sooner. 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
The current average interest rate for a 10-year refinance is 2.27%, a decrease of 4 basis points from what we saw the previous week. A 10-year refinance will typically feature the highest monthly payment of all refinance terms, but the lowest interest rate. A 10-year refinance can help you pay off your house much quicker and save on interest. However, you should first analyze your budget and financial situation to make sure you'll be able to afford higher monthly payments.
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| Product | Rate | Last week | Change |
|---|---|---|---|
| 30-year fixed refi | 2.94% | 3.00% | -0.06 |
| 15-year fixed refi | 2.24% | 2.29% | -0.05 |
| 10-year fixed refi | 2.27% | 2.31% | -0.04 |
Rates as of Aug. 6, 2021.
How to find the best refinance rate
When searching for refinance rates online, it's important to remember that your specific financial situation will influence the rate you're offered. Though current market conditions will be a factor, your particular interest rate will depend largely on your application and credit history.
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. 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. You should also take into account any fees and closing costs that might offset the potential savings of a refinance.
Since the beginning of the pandemic, a lot of lenders have been stricter 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.
One way to get the best refinance rates is to strengthen your borrower application. The best ways to improve your credit ratings are to get your finances in order, use credit responsibly and monitor your credit regularly. You should also shop around multiple lenders and compare offers to make sure you're getting the best rate.
Is now a good time to refinance?
In order for a refinance to make sense, you'll generally want to get a lower interest rate than your current one. Aside from interest rates, changing your loan term is another reason to refinance. While interest rates have been low in the past few months, you should look at more than just the market interest rates when deciding if a refinance is right for you.
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? Also keep in mind that closing costs and other fees may require an upfront investment.
Some lenders have tightened requirements in recent months, so you may not be able to get a refinance at the posted rates -- or 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.
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August 06, 2021 at 08:00PM
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Current refinance rates on Aug. 6, 2021: Rates slide - CNET
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