© Provided by CNETEducation Images/Getty
Numerous benchmark refinance rates trailed off today. Both 15-year fixed and 30-year fixed refinances saw their mean rates shrink. At the same time, average rates for 10-year fixed refinances also trailed off. Although refinance rates are dynamic, they have been lower than they've been in years. For those looking to lock in a good rate, now is an optimal time to refinance a home. Before getting a refinance, remember to consider your personal needs and financial situation, and shop around for various lenders to find the best one for you.
© Education Images/Getty 30-year fixed refinance rates
The current average interest rate for a 30-year refinance is 3.09%, a decrease of 3 basis points compared to one week ago. (A basis point is equivalent to 0.01%.) Refinancing to a 30-year fixed loan from a shorter loan term can lower your monthly payments. This makes 30-year refinances good for people who are having difficulties making their monthly payments or simply want a bit more breathing room. Be aware, though, that interest rates will typically be higher compared to a 15-year or 10-year refinance, and you'll pay off your loan at a slower rate.
15-year fixed-rate refinance
For 15-year fixed refinances, the average rate is currently at 2.39%, a decrease of 4 basis points from what we saw the previous week. A 15-year fixed refinance will most likely raise your monthly payment compared to a 30-year loan. However, you'll also be able to pay off your loan quicker, saving you money over the life of the loan. 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 refinance
The average 10-year fixed refinance rate right now is 2.38%, a decrease of 1 basis points over last week. A 10-year refinance will typically feature the highest monthly payment of all refinance terms, but the lowest interest rate. A 10-year refinance can help you pay off your house much quicker and save on interest. Just be sure to carefully consider your budget and current financial situation to make sure that you can afford a higher monthly payment.
Where rates are headed
We track refinance rate trends using information collected by Bankrate, which is owned by CNET's parent company. Here's a table with the average refinance rates reported by lenders across the country:
Average refinance interest rates
| Product | Rate | A week ago | Change |
|---|
| 30-year fixed refi | 3.09% | 3.12% | -0.03 |
| 15-year fixed refi | 2.39% | 2.43% | -0.04 |
| 10-year fixed refi | 2.38% | 2.39% | -0.01 |
Rates as of May 14, 2021.
How to find the best refinance rate
When looking for refinance rates, know that your specific rate may differ from those advertised online. Market conditions aren't the only factor in interest rates; your particular application and credit history will also play a large role.
Having a high credit score, low credit utilization ratio, and a history of consistent and on-time payments will generally help you get the best interest rates. You can generally get a good feel for average interest rates online, but make sure to speak with a mortgage professional in order to see the specific rates you qualify for. You should also take into account any fees and closing costs that might offset the potential savings of a refinance.
Since the beginning of the pandemic, a lot of lenders have been stricter with who they approve for a loan. This means that if you don't have great credit ratings, you might not be able to take advantage of lowered interest rates -- or qualify for a refinance in the first place.
To get the best refinance rates, you'll first want to make your application as strong as possible. You can do that by monitoring your credit, taking on debt responsibly, and getting your finances in order before applying for a refinance. Don't forget to speak with multiple lenders and shop around to find the best rate.
When should I refinance?
In order for a refinance to make sense, you'll generally want to get a lower interest rate than your current rate. Aside from interest rates, changing your loan term is another reason to refinance. It's true that in the past year, interest rates have been at a historic low. But when deciding whether to refinance, be sure to take into account other factors besides market interest rates.
A refinance may not always make financial sense. Consider your personal goals and financial circumstances. How long do you plan on staying in your home? Are you refinancing to decrease your monthly payment, pay off your house sooner -- or for a combination of reasons? And don't forget about fees and closing costs, which can add up.
Some lenders have tightened their requirements in recent months, so you may not be able to get a refinance at the posted interest rates -- or even a refinance at all -- if you don't meet their standards.Refinancing at a lower interest rate can save you money in the long run and help you pay off your loan sooner. But a careful cost-benefit analysis is necessary to confirm that doing so makes sense.