Several closely watched mortgage refinance rates dropped today.
The national averages for 30-year fixed and 15-year fixed refinances both ticked downward. The average rate on 10-year fixed refis, meanwhile, also declined.
Rates for refinancing are constantly changing, but they continue to represent a bargain compared to rates before the Great Recession. If you’re in the market to refinance, it may make sense to lock if you see a rate you like.
30-year fixed refinance
The average 30-year fixed-refinance rate is 3.16 percent, down 6 basis points from a week ago. A month ago, the average rate on a 30-year fixed refinance was higher, at 3.36 percent.
At the current average rate, you’ll pay $430.28 per month in principal and interest for every $100,000 you borrow. That’s $3.28 lower, compared with last week.
You can use Bankrate’s mortgage calculator to get a handle on what your monthly payments would be 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 2.74 percent, down 3 basis points over the last week.
Monthly payments on a 15-year fixed refinance at that rate will cost around $677 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 faster.
10-year fixed refinance
The average rate for a 10-year fixed-refinance loan is 2.77 percent, down 2 basis points over the last week.
Monthly payments on a 10-year fixed-rate refi at 2.77 percent would cost $955.94 per month for every $100,000 you borrow. That hefty monthly payment comes with the benefit of paying even less interest over the life of the loan 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 Bankrateâ€™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:
|30-year fixed refi||3.16%||3.22%||-0.06|
|15-year fixed refi||2.74%||2.77%||-0.03|
|10-year fixed refi||2.77%||2.79%||-0.02|
Rates as of July 23, 2020.
Want to see where rates are right now? See refinance rates for a variety of loan options here.
Should you lock a mortgage refinance rate?
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.
Current refinance rate landscape
Refinance rates have been volatile since the COVID-19 pandemic upended the U.S. economy, but overall they have been very low. Mortgage rates are rising and falling from week to week, as lenders are inundated with forbearance and refinance requests. In general, however, 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.”
|Product||Purchase Rates||Refinance Rates|
|The table above links out to loan-specific content to help you learn more about rates by loan type.|
|30-Year Loan||Today’s 30-Year Mortgage Rates||Current 30 Year Refinance Rates|
|20-Year Loan||20-Year Mortgage Interest Rates||20-Year Mortgage Refinance Rates|
|15-Year Loan||15 Year Fixed Mortgage Rates||15-Year Refinance Rates|
|10-Year Loan||10-Year Fixed Mortgage Rates||Current 10-Year Refinance Rates|
|FHA Loan||FHA Mortgage Rates||Current FHA Loan Refinance Rates|
|VA Loan||VA Loan Interest Rates||Current VA Refinance Rates|
|ARM Loan||Adjustable Rate Mortgage Rates||ARM Refi Mortage Rates|
|Jumbo Loan||Jumbo Loan Interest Rates||Jumbo Refinance Rates|