Mortgage refinance rates were mixed, but one key rate declined.
The national average for a 30-year fixed-rate refinance trended down, but the average rate on a 15-year fixed cruised higher. Meanwhile, the average rate on 10-year fixed refis increased.
Refinancing rates change daily, but they have remained in a historically low range for quite some time. If you’re in the market to refinance, it could be a great time to lock in a rate.
30-year fixed refinance
The average 30-year fixed-refinance rate is 2.92 percent, down 1 basis point compared with a week ago. A month ago, the average rate on a 30-year fixed refinance was higher, at 3.16 percent.
At the current average rate, you’ll pay $417.30 per month in principal and interest for every $100,000 you borrow. That represents a decline of $0.54 over what it would have been last week.
You can use Bankrate’s mortgage calculator to figure out your monthly payments and find out how much you’ll save by adding extra payments. It will also help you calculate how much interest you’ll pay over the life of the loan.
15-year fixed refinance
The average for a 15-year refi is currently running at 2.51 percent, up 5 basis points since the same time last week.
Monthly payments on a 15-year fixed refinance at that rate will cost around $666 per $100,000 borrowed. Yes, that payment is much bigger than it would be on a 30-year mortgage, 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 rapidly.
10-year fixed refinance
The average rate for a 10-year fixed-refinance loan is 2.44 percent, up 2 basis points from a week ago.
Monthly payments on a 10-year fixed-rate refi at 2.44 percent would cost $939.07 per month for every $100,000 you borrow. That’s a lot more than the monthly payment on even a 15-year refinance, but in return you’ll pay even less in interest 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||2.92%||2.93%||-0.01|
|15-year fixed refi||2.51%||2.46%||+0.05|
|10-year fixed refi||2.44%||2.42%||+0.02|
Rates as of September 24, 2020.
Want to see where rates are right now? See refinance rates for a variety of loan options here.
How to decide whether to lock in your 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.
A strong economy usually means more people buying homes, which drives demand for mortgages. This increased demand can push rates higher. The opposite is also true; less demand can trigger a drop in rates.
Current refinance rate environment
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.”
Keep reading about other loan terms:
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|Loan Type||Purchase Rates||Refinance Rates|
|The chart above links out to loan-specific pagesto help our readers learn more about rates by mortgage type.|
|30-Year Loan||30 Year Fixed Mortgage Rates||30-Year Refinance Rates|
|20-Year Loan||20-Year Fixed Mortgage Rates||20-Year Refinance Rates|
|15-Year Loan||15 Year Fixed Mortgage Rates||Current 15-Year Refinance Rates|
|10-Year Loan||10-Year Mortgage Interest Rates||10-Year Refinance Rates|
|FHA Loan||FHA Loan Interest Rates||FHA Mortgage Refi Rates|
|VA Loan||VA Mortgage Rates||VA Refi Interest Rates|
|ARM Loan||ARM Loan Rates||ARM Refi Mortage Rates|
|Jumbo Loan||Current Jumbo Mortgage Rates||Jumbo Loan Refinance Rates|