Mortgage Refinancing Rates July 22, 2021: Rates Fall

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Deborah Jaffe / Getty

Many important refinancing rates have stalled today. Average refinancing rates with fixed rates for 15 and 30 years have decreased. In addition, the average rate on 10-year fixed refinancing has decreased. Refinancing interest rates have never been set in stone – but rates were at historic lows. For those looking to get a good rate, now is the perfect time to refinance a home. Before refinancing, be sure to consider your personal needs and financial situation, and look from several lenders for the right one for you.

30 year fixed refinancing rates

For a 30-year fixed refinance, the average rate is currently 2.96%, down 14 basis points from what we saw a week ago. (The base point is equivalent to 0.01%.) With a fixed refinancing for 30 years, monthly payments are usually lower than for refinancing for 15 or 10 years. If you are currently having difficulty making monthly payments, a 30-year refinance might be a good option for you. However, interest rates for a 30 year refinance are usually higher than for a 15 or 10 year refinance. It will also take you longer to pay off the loan.

15 year fixed rate refinancing

The current average interest rate on 15-year refinancing is 2.32%, down 11 basis points from last week. Refinancing a 15 year fixed loan from a 30 year fixed loan will likely increase your monthly payment. However, you will also be able to repay the loan faster, saving money over the life of the loan. You also usually get lower interest rates compared to a 30 year loan. This will help you save even more in the long run.

10 year fixed rate refinancing

For 10-year fixed refinances, the average rate is currently 2.31%, down 13 basis points from last week. Compared to 30-year and 15-year refinancing, 10-year refinancing usually has a lower interest rate but a higher monthly payment. A 10-year refinance can help you recoup your home much faster and save on interest in the long run. However, you should review your budget and current financial situation to make sure you can afford the higher monthly payment.

Where are the rates going

We monitor trends in refinancing rates using data collected by Bankrate, owned by parent company CNET. Here is a table with the average refinancing rates quoted by lenders across the country:

Average refinancing interest rates
Product Indicator Last week Change
30 year fixed return 2.96% 3.10% -0.14
Fixed return for 15 years 2.32% 2.43% -0.11
10 year fixed return 2.31% 2.44% -0.13

Tariffs as of July 22, 2021.

How to shop at refinancing rates

It’s important to understand that the rates advertised online may not apply to you. Your interest rate will be affected by market conditions as well as your credit history and application.

Typically, you need a high credit rating, a low credit utilization rate, and a history of making consistent and timely payments in order to get the best interest rates. It is always helpful to research interest rates online, but you need to contact a professional mortgage specialist to find out the exact refinancing rate. And don’t forget about commissions and closing costs, which can be huge up front.

You should also be aware that many lenders have had stricter loan approval requirements in the past few months. Thus, you cannot qualify for refinancing – or at a low rate – unless you have a solid credit rating.

Before applying for refinancing, you must make your application as strong as possible in order to get the best rates available. If you haven’t already, try improving your credit by tracking your credit reports, using credit responsibly, and managing your finances carefully. Be sure to talk to several lenders and look for the best rate.

When to consider refinancing your mortgage

For refinancing to make sense, you usually want a lower interest rate than your current rate. Apart from interest rates, changing the loan term is another reason for refinancing. It is true that interest rates were at historic lows last year. But when deciding to refinance, be sure to consider factors other than market interest rates.

Refinancing doesn’t always make financial sense. Consider your personal goals and financial circumstances. How long do you plan to stay in your home? Are you refinancing to reduce your monthly payment, pay off your house faster – or for any number of reasons? And don’t forget about commissions and closing costs that can rise.

Note that some lenders have tightened their requirements since the start of the pandemic. Unless you have a solid credit rating, you cannot qualify for the best rate. If you can get a lower interest rate or pay off your loan earlier, refinancing can be a great move. But first, carefully weigh the pros and cons to make sure it is right for your situation.



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