Mortgage refinance rates were mixed, but one key rate increased.
The average rate for a 30-year fixed-rate refinance climbed, but the average rate on a 15-year fixed decreased. Meanwhile, the average rate on 10-year fixed refis dropped.
Refinancing rates are constantly changing, 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 3.68 percent, up 4 basis points over the last seven days. A month ago, the average rate on a 30-year fixed refinance was lower, at 3.64 percent.
At the current average rate, you’ll pay $459.15 per month in principal and interest for every $100,000 you borrow. That’s an increase of $2.25 over what you would have paid 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 for a 15-year refi is currently running at 2.96 percent, down 9 basis points from a week ago.
Monthly payments on a 15-year fixed refinance at that rate will cost around $685 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 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 3.00 percent, down 13 basis points over the last seven days.
Monthly payments on a 10-year fixed-rate refi at 3.00 percent would cost $971.62 per month for every $100,000 you borrow. As you can see, the big 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 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||3.68%||3.64%||+0.04|
|15-year fixed refi||2.96%||3.05%||-0.09|
|10-year fixed refi||3.00%||3.13%||-0.13|
Rates as of May 25, 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.
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.
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 landscape
The current mortgage rate environment has been unstable because of the coronavirus pandemic, but generally rates have been 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.”
|Loan term||Purchase Rates||Refinance Rates|
|The table 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 Refinance Rates|
|20-Year Loan||20-Year 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 Fixed Mortgage Rates||Current 10-Year Refinance Rates|
|FHA Loan||FHA Mortgage Loan Rates||FHA Refinance Rates|
|VA Loan||VA Mortgage Interest Rates||VA Refinance Loan Rates|
|ARM Loan||ARM Mortgage Rates||ARM Refi Mortage Rates|
|Jumbo Loan||Jumbo Mortgage Rates||Current Jumbo Refinance Rates|