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Latest Tech: Refi rates on Aug. 31, 2021: Rates rise

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Average rates for refinance loans increased today. Both the 15-year and 30-year fixed refinances rose, while the 10-year fixed refinance remained unchanged. Refinance interest rates always fluctuate, but are lower than they’ve been in years. If you’re looking to refinance, now might be the ideal time to lock in a low fixed rate. But as always, be sure to first review your personal goals and circumstances, and shop multiple lenders to find a refinance mortgage that best meets your needs.

30-year fixed-rate refinance

The average 30-year fixed refinance rate right now is 3.07%, an increase of 8 basis points compared to one week ago. (A basis point is equivalent to 0.01%.) A 30-year fixed refinance will typically have lower monthly payments than a 10- or 15-year refinance. This makes 30-year refinances good for people who are having difficulties making their monthly payments or simply want a little more breathing room. Be aware, though, that interest rates will typically be higher compared to a 10- or 15-year refinance, and you’ll pay off your loan at a slower rate.

15-year fixed-rate refinance

For 15-year fixed refinances, the average rate is currently at 2.37%, an increase of 7 basis points from what we saw the previous week. A 15-year fixed refinance will most likely raise your monthly payment compared to a 30-year loan. On the other hand, you’ll save money on interest, since you’ll pay off the loan sooner. You’ll also typically get lower interest rates compared to a 30-year loan. This can help you save even more in the long run.

10-year fixed-rate refinance

The current average interest rate for a 10-year refinance is 2.33%, unmoved from what we saw the previous week. Compared to a 15- or 30-year refinance, a 10-year refinance will usually have a lower interest rate but a higher monthly payment. A 10-year refinance can be a good deal, since paying off your house sooner will help you save on interest in the long run. But you should confirm that you can afford a higher monthly payment by evaluating your budget and overall financial situation.

Where rates are headed

We track refinance rate trends using information collected by Bankrate, which is owned by CNET’s parent company. Here’s a table with the average refinance rates reported by lenders across the US:

Average refinance interest rates

Product Rate Last week Change
30-year fixed refi 3.07% 2.99% +0.08
15-year fixed refi 2.37% 2.30% +0.07
10-year fixed refi 2.33% 2.33% N/C

Rates as of Aug. 31, 2021.

How to shop for refinance rates

When searching for refinance rates online, it’s important to remember that your specific financial situation will influence the rate you’re offered. Your interest rate will be influenced by market conditions as well as your credit history and application.

Having a high credit score, a low credit utilization ratio and a history of consistent and on-time payments will generally help you get the best interest rates. To get your personalized refinance rates, you’ll need to speak with a mortgage professional, as the rates you qualify for may differ from the rates advertised online. And don’t forget about fees and closing costs, which may add a hefty sum upfront.

It’s also worth noting that in recent months, lenders have been stricter with their requirements. This means that if you don’t have great credit ratings, you might not be able to take advantage of lowered interest rates — or qualify for a refinance in the first place.

One way to get the best refinance rates is to strengthen your borrower application. You can do that by monitoring your credit, taking on debt responsibly and getting your finances in order before applying for a refinance. You should also shop around with multiple lenders and compare offers to make sure you’re getting the best rate.

When should I refinance?

Most people refinance because the market interest rates are lower than their current rates or because they want to change their loan term. It’s true that in the past year, interest rates have been at a historic low. But when deciding whether to refinance, be sure to take into account other factors besides market interest rates.

A refinance may not always make financial sense. Consider your personal goals and financial circumstances. How long do you plan on staying in your home? Are you refinancing to decrease your monthly payment, pay off your house sooner or for a combination of reasons? Also keep in mind that closing costs and other fees may require an upfront investment.

Note that some lenders have tightened their requirements since the beginning of the pandemic. If you don’t have a solid credit score, you may not qualify for the best rate. If you can get a lower interest rate or pay off your loan sooner, refinancing can be a great move. But carefully weigh the pros and cons first to make sure it’s a good fit for your situation.

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