Multiple key mortgage refinance rates floated higher today.
Average rates nationwide on 30-year fixed and 15-year fixed refinances both were higher. Meanwhile, the average rate on 10-year fixed refi also increased.
Rates for refinancing change daily, but they remain much lower overall than they were 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 2.94 percent, up 4 basis points since the same time last week. A month ago, the average rate on a 30-year fixed refinance was lower, at 2.91 percent.
At the current average rate, you’ll pay $418.37 per month in principal and interest for every $100,000 you borrow. Compared with last week, that’s $2.14 higher.
You can use Bankrate’s mortgage calculator to estimate your monthly payments and see 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 15-year fixed refi average rate is now 2.39 percent, up 2 basis point since the same time last week.
Monthly payments on a 15-year fixed refinance at that rate will cost around $660 per $100,000 borrowed. That’s obviously much higher than the monthly payment would be on a 30-year mortgage at that rate, but it comes with some big advantages: You’ll save thousands of dollars 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 2.41 percent, up 3 basis points over the last seven days.
Monthly payments on a 10-year fixed-rate refi at 2.41 percent would cost $937.25 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, a weekly poll of mortgage experts.
Want to see today’s average rates? Lenders nationwide respond to Bankrate’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 refinance loans:
|Product||Rate||A week ago||Change|
|30-year fixed refi||2.94%||2.90%||+0.04|
|15-year fixed refi||2.39%||2.37%||+0.02|
|10-year fixed refi||2.41%||2.38%||+0.03|
Rates as of January 8, 2021.
Want to see where rates are right now? See refinance rates for a variety of loan options here.
Is now a good time to refinance?
Generally speaking, yes, now is a good time to refinance. Mortgage rateshave regularly hit record lows over the past few months. Though rates can rise and fall from one week to the next, they have been around 3 percent over time, with some surveys showing them in the 2s. If you’re a homeowner and have good or excellent credit, you should consider refinancing. Note that the Federal Housing Finance Agency will begin charging a 0.5 percent refinance fee on all loans worth $125,000 or more on starting Dec. 1. Many mortgage lenders are already pricing the fee into their loan offers.
Current refinance rate landscape
The past few months have been extremely busy for refinancing because of low interest rates. It can still be a smart move for many borrowers to refinance, but be ready to wait longer than normal to close on the loan. Also be aware that some lenders may be tightening standards, so it may be harder to secure a refinancing offer if your credit isn’t in good shape, or if you’ve had a recent change in your employment.
When you should refinance
There are lots of reasons to refinance, but two major drivers are changing the rate or term of your mortgage to save money, or a cash-out refinance to fund other projects.
A rate/term change usually means you’re securing a lower interest rate than what you’re paying on your existing mortgage, or that you’re changing the period of time to pay off the loan — or both. Securing a lower interest rate means you’ll have lower monthly payments and pay less interest over the remaining life of your loan. Changing the length of time you’ll take to pay off your mortgage can save you money in a few ways: if you lengthen the term, you’ll have lower monthly payments. If you shorten the term, your monthly payments may go up, but you’ll pay less interest over the life of the loan. Because interest rates are so low right now, you may be able to shorten your loan term and keep your monthly payments the same, or even make them lower.
With a cash-out refinance, you borrow against the equity you’ve built in your home. It will make your mortgage bigger, but it can be a cost-effective way to finance big projects (think home renovations or repairs) because mortgage rates are much lower than rates on personal loans and credit cards.
How to refinance
Shopping around is the most important thing you can do. Just like with securing a purchase mortgage, you want to make sure you’re getting the best offer. That means you can go to your current lender to see what they’re willing to do for you, but you should also be open to finding a new institution. Compare all the terms that various lenders are offering you, and see what makes the most sense in your own situation. Sometimes, for example, you may trade a slightly higher interest rate for other conveniences a particular lender may be able to offer you.
What you’ll need to refinance
Refinancing can be a big undertaking. Your lender will do a credit check, and usually requires a lot of documents from pay stubs and tax returns to bank and other financial statements.
It’s best to get all your possible supporting documents in order ahead of time, so you’re ready to send things off when the bank requests them.
And, start doing your calisthenics. Just like with a purchase closing, you’ll have to sign a lot of documents to secure your new loan.
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.”
News articles about other loan terms:
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|Product||Purchase Rates||Refinance Rates|
|The index above links out to loan-specific content to help our readers learn more about rates by mortgage type.|
|30-Year Loan||30 Year Fixed Mortgage Rates||Current 30 Year Refinance Rates|
|20-Year Loan||Current 20 Year Mortgage Rates||20-Year Refinance Interest Rates|
|15-Year Loan||15-Year Mortgage Interest Rates||15-Year Refi Interest Rates|
|10-Year Loan||10-Year Mortgage Rates||10-Year Refi Interest Rates|
|FHA Loan||FHA Loan Interest Rates||FHA Mortgage Refi Rates|
|VA Loan||VA Mortgage Interest Rates||VA Refinance Loan Rates|
|ARM Loan||ARM Mortgage Rates||ARM Refinance Rates|
|Jumbo Loan||Jumbo Loan Rates||Jumbo Loan Refinance Rates|