Refinance rates 10/1/2021: Now is the time to refinance
We are sounding the alarm: if you are considering refinancing your mortgage, it is time to put it into practice. A number of economic trends are coming together to increase the likelihood that the Federal Reserve will raise interest rates anytime soon, which in turn will propel refi rates up from historical lows of the last two years or so.
Nobody can predict the future. But the 15-year and 30-year fixed rates seem to be gradually increasing for now, along with the average rate for a 10-year fixed refinance. Sure, interest rates always fluctuate – and current rates remain remarkably low compared to where they were a few years ago. Still with, and a key Fed meeting scheduled for early November, there is significant macroeconomic concern in the US. Bottom line: if your mortgage rate is 3.5% or higher, now is an excellent time to refinance.
30-year fixed rate refinancing
The average 30-year fixed refinancing rate is currently 3.15%, an increase of 14 basis points from that time last week. (One basis point is 0.01%.) Refinancing to a 30-year fixed loan for a shorter repayment term can lower your monthly payments. Because of this, a 30 year refinance can be a good idea if you’re having trouble making your monthly payments. However, the interest rates for a 30-year refinancing are usually higher than the interest rates for a 10- or 15-year refinancing. It also takes longer to pay off your loan.
15-year fixed rate refinancing
The average 15-year fixed refinance rate is currently 2.44%, up 16 basis points from what we saw the previous week. A 15 year fixed refinance will most likely increase your monthly payment compared to a 30 year loan. On the other hand, you save money in interest because you pay off the loan earlier. 15-year refinance rates are typically lower than 30-year refinance rates, which will help you save even more in the long run.
10-year fixed rate refinancing
The 10-year average refinance rate is currently 2.38%, up 13 basis points from what we saw the previous week. A 10-year refinancing typically has the highest monthly payment of all refinancing terms, but the lowest interest rate. With a 10 year refinance, you can pay off your home much faster and save interest. Just think carefully about your budget and current financial situation to make sure you can afford a higher monthly payment.
Where are the prices going
We track refinancing rate trends using information collected by Bankrate, which is owned by CNET’s parent company. Here is a table showing the average refinancing rates provided by lenders in the United States:
Average refinancing rates
|30 years of permanent refi||3.15%||3.01%||+0.14|
|15 years permanent refi||2.44%||2.28%||+0.16|
|10 years permanent refi||2.38%||2.25%||+0.13|
Prices from October 1st, 2021.
How to find personalized refinancing rates
Please note that the prices advertised online may not apply to you. Market conditions are not the only factor in interest rates; Your specific application and credit history will also play a big role.
In general, you want a high credit score, low credit utilization rate, and a history of consistent and on-time payments in order to get the best interest rates. In general, you can get a good feel for average interest rates online, but be sure to speak to a mortgage professional to find out the specific interest rates that you qualify for. And don’t forget about fees and closing costs, which can cost a huge amount upfront.
You should also know that many lenders have tightened lending requirements in recent months. If you have poor credit or bad credit history, you may have trouble getting refinance at the lowest interest rates.
Before applying for a refinance, you should make your application as strong as possible in order to get the best rates available. The best way to improve your credit score is to get your finances in order, be responsible for credit management, and regularly check your credit score. Also, compare quotes from multiple lenders to get the best rate.
Is now a good time to refinance?
For refinancing to make sense, you should usually get a lower interest rate than your current interest rate. In addition to the interest rates, changing the loan term is another reason for refinancing. While interest rates have been low over the past few months, you shouldn’t just look at market rates when deciding whether a refinance is right for you.
Refinancing cannot always make financial sense. Take into account your personal goals and financial circumstances. How long do you plan to stay in your home? Are you refinancing to reduce your monthly payment, prepay your home, or for a combination of reasons? And don’t forget about fees and closing costs, which can add up.
Note that some lenders have tightened their requirements since the pandemic began. If you don’t have a solid credit score, you may not qualify for the best rate. Refinancing can be a good move if you can get a good interest rate or if you can pay off your loan sooner – but consider carefully whether it is the right choice for you.