Multiple closely watched mortgage refinance rates ticked downward today.
The average for a 30-year fixed-rate refinance decreased, but the average rate on a 15-year fixed refinance held steady. Meanwhile, the average rate on 10-year fixed refis decreased.
Rates for refinancing 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 make sense to lock if you see a rate you like.
30-year fixed refinance
The average 30-year fixed-refinance rate is 3.18 percent, down 8 basis points since the same time last week. A month ago, the average rate on a 30-year fixed refinance was higher, at 3.45 percent.
At the current average rate, you’ll pay $431.37 per month in principal and interest for every $100,000 you borrow. That’s a decline of $4.39 from last week.
You can use Bankrate’s mortgage calculator to get a handle on what your monthly payments would be 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 2.75 percent, unchanged over the last seven days.
Monthly payments on a 15-year fixed refinance at that rate will cost around $677 per $100,000 borrowed. That may put more pressure on your monthly budget than a 30-year mortgage would, 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 2.81 percent, down 1 basis points over the last week.
Monthly payments on a 10-year fixed-rate refi at 2.81 percent would cost $957.32 per month for every $100,000 you borrow. That hard-to-swallow 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||3.18%||3.26%||-0.08|
|15-year fixed refi||2.75%||2.75%||N/C|
|10-year fixed refi||2.81%||2.82%||-0.01|
Rates as of July 15, 2020.
Want to see where rates are right now? See refinance rates for a variety of loan options here.
When to lock a mortgage refinance rate
A rate lock allows you to freeze the interest rate your lender extends to you for a specified period of time. Between the time you apply for a mortgage refinance and close on it, the rate lock will protect you from rising rates.
Why mortgage refinance rates change
Economic factors such as inflation and unemployment can impact refinance rates. Generally, higher inflation leads to higher interest rates. The opposite is true; lower inflation typically leads to lower refinance rates. The dollar loses value when inflation rises. That, in turn, drives investors away from mortgage-backed securities (MBS), causing the prices to decrease and yields to increase. When yields move higher, refinance rates get more expensive.
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 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 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 mortgage type.|
|30-Year Loan||Current 30 Year Mortgage Rates||30-Year Refinance Rates|
|20-Year Loan||20-Year Fixed Mortgage Rates||20-Year Refinance Interest Rates|
|15-Year Loan||Today’s 15-Year Mortgage Rates||Current 15-Year Refinance Rates|
|10-Year Loan||10-Year Mortgage Interest Rates||10-Year Mortgage Refinance Rates|
|FHA Loan||FHA Mortgage Interest Rates||FHA Refinance Interest Rates|
|VA Loan||VA Loan Rates||VA Refinance Loan Rates|
|ARM Loan||Adjustable Rate Mortgage Rates||ARM Refinance Interest Rates|
|Jumbo Loan||Jumbo Loan Interest Rates||Jumbo Mortgage Refinance Rates|