Both 15-year fixed and 30-year fixed refinances saw their average rates increase this week. The average rate on 10-year fixed refinance also inched up.
- 30-year fixed refinance: 7.21%
- 15-year fixed refinance: 6.56%
- 10-year fixed refinance: 6.43%
Despite ticking up in recent weeks, refinance rates have been slowly dropping from their peaks in 2023, bringing much-needed activity to the housing market. Experts say slowing inflation and the Federal Reserve’s projected interest rate cuts should help push mortgage interest rates down to around 6% by the end of 2024.
Over 82% of homeowners currently have interest rates below 5% on their property. If home loan rates stabilize over the next several months, more homeowners should be able to save money through refinancing. But in order for refinance applications to pick up in a meaningful way, rates would need to fall substantially, according to Mark Zandi, chief economist at Moody’s Analytics.
Mortgage refinance rates change every day. Experts recommend shopping around to make sure you’re getting the lowest rate. By entering your information below, you can get a custom quote from one of CNET’s partner lenders.
About these rates: Like CNET, Bankrate is owned by Red Ventures. This tool features partner rates from lenders that you can use when comparing multiple mortgage rates.
Current mortgage refinance rates
Refinance rates are currently between 6% and 7%, but your personal interest rate will depend on your credit history, financial profile and application.
Here are the average refinance rates reported by lenders nationwide. We track refinance rate trends using data collected by Bankrate:
Today’s refinance rates
Product | Rate | A week ago | Change |
---|---|---|---|
30-year fixed refi | 7.21% | 7.03% | +0.18 |
15-year fixed refi | 6.56% | 6.22% | +0.34 |
10-year fixed refi | 6.43% | 6.04% | +0.39 |
Rates as of Feb. 9, 2024
Where will refinance rates end up in 2024?
When mortgage rates hit historic lows during the pandemic, millions of homeowners were able to refinance to lower interest rates. While experts don’t anticipate another refinancing boom, it’s a positive sign that rates are now tending to move downward or sideways instead of soaring up.
For homeowners looking to refinance, remember that you can’t time the market: Interest rates fluctuate on an hourly, daily and weekly basis, and are influenced by an array of macroeconomic factors. Your best move is to keep an eye on day-to-day rate changes and have a game plan on how to capitalize on a big enough percentage drop, said Matt Graham of Mortgage News Daily.
What to know about refinancing
When you refinance your mortgage, you take out another home loan that pays off your initial mortgage. With a traditional refinance, your new home loan will have a different term and/or interest rate. With a cash-out refinance, you’ll tap into your equity with a new loan that’s bigger than your existing mortgage balance, allowing you to pocket the difference in cash.
Refinancing can be a great financial move if you score a low rate or can pay off your home loan in less time, but consider whether it’s the right choice for you. Reducing your interest rate by 1% or more is an incentive to refinance, allowing you to cut your monthly payment significantly.
Refinancing in today’s market could make sense if you have a rate above 8%, said Logan Mohtashami, lead analyst at HousingWire. “However, with all refinancing options, it’s a personal financial choice because of the cost that goes with the loan process,” Mohtashami said.
Reasons to refinance
Homeowners usually refinance to save money, but there are other reasons to do so. Here are the most common reasons homeowners refinance:
- To get a lower interest rate: If you can secure a rate that’s at least 1% lower than the one on your current mortgage, it could make sense to refinance.
- To switch the type of mortgage: If you have an adjustable-rate mortgage and want greater security, you could refinance to a fixed-rate mortgage.
- To eliminate mortgage insurance: If you have an FHA loan that requires mortgage insurance, you can refinance to a conventional loan once you have 20% equity.
- To change the length of a loan term: Refinancing to a longer loan term could lower your monthly payment. Refinancing to a shorter term will save you interest in the long run.
- To tap into your equity through a cash-out refinance: If you replace your mortgage with a larger loan, you can receive the difference in cash to cover a large expense.
- To take someone off the mortgage: In case of divorce, you can apply for a new home loan in just your name and use the funds to pay off your existing mortgage.
How to shop for refinance rates
The rates advertised online often require specific conditions for eligibility. Your personal interest rate will be influenced by market conditions as well as your specific credit history, financial profile and application. Having a high credit score, a low credit utilization ratio and a history of consistent and on-time payments will generally help you get the best interest rates.
30-year fixed-rate refinance
The average 30-year fixed refinance rate right now is 7.21%, an increase of 18 basis points over this time last week. (A basis point is equivalent to 0.01%.) A 30-year fixed refinance will typically have lower monthly payments than a 15-year or 10-year refinance, but it will take you longer to pay off and typically cost you more in interest over the long term.
15-year fixed-rate refinance
The current average interest rate for 15-year refinances is 6.56%, an increase of 34 basis points compared to one week ago. Though a 15-year fixed refinance will most likely raise your monthly payment compared to a 30-year loan, you’ll save more money over time because you’re paying off your loan quicker. Also, 15-year refinance rates are typically lower than 30-year refinance rates, which will help you save more in the long run.
10-year fixed-rate refinance
For 10-year fixed refinances, the average rate is currently at 6.43%, an increase of 39 basis points from what we saw the previous week. A 10-year refinance typically has the lowest interest rate but the highest monthly payment of all refinance terms. A 10-year refinance can help you pay off your house much quicker and save on interest, but make sure you can afford the steeper monthly payment.
To get the best refinance rates, make your application as strong as possible by getting your finances in order, using credit responsibly and monitoring your credit regularly. And don’t forget to speak with multiple lenders and shop around.
Source: cnet.com