Multiple closely watched mortgage refinance rates dropped today.
The average rates for 30-year fixed and 15-year fixed refinances both receded. The average rate on 10-year fixed refi, meanwhile, also sunk lower.
Rates for refinancing are in a constant state of flux, 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 go ahead and lock if you see a rate you like.
30-year fixed refinance
The average 30-year fixed-refinance rate is 3.06 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 $424.85 per month in principal and interest for every $100,000 you borrow. That’s a decline of $0.54 from 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 2.57 percent, down 14 basis points over the last seven days.
Monthly payments on a 15-year fixed refinance at that rate will cost around $666 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 more rapidly.
10-year fixed refinance
The average rate for a 10-year fixed-refinance loan is 2.56 percent, down 2 basis points over the last seven days.
Monthly payments on a 10-year fixed-rate refi at 2.56 percent would cost $946.34 per month for every $100,000 you borrow. That whopper of a 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 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 national average rates for a wide variety of refinance loans:
|30-year fixed refi||3.06%||3.07%||-0.01|
|15-year fixed refi||2.57%||2.71%||-0.14|
|10-year fixed refi||2.56%||2.58%||-0.02|
Rates as of November 13, 2020.
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 rates have 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. Remember: The Federal Housing Finance Agency will institute a new refinancing fee of 0.5 percent on all loans worth $125,000 or more. That fee goes into effect Dec. 1, but many mortgage lenders are already pricing the fee into their loan offers.
Current refinance rate environment
Thanks to low interest rates, the past few months have been very busy for refinancing. 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 change typically means you’re securing a lower interest rate than what you’re paying on your existing mortgage. A term change means you’re changing the period of time it takes to pay off the loan. Sometimes you can change both the rate and term when you refinance. 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. With mortgage rates at historic lows, you may be able to shorten the length of your loan and still keep your monthly payments the same — or even make them lower.
A cash-out refinance is a way to borrow against the equity you’ve built up in your home. It will make your mortgage bigger, but it can be a cost-effective way to finance big projects like home renovations, because mortgage interest rates are still much lower than those on personal loans or credit cards.
How to refinance
The most important step to find a competitive refinance offer is to shop around. 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.”
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|Product||Purchase Rates||Refinance Rates|
|The index above links out to loan-specific content to help you learn more about rates by loan type.|
|30-Year Loan||30 Year Fixed Mortgage Rates||30-Year Mortgage Refinance Rates|
|20-Year Loan||20-Year Mortgage Rates||20-Year Refinance Rates|
|15-Year Loan||15 Year Fixed Mortgage Rates||15-Year Mortgage Refinance Rates|
|10-Year Loan||10-Year Mortgage Rates||10-Year Refi Interest Rates|
|FHA Loan||FHA Mortgage Interest Rates||FHA Refinance Rates|
|VA Loan||Current VA Mortgage Rates||VA Refinance Rates|
|ARM Loan||Adjustable Rate Mortgage Rates||ARM Refinance Interest Rates|
|Jumbo Loan||Jumbo Mortgage Rates||Current Jumbo Refinance Rates|