Today's average refinance rates
Refinancing your mortgage
Compare today's average mortgage rates for July 4, 2024 to one week ago, using interest rate data collected by Bankrate as reported by lenders across the United States.
Housing market experts predict mortgage rates will fall in 2024. Compare multiple loan offers from different lenders to find the best rate for your situation. Enter your information below to receive a custom quote from CNET's partner lenders.
About these rates: Like CNET, Bankrate is owned by Red Ventures. This tool features partner rates from lenders that you can use to compare multiple mortgage rates.
Current trends in refinancing rates
When mortgage rates hit record lows during the pandemic, homeowners were able to score lower interest rates, sparking a refinancing boom. But with the average mortgage rate now sitting at about 7%, taking out a new mortgage isn't as financially viable.
Expectations were high earlier this year that the Fed would cut interest rates this summer, but the past few months have made it clear to investors that persistently high inflation and a strong labor market mean the Fed will take longer than expected to cut rates.
Rising mortgage rates make refinancing less attractive for homeowners and more likely to hold on to their existing mortgages.
What to expect from refinance rates this year
“Interest rates will likely be lower at the end of 2024 than they are today,” says Keith Gumbinger, vice president of mortgage information site HSH.com. But it's hard to predict exactly where mortgage rates will ultimately be, because it depends on economic data that's not yet available.
If inflation continues to improve and the Fed is able to cut interest rates, mortgage refinance rates could be between 6% and 6.5% by the end of the year.
But data showing rising inflation could make investors rethink the possibility of the Fed cutting rates, sending mortgage rates higher, according to Orfe Dibongai, senior economist at Zillow Home Loans.
If you're considering refinancing, remember that you can't predict the timing of the economy. Interest rates fluctuate by the hour, day, and week and are influenced by a variety of factors. Your best bet is to keep an eye on daily rate fluctuations and create a strategy to take advantage of any large percentage drops, says Matt Graham of Mortgage News Daily.
What you need to know about refinancing
When you refinance a mortgage, you take out another mortgage to pay off your first mortgage. With a traditional refinance, your new mortgage has a different term and interest rate. With a cash-out refinance, you tap into your equity in a new loan that's larger than your existing mortgage balance and receive the difference in cash.
Refinancing can be a great financial move if you can achieve a lower interest rate or pay off your mortgage in a shorter period of time, but consider if it's the right choice for you. A drop in interest rates of 1% or more can be an incentive to refinance and can significantly reduce your monthly payments.
How to find the best refinance rate
Interest rates advertised online often require certain conditions in order to qualify. Your personal interest rate will depend on market conditions and your specific credit history, financial profile, and application. If you have a high credit score, a low credit utilization ratio, and a history of consistently making on-time payments, you will usually qualify for the best interest rate.
30-year fixed rate refinance
The current average interest rate on a 30-year refinance is 7.08%, up 6 basis points from the same time last week. (One basis point is equal to 0.01%.) A 30-year fixed refinance typically offers lower monthly payments than a 15- or 10-year refinance, but it takes longer to pay off and typically costs more in interest over the long term.
15-year fixed rate refinance
For a 15-year fixed refinance, the average interest rate is currently 6.55%, up 5 basis points from a week ago. With a 15-year fixed refinance, your monthly payment will likely go up compared to a 30-year loan, but you'll save more money in the long run because you'll pay off your loan faster. Also, 15-year refinance rates are typically lower than 30-year refinance rates, so you'll save more money in the long run.
10-year fixed rate refinance
The average interest rate on a 10-year fixed refinance loan is currently 6.41%, down 11 basis points from last week. 10-year refinances typically have the lowest interest rates of all refinance terms but the highest monthly payments. A 10-year refinance can help you pay off your mortgage faster and save money on interest, but be prepared for a higher monthly payment.
To get the best refinance rate, make sure your application is as strong as possible by getting your finances in order, using credit responsibly, and regularly monitoring your credit. Also, don't forget to talk to multiple lenders to compare offers.
Does refinancing make sense?
Homeowners typically refinance to save money, but there are other reasons why people refinance. Here are the most common reasons homeowners refinance:
To lower your interest rate: If you can secure an interest rate that’s at least 1% lower than your current mortgage rate, refinancing makes sense. To switch mortgage types: If you have an adjustable-rate mortgage and want more security, you can refinance to a fixed-rate mortgage. To eliminate mortgage insurance: If you have an FHA loan that requires mortgage insurance, you can refinance to a conventional loan as long as you have 20% of your own money down. To change your loan term: Refinancing to a longer loan term could lower your monthly payments. Refinancing to a shorter term could save you money on interest in the long run. To utilize your own funds through a cash-out refinance: Replacing your mortgage with a larger loan allows you to receive the difference in cash to cover a big expense. To get someone off your mortgage: In the case of a divorce, you can apply for a new mortgage in your name alone and use the funds to pay off your existing mortgage.
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