Compare Current Refinance Rates

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Today’s Refinance Rates

Average market rates for May 26, 2024 are 6.34% for 15-year fixed refinance and 7.25% for 30-year fixed refinance

ProductRateAPR
15-year Fixed Refinance6.34%6.39%
30-year Fixed Refinance7.25%7.28%
Rates based on market averages as of May 26, 2024.

ProductRateAPR
15-year Fixed Refinance6.34%6.39%
30-year Fixed Refinance7.25%7.28%
Rates based on market averages as of May 26, 2024.

Fixed Refinance Rates for Conventional Loans

ProductRateAPR
10-year Fixed Refinance6.18%6.25%
15-year Fixed Refinance6.34%6.39%
20-year Fixed Refinance6.96%7.00%
30-year Fixed Refinance7.25%7.28%
Rates based on market averages as of May 26, 2024.

ARM Refinance Rates for Conventional Loans

ProductRateAPR
10/6 Arm (refinance)7.71%7.74%
3/6 Arm (refinance)6.79%6.79%
5/6 Arm (refinance)7.60%7.64%
7/6 Arm (refinance)7.37%7.41%
Rates based on market averages as of May 26, 2024.

Refinance Rates for Government-Backed Loans

ProductRateAPR
30-year Fixed FHA Refinance6.38%7.19%
30-year Fixed USDA Refinance6.21%6.22%
30-year Fixed VA Refinance6.45%6.59%
Rates based on market averages as of May 26, 2024.

Refinance Rates for Jumbo Loans

ProductRateAPR
10-year Fixed Jumbo Refinance6.52%6.58%
15-year Fixed Jumbo Refinance6.76%6.78%
20-year Fixed Jumbo Refinance7.36%7.40%
30-year Fixed Jumbo Refinance7.36%7.39%
Rates based on market averages as of May 26, 2024.

How Does Refinancing a Mortgage Work?

A mortgage refinance involves replacing your existing mortgage with a new one, often with better terms. The process for refinancing typically involves submitting financial documents, such as income verification and credit history, similar to the purchase mortgage process.

Upon approval, the new mortgage pays off the remaining balance of the original mortgage, and you are then bound to the terms of the new mortgage. Closing costs are also a part of the refinancing process, and they can be paid upfront or sometimes rolled into the new loan.

Refinancing can provide financial benefits, such as lowering monthly payments, reducing the total interest paid over the life of the loan, or adjusting the loan term to better suit your current financial situation. However, it’s important for borrowers to weigh the costs of refinancing against the potential benefits.

How to Get the Best Mortgage Refinance Rate

Most people consider refinancing their home when interest rates drop, but it’s important to remember that your refinance rate can vary based on your eligibility. Factors such as your credit score, debt-to-income ratio and other personal financial details are carefully evaluated.

Getting the best refinance interest rate also depends on several external factors. Typically, your location, the loan amount and the value of the home are among the most important considerations.

Here are some tips to help you secure the best refinance interest rate:

1. Improve your credit score

Having a good credit score is a key factor in securing the best refinance rate for your mortgage.

Your credit score is most dependent on your payment history and your credit line utilization rate (the amount of credit you’re using in comparison to your credit limit). So make sure you pay your bills on time, regularly check your credit report for any errors and fix them as soon as possible.

It’s also wise to avoid opening new credit accounts unless you really need them, as each new account can slightly lower your score temporarily. Having a mix of credit types and keeping your older accounts open can help as it establishes a longer credit history.

2. Compare lender interest rates and fees

Interest rates can vary significantly among lenders due to their different risk assessments, funding sources and business models. Even a slight difference in the interest rate can have a substantial impact on the total cost of the loan over its lifetime. A lower interest rate means lower monthly payments, translating into considerable savings.

Also, lenders charge their own fees, including application fees, origination fees, appraisal fees and closing costs. These fees can vary widely and might offset the benefits of a lower interest rate. You can identify the true cost of the loan by comparing these fees with the interest rate.

Each lender may offer different terms and conditions. Some may have more flexible repayment options or offer special terms like interest-only periods. Understanding these terms is crucial in choosing a loan that not only has favorable financial implications but also aligns with your personal and financial circumstances.

3. Stay up to date with market conditions

Refinance interest rates and mortgage rates overall are highly dependent on market trends. Understanding the current market trends is crucial for borrowers wanting to secure the best refinance rates. Interest rates fluctuate based on a variety of economic factors, including central bank policies, inflation rates and overall economic conditions.

Market conditions that affect interest rates include:

  • Supply and demand for credit: When there’s a high demand for borrowing, interest rates tend to rise as lenders charge more for their money. Conversely, if there’s a surplus of available credit, rates might fall.
  • Market sentiment: Perceptions of risk and uncertainty can impact interest rates. During times of high uncertainty, investors might seek safer investments like government bonds, causing rates to drop. In periods of optimism, rates might rise.
  • Liquidity in financial markets: The availability of money in financial markets can influence interest rates. Central bank interventions to increase or decrease liquidity can impact short-term rates.
  • Market expectations: Anticipations of future economic conditions, such as inflation rates or economic growth, can significantly affect interest rates. If markets expect higher inflation, rates may increase to compensate.
  • Yield curve: The shape of the yield curve, which shows the relationship between bond yields and maturities, can influence interest rates. A steepening or flattening yield curve might signal expectations of future economic conditions, impacting rates.
  • Government policies and regulations: Changes in government policies, tax laws or regulations can influence interest rates. Policies that impact spending, borrowing or investment can also affect the overall demand for credit.

Understanding market trends helps in assessing the future direction of interest rates. If rates are expected to decrease, it might be advantageous to wait before refinancing. Conversely, if rates are predicted to rise, it may be wise to refinance sooner rather than later.

4. Buy discount points

Discount points are essentially prepaid interest and paid upfront at closing to lower the interest rate. Each point typically costs 1% of the loan amount and usually lowers the interest rate by 0.25%, though this can vary.

The primary advantage of buying discount points is the potential for significant interest savings over the life of the loan. This strategy is particularly beneficial for borrowers who plan to stay in their homes for an extended period, as the upfront cost of the points can be offset by the lower monthly payments over time.

It’s important to calculate the break-even point – the time it takes for the monthly savings to exceed the upfront cost of the points. If a borrower plans to sell or refinance the home before reaching this break-even point, the purchase of points may not be cost-effective.

While the purchase of discount points can be a smart strategy to secure a lower interest rate and reduce long-term costs, it requires careful consideration of one’s long-term housing plans and financial situation.

Should You Refinance Your Mortgage?

Refinancing your current mortgage can be a strategic financial move in certain situations, but it’s not always the right choice. You should consider refinancing when it can lead to a significantly lower interest rate, reduce your monthly payments, help you switch from an adjustable-rate to a fixed-rate mortgage or shorten the term of your loan.

Refinancing is particularly beneficial if you plan to stay in your home long enough to recoup the closing costs through your monthly savings. This is often the case in a declining interest rate environment.

On the other hand, refinancing might not be the best choice if you plan to move out of your home in the near future, as the upfront costs may not be offset by the potential savings. Additionally, if you’re already deep into your current mortgage, refinancing to a new 30-year loan might end up costing more in interest over the long term despite a lower monthly payment.

To make an informed decision, it’s important to calculate the break-even point where the savings from refinancing outweigh the costs. Use our refinance calculator and break-even calculator to estimate your potential savings and assess whether refinancing would be beneficial for your specific situation.

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