Mortgage Refinance Rates Fall: Mortgage Refinance Rates for May 15, 2024

Mortgage Refinance Rates Fall: Mortgage Refinance Rates for May 15, 2024

Today's average refinance rate

Today's Average Mortgage Rates in May 15, 2024, compared to a week ago. We use rate data collected by Bankrate as reported by lenders across the United States.

Mortgage refinance rates change every day. Experts recommend shopping around to make sure you're getting the lowest rate. By entering your information below, you can get a custom quote from one of CNET's partner lenders.

About these rates: Like CNET, Bankrate is owned by Red Ventures. This tool includes lender partner rates that you can use when comparing multiple mortgage rates.

The majority of American homeowners already have mortgages with rates below 6%. As mortgage refinance rates have averaged above 6.5% over the past several months, households are choosing to keep their existing mortgages rather than replace them with new home loans.

If rates fall to 6 percent, at least a third of borrowers who took out a mortgage in 2023 could lower their rate by a full percentage point by refinancing. Black Knight.

If your rate is above 8%, refinancing may make sense in today's market. Logan Mohteshmi., lead analyst at Housing Wire. “However, as with all refinancing options, it is a personal financial choice because there are costs associated with the loan process,” he said.

What to expect from refinance rates this year

Mortgage rates have skyrocketed over the past two years, largely as a result of the Federal Reserve's aggressive effort to control inflation by raising interest rates. Experts say lower inflation and the Fed's expected rate cut could help stabilize mortgage rates through late 2024. But the timing of the Fed's cuts will depend on upcoming economic data and market reactions.

For homeowners looking to refinance, remember that you can't time the economy: Interest rates fluctuate on an hourly, daily and weekly basis, and are affected by an array of factors. Your best course of action is to keep an eye on the daily rate changes and create a game plan on how to take advantage of a substantial percentage drop. Matt Graham of Mortgage News Daily.

What does it mean to refinance?

When you refinance your mortgage, you take out another home loan that pays off your original mortgage. With a traditional refinance, your new home loan term and/or interest rate will vary. With a cash-out refinance, you'll tap into your equity with a new loan that's larger than your current mortgage balance, allowing you to pocket the difference in cash.

Refinancing can be a great financial move if you score a low rate or can pay off your home loan in less time, but consider whether it's the right choice for you. Lowering your interest rate by 1% or more is an incentive to refinance, allowing you to significantly lower your monthly payment.

How to choose the right type and term of refinance

Rates advertised online often require specific eligibility requirements. Your personal interest rate will be affected by market conditions as well as your specific credit history, financial profile and application. A high credit score, low credit utilization ratio and a history of consistent and on-time payments will usually help you get the best interest rate.

30-year fixed rate refinance

The average 30-year fixed refinance rate is currently 7.22%, down 5 basis points from what we saw a week ago. (The basis point is equal to 0.01%.) A 30-year fixed refinance will typically have lower monthly payments than a 15-year or 10-year refinance, but it will take you longer to pay off and you'll typically have Interest will cost more. over the long term.

15-year fixed rate refinance

The current average interest rate for a 15-year refinance is 6.75%, down 2 basis points from a week ago. Although a 15-year fixed refinance will most likely increase your monthly payment compared to a 30-year loan, you'll save more money over time because you're paying off your loan sooner. Also, 15-year refinance rates are typically lower than 30-year refinance rates, which will help you save more in the long run.

10 Year Fixed Rate Refinance

The average rate for a 10-year fixed refinance loan is currently 6.80%, up 4 basis points from last week. A 10-year refinance typically has the lowest interest rate but the highest monthly payment of all refinance terms. A 10-year refinance can help you pay off your home much faster and save on interest, but make sure you can afford the higher monthly payments.

To get the best refinance rates, maximize your application by getting your finances in order, using credit responsibly and monitoring your credit regularly. And don't forget to talk to multiple lenders and shop around.

Reasons for Refinance

Homeowners usually refinance to save money, but there are. Other reasons to do so. The most common reasons homeowners refinance are:

  • To get a lower interest rate: If you can secure a rate that is at least 1% lower than the rate on your current mortgage, it may make sense to refinance.
  • To change the mortgage type: If you have an adjustable rate mortgage and want more security, you can refinance to a fixed rate mortgage.
  • To terminate mortgage insurance: If you have an FHA loan that requires mortgage insurance, you can refinance to a conventional loan after you have 20% equity.
  • To change the length of the loan term: Refinancing the loan to a longer term can lower your monthly payment. Short-term refinancing will save your interest in the long run.
  • To tap into your equity through a cash-out refinance: If you replace your mortgage with a larger loan, you can get the difference in cash to cover larger expenses.
  • To foreclose on someone: In case of divorce, you can apply for a new home loan in your name only and use the funds to pay off your existing mortgage.
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