Refi Rates Today, May 4, 2021 | Rates Hold Firm

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Today a few benchmark mortgage refinance rates didn’t fluctuate.

Both 15-year fixed and 30-year fixed refinances saw their mean rates not change. The average rate on 10-year fixed refinance mortgages decreased.

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

The average mortgage refinance rates are as follows:

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 3.14%, unmoved from what we saw last week.

You can use our mortgage calculator to determine how much your mortgage will cost you every month 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 2.44%, unmoved from a week ago.

Monthly payments on a 15-year refinance loan are tougher to fit into a monthly budget than a 30-year mortgage payment would be. 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 2.37%, a decrease of 2 basis points 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 all-time historically low mortgage rates look to be behind us. In recent weeks, mortgage rates inched above 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 toward the end of the year 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.

The table below shows where refinance rates were headed in the last week. This information is provided by Bankrate, which aggregates data collected from lenders across the country. Bankrate is owned by Nextadvisor’s parent company, Red Ventures.

Average refinance interest rates
ProductRateLast weekChange
30-year mortgage refinance rate3.14%3.14%N/C
15-year fixed refinance rate2.44%2.44%N/C
10-year fixed refinance rate2.37%2.39%-0.02

Rates as of May 4, 2021.

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

Factors Behind Today’s Refinance Rates

Refinance rates are determined by a wide variety of factors, including your personal situation. You’ll also need to consider the type of refinance and loan repayment term because that can also impact your rate. For example, if you want to pull cash out of your property with what is known as a cash-out refinance, you can expect to have a higher refinance rate. And loans with longer repayment terms, typically have higher interest rates.

However, you can’t control everything when it comes to interest rates. Wider economic influences, like inflation, play a big role in determining the market for refinance rates. Government policies also factor into the equation, when government spending goes up, it can put upward pressure on inflation and cause rates to grow.

Refinance Rate Predictions

On a day to day basis refinance rates can move up or down based on a wide variety of factors. But the general trend is going to be rising rates in the months to come.

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.

What’s Driving Increasing Refinance Rates?

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

As the economy continues to recover, you should expect to see rates rise. Although a full recovery may not happen in the near term, rates have risen on the expectation of a bright economic future. The new round of stimulus has increased the likelihood of rising inflation in many investors minds, which has driven up Treasury bond yields. And mortgage rates typically move in tandem with Treasury bonds.

While refinance rates haven’t grown to levels beyond what many experts predicted, they have increased sooner than anticipated. Keep in mind, that from a historical perspective, refinance rates are still exceptionally low. So the window to save money with a mortgage refinance is still open for many homeowners.

How to Get the Lowest Refinance Rate

Refinance rates vary depending on your personal financial situation. Those with higher credit scores and lower DTI ratios will generally earn a bigger markdown on their refinance rate.

Your situation isn’t the only consideration that affects your mortgage refinance rate. The amount of equity you have in the home also comes into play. You want to have at least 20% equity, or a loan-to-value ratio of 80% or less.

Even the mortgage itself will impact your refinance interest rate. A shorter-term refinance loan usually has better interest rates than refinance loans with longer repayment terms, all else equal. Your interest rate is also impacted by the type of refinance you plan on taking out. A cash-out refinance is considered more risky and will come with a higher refinance rate than other types of refinance loans.

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.

National lenders provide this mortgage rate information to Bankrate.com. It is possible the mortgage rates we reference has changed since this was published.

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