Several closely watched mortgage refinance rates ticked downward today.
Nationwide averages for 30-year fixed and 15-year fixed refinances both decreased. Meanwhile, the average rate on 10-year fixed refis also tapered off.
Refinancing rates are constantly changing, but they remain much lower overall than they were before the Great Recession. If you’re in the market to refinance, it may be a great time to lock in a rate.
30-year fixed refinance
The average 30-year fixed-refinance rate is 3.22 percent, down 11 basis points compared with a week ago. A month ago, the average rate on a 30-year fixed refinance was higher, at 3.46 percent.
At the current average rate, you’ll pay $433.56 per month in principal and interest for every $100,000 you borrow. Compared with last week, that’s $6.05 lower.
You can use Bankrate’s mortgage calculator to estimate your monthly payments 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 for a 15-year refi is currently running at 2.80 percent, down 1 basis point from a week ago.
Monthly payments on a 15-year fixed refinance at that rate will cost around $678 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 save thousands of dollars 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 2.81 percent, down 5 basis points over the last seven days.
Monthly payments on a 10-year fixed-rate refi at 2.81 percent would cost $959.16 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||3.22%||3.33%||-0.11|
|15-year fixed refi||2.80%||2.81%||-0.01|
|10-year fixed refi||2.81%||2.86%||-0.05|
Rates as of July 13, 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
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 do refinance rates rise and fall?
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 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 chart above links out to loan-specific pagesto help our readers learn more about rates by product type.|
|30-Year Loan||Current 30 Year Mortgage Rates||30-Year Refinance Rates|
|20-Year Loan||Current 20 Year Mortgage Rates||20-Year Refinance Interest Rates|
|15-Year Loan||Today’s 15-Year Mortgage Rates||15-Year Mortgage Refinance Rates|
|10-Year Loan||10-Year Mortgage Rates||10-Year Refinance Rates|
|FHA Loan||FHA Mortgage Rates||Current FHA Loan Refinance Rates|
|VA Loan||Current VA Mortgage Rates||VA Mortgage Refinance Rates|
|ARM Loan||ARM Interest Rates||ARM Refinance Rates|
|Jumbo Loan||Jumbo Loan Rates||Jumbo Loan Refinance Rates|