Current Trends in National Mortgage Refinance Rates: What You Need to Know

As of now, the average refinance rate for a 30-year fixed mortgage stands at 7.10%, according to recent data from Curinos. This marks an increase from last week’s average of 6.80%. For borrowers refinancing a $100,000 30-year fixed-rate mortgage, this translates to a monthly payment of approximately $672 for principal and interest, excluding taxes and fees. Over the life of the loan, the total interest paid would amount to around $142,004.

When considering the annual percentage rate (APR), which reflects the total cost of the loan, the APR for a 30-year fixed mortgage is currently 7.12%, up from 6.82% last week.

For those looking at 20-year fixed mortgage refinances, the average rate is now 6.97%, a rise from last week’s 6.60%. The APR for this term is 7.00%, compared to 6.63% previously. A borrower refinancing a $100,000 loan at this rate would incur a monthly payment of $774, leading to total interest costs of approximately $85,640 over the loan's duration.

The 15-year fixed refinance mortgage currently averages 6.16%, an increase from 5.78% last week. The corresponding APR is 6.19%, up from 5.81%. For a $100,000 refinance at this rate, the monthly payment would be about $852, resulting in total interest of around $53,445 throughout the loan term.

In the jumbo mortgage category, the average interest rate for a 30-year fixed refinance is 6.99%, compared to 6.76% last week. Borrowers refinancing a $100,000 jumbo mortgage at this rate would pay approximately $665 monthly in principal and interest. For a 15-year fixed-rate jumbo mortgage, the average rate is 6.33%, slightly up from 6.32% last week, with a monthly payment of $862.

Mortgage lenders typically charge higher interest rates for refinance loans compared to purchase loans, with current refinance rates being 0.01% to 0.15% higher for a 30-year fixed rate.

To potentially lower your interest rate, consider paying closing costs upfront rather than rolling them into the loan. Buying discount points and avoiding private mortgage insurance (PMI) can also lead to savings.

Refinancing can be beneficial for various reasons, such as lowering your monthly payments, reducing your interest rate, or accessing your home equity. However, it’s essential to consider the closing costs associated with refinancing and determine if it makes sense based on how long you plan to stay in your home.

To assess the financial viability of refinancing, calculate the break-even point by dividing the closing costs by the monthly savings from the new mortgage. Tools like the Forbes Advisor mortgage refinance calculator can assist in evaluating your options.

Reasons to consider refinancing include:

• Lowering Monthly Payments: Extending your repayment period or qualifying for a better rate can reduce monthly costs.
• Reducing Interest Rates: Switching to a shorter loan term can lead to lower rates and less interest paid overall.
• Eliminating Annual Fees: Converting to a conventional mortgage can help avoid mortgage insurance premiums if you have sufficient equity.
• Switching to Fixed Rates: Refinancing from an adjustable-rate mortgage to a fixed rate can protect against future rate hikes.
• Accessing Home Equity: A cash-out refinance allows you to use your home equity for debt consolidation or personal expenses, often at lower rates than unsecured loans.

While refinancing can provide more repayment flexibility, it’s crucial to ensure that it results in a smaller monthly payment and offsets the closing costs. Always approach refinancing with a strategy to secure the best possible rate, such as monitoring mortgage rates regularly and maintaining a strong credit score.