Current Refinance Rates, May 3, 2021 | Rates Ratchet Higher

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Today, several closely followed mortgage refinance rates made gains.

Both 15-year fixed and 30-year fixed refinances saw their average rates trend upward. The average rate on 10-year fixed refinance mortgages remained unaltered.

Refinancing rates are constantly shifting. However, they’re currently very low. For those looking to refinance their existing mortgage, this might be a great opportunity to reduce your interest rate.

Here are the average rates for 30-year, 15-year, and 10-year refinance loans are:

You can discover the right refinance rate for you here.

30-Year Fixed Refinance Rates

Right now, the average 30-year, fixed refinance has an interest rate of 3.17%, an increase of 4 basis points from what we saw last week.

You can use our mortgage calculator to price out your monthly mortgage payments and find out how much less interest you’ll pay by making additional payments. Our mortgage calculator will also show you how much interest you’ll be charged over the entire loan term.

15-Year Fixed-Rate Refinance

Right now, average 15-year fixed refinance rates are 2.46%, an increase of 3 basis points from a week ago.

Monthly payments on a 15-year refinance loan will be bigger compared to a 30-year refinance at the same rate. However, a shorter loan term can help you build up equity in your home much more quickly.

10-Year Fixed-Rate Refinance

The average 10-year, fixed refinance rate is 2.41%, unmoved from a week ago.

Monthly payments with a 10-year refinance term would cost even more than what you’d pay on a 15-year loan. The upside is you’d end up paying even less interest over the life of the loan.

How Mortgage Refinance Rates Have Changed

The days of record low mortgage rates could be over. In recent weeks, mortgage rates topped 3% for the first time since July, according to Freddie Mac’s weekly survey.

But rates should still remain favorable for borrowers throughout this year. Some experts predict mortgage rates will stay low, and that during the back half of 2021 it’s more likely that rates will make steady gains. Whatever ends up happening with refinance rates in the long term will depend on broad factors, such as inflation and our economic recovery.

We determine refinance rate trends using data aggregated by Bankrate, which is owned by the same parent company as NextAdvisor. Lenders nationwide supply information to Bankrate, which is provided in the table below:

Average refinance interest rates
ProductRateLast weekChange
30-year mortgage refinance rate3.17%3.13%+0.04
15-year fixed refinance rate2.46%2.43%+0.03
10-year fixed refinance rate2.41%2.41%N/C

Rates as of May 3, 2021.

Take a look at mortgage refinance rates for a number of different loans.

How Are Refinance Rates Determined?

While there’s no single entity that determines refinance rates, the Federal Reserve can have a large influence on them. When it decides to ramp up its purchase of mortgage-backed securities, that puts downward pressure on mortgage rates. The Federal Reserve decisions can also impact inflation, which can influence where rates are headed.

However, there are personal factors that impact what refinance rate you are qualify for. How much equity you have in your home is important. Having at least 20% equity will help you to get the lowest possible rate. Having your finances in order is also key, and the best refinance rates are usually available to those with better credit scores and less debt.

Refinance Rate Predictions

Mortgage refinance rates fluctuate from day to day and week to week, but in the coming months the overall trend is going to be rising mortgage rates.

In 2020, refinance rates fell to the lowest levels on record. The Federal Reserve bank would like to keep rates low in order to stimulate the economy, but in order to accomplish its goal we don’t need to have all-time low interest rates. And as unemployment continues to drop and people have more money to spend, inflation should rise. This is one factor that will push refinance rates higher over the long haul, even though they are currently favorably low.

Is Now the Right Time to Refinance?

Record low refinance rates drove a surge in mortgage refinancing over the past year. But as interest rates have rebounded from all-time lows, the number of borrowers looking to refinance has begun to shrink.

However, even with the downturn, the interest in mortgage refinancing remains stronger than it was before the pandemic drove rates into the ground. This is because refinance rates are hovering at just over 3%, which is still a historically good deal, even if it’s higher than the recent lows.

So as we turn our backs on record low interest rates, many borrowers are still able to save with a refinance. But many experts forecast that rates will continue to trend upward throughout 2021. So it’s reasonable to expect refinancing to get more expensive for borrowers as the year progresses.

Why Are Refinance Rates Increasing?

Over the past few months, we’ve seen a steady increase in refinance rates.

This increase in rates has been driven by several factors, including inflation, and the economy. As the economy begins to show signs of life and spending increases thanks to a new round of economic stimulus, investors are expecting inflation to increase. And when inflation goes up, rates follow suit.

With more and more people getting vaccinated everyday, there is hope that the worst is behind us. So the days of all-time low rates look to be over. However, even with refinance rates making strong gains, they still remain low. So for many homeowners, now is still a good time to refinance, even if rates aren’t as low as they were just a few months ago.

How to Qualify for the Best Refinance Rate

Your personal situation has a big effect on the refinance rate you get. Less debt and a better credit score generally translates into a better interest rate.

Your situation isn’t the only factor that impacts the refinance interest rate you qualify for. The equity you have in the home also comes into play. Having at least 20% equity in your property is ideal.

The type of mortgage loan can determine what your mortgage refinance rate will be. A loan with a shorter repayment term generally has better interest rates than a longer term loan. Also, if you want to pull cash out of your home with a cash-out refinance, you should expect to pay a higher mortgage rate for that privilege.

How We Got These Rates

The rates we have included are averages provided by Bankrate and are calculated after the close of the previous business day. The lenders that the “Bankrate.com Site Average” tables include are not the same every day.

Bankrate receives this mortgage rate information from lenders across the nation, but it is possible that the referenced rates have changed since publishing this article.

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