Refi Rates Today, October 15, 2020 | Rate ratchets higher

Daily Refinance blog

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Mortgage refinance rates were mixed, but one key rate trended upward.

The average rate nationwide for a 30-year fixed-rate refinance floated higher, but the average rate on a 15-year fixed declined. The average rate on 10-year fixed refis, meanwhile, tapered off.

Refinancing rates change daily, 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.

Compare refinancing rates in your area now.

30-year fixed refinance

The average 30-year fixed-refinance rate is 3.13 percent, up 2 basis points from a week ago. A month ago, the average rate on a 30-year fixed refinance was lower, at 2.95 percent.

At the current average rate, you’ll pay $428.65 per month in principal and interest for every $100,000 you borrow. That’s $1.09 higher compared with 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 average for a 15-year refi is currently running at 2.59 percent, down 1 basis point from a week ago.

Monthly payments on a 15-year fixed refinance at that rate will cost around $669 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 quickly.

10-year fixed refinance

The average rate for a 10-year fixed-refinance loan is 2.60 percent, down 3 basis points over the last seven days.

Monthly payments on a 10-year fixed-rate refi at 2.60 percent would cost $948.62 per month for every $100,000 you borrow. As you can see, the hefty savings in interest costs you’ll reap with that short 10-year term comes with the downside of a much larger monthly payment.

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 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 purchase loans:

Average refinance interest rates
Product Rate Last week Change
30-year fixed refi 3.13% 3.11% +0.02
15-year fixed refi 2.59% 2.60% -0.01
10-year fixed refi 2.60% 2.63% -0.03

Rates as of October 14, 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

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 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.”

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