Refinance rates for Aug. 16, 2021: Rates mixed

0
104

Jb Reed/Getty Images

Key benchmark mortgage refinance rates held steady today. We saw 15-year fixed refinance rates trail off, while nationwide rate averages for 30-year fixed refinances remained unaltered. In addition, the average rate on 10-year fixed refinances stayed the same. Refinance interest rates are never set in stone — but rates have been at historic lows. 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 one who can best meet your needs.

30-year fixed refinance rates

The current average interest rate for a 30-year refinance is 3.04%, unmoved compared to one week ago. (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. 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 2.31%, a decrease of 3 basis points compared to one week ago. Refinancing to a 15-year fixed loan from a 30-year fixed loan will likely raise your monthly payment. But you’ll save more money over time, because you’re paying off your loan quicker. Fifteen-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 current average interest rate for a 10-year refinance is 2.33%, unmoved over last 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 faster and save on interest in the long run. Just be sure to carefully consider your budget and current financial situation to make sure that you can afford a 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 supplied by lenders nationwide:

Average refinance interest rates

Product Rate A week ago Change
30-year fixed refi 3.04% 3.04% N/C
15-year fixed refi 2.31% 2.34% -0.03
10-year fixed refi 2.33% 2.33% N/C

Rates as of Aug. 16, 2021.

How to shop for refinance rates

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, a 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. You should also take into account any fees and closing costs that might offset the potential savings of a refinance.

You should also know that many lenders have had stricter requirements when it comes to approving loans in the past few months. 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.

When to consider a mortgage refinance

Most people refinance because the market interest rates are lower than their current rates or because they want to change their 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 at play, including how long you plan to stay in your current home, the length of your loan term and the amount of your monthly payment. 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 can be a great move if you get a good rate or can pay off your loan sooner — but consider carefully whether it’s the right choice for you.

Source