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Today, several benchmark refinancing rates have decreased.
Both 15-year fixed and 30-year fixed refinancing saw their average rates drop. At the same time, the average 10-year fixed refinancing rates have remained the same.
Refinancing rates are constantly fluctuating. However, they are very low these days. For anyone looking to refinance their existing mortgage, this can be a great opportunity to lower your interest rate.
Take a look at today’s refinancing rates:
30-year fixed refinancing rates
Now, the average 30 years, fixed refinancing has an interest rate of 3.10%, a reduction of 2 basis points compared to the previous week.
You can use our mortgage calculator to price your monthly mortgage payments and understand how paying more each month will impact your mortgage. Our mortgage calculator will also show you how much interest will be charged over the entire term of the loan.
15-year fixed rate refinancing
Currently, the average rate for a 15-year fixed refinancing loan is 2.39%, a reduction of 3 basis points compared to what we saw last week.
Monthly payments on a 15-year refinancing loan are more difficult to fit into a monthly budget than a 30-year mortgage payment. However, a shorter loan can help you accumulate equity in your home much more quickly.
10-year fixed rate refinancing
The average 10-year fixed refinancing rate is 2.38%, unchanged from what we saw last week.
Monthly payments with a 10-year refinancing term would cost even more than you would pay on a 15-year loan. The advantage is that you would end up paying even less interest over the life of the loan.
Mortgage refinancing rate movement
But rates are still likely to remain favorable for policyholders throughout this year. Experts see that rates will remain low throughout 2021, and that during the second half of 2021 rates are more likely to have steady gains. Whatever happens to long-term refinancing rates will depend on broad factors, such as inflation and economic recovery.
The table below shows where the refinancing rates were directed in the last week. This information is provided by Bankrate, which compiles data collected from creditors across the country. Bankrate is owned by the parent company of Nextadvisor, Red Ventures.
Rates as of May 17, 2021.
What influences today’s refinancing rates?
Refinancing rates are determined by a wide variety of factors, including your personal situation. You will also need to consider the type of refinance and the repayment term of the loan, as this can also affect your rate. For example, if you want to withdraw money from your property with what is known as a withdrawal refinance, you can expect to pay a higher refinancing fee. And loans with longer repayment terms usually have higher interest rates.
However, you cannot control everything when it comes to refinancing rates. General economic influences, such as inflation, play a large role in determining the market for refinancing rates. Government policies also contribute to the equation: when government spending increases, they can put upward pressure on inflation and cause rates to rise.
Refinancing rate forecasts
On a day-to-day basis, refinancing rates can go up or down based on a wide variety of factors. But the general trend will be rising rates in the coming months.
With refinancing rates hitting a record low just a few months ago, they had little place to move, except upwards. And since January this is exactly what interest rates have been doing. It is important to note that, from a historical perspective, refinancing rates are still exceptionally low, even with the recent increase. Thus, as the vaccine distribution continues to gain strength and the economy begins to recover, refinancing rates still have a lot of room to grow.
Is now the right time to refinance?
The past year has been a historically excellent time to refinance because rates have never been lower. However, since January, mortgage rates have gone up and crossed the 3% threshold for the first time since last summer.
Although the days of record refinancing rates are behind us, it is still an exceptional time to refinance for many homeowners. If you manage to catch today’s rates that are just north of 3%, you are closing a deal at an almost lower rate than ever before.
So there is still time to save with refinancing, but this window is closing. Many experts are predicting that rates will continue to rise as the economy returns to pre-pandemic levels next year.
Why are refinancing rates increasing?
In the past few months, we have seen a steady increase in refinancing rates.
This increase in rates was driven by several factors, including inflation and the economy. As the economy begins to show signs of life and spending increases thanks to a new round of economic stimuli, investors expect inflation to increase. And when inflation rises, rates follow suit.
Although refinancing rates have not risen to levels beyond what many experts have predicted, they have risen earlier than expected. Keep in mind that, from a historical perspective, refinancing rates are still exceptionally low. So the window to save money on mortgage refinancing is still open for many homeowners.
How to get the best refinancing rate
Your finances have a big impact on the refinancing rate you receive. Less debt and a healthier credit score usually translates to a better interest rate.
Your situation is not the only thing that will affect your refinancing rate. A better loan-to-value ratio (LTV) can help you secure a reduced refinancing rate. So the more equity you accumulate, the better. Having at least 20% equity in your property is ideal.
Even the mortgage itself can determine what your refinancing rate will be. A loan with a shorter repayment term generally has lower rates than mortgage refinancing loans with longer repayment terms, all the same. In addition, if you want to withdraw money from your home with a withdrawal refinance, you will be charged a higher interest rate compared to other types of refinancing.
How did we get these fees
The rates we include are averages provided by Bankrate and are calculated after the close of the previous business day. The creditors included in the “Bankrate.com website average” tables are not the same every day.
National lenders provide Bankrate.com with this mortgage rate information. It is possible that the mortgage rates we refer to have changed since their publication.