Lower Refi Rates for Homeowners: Mortgage Refinance Rates for Aug. 2, 2024 [CNET]

Multiple benchmark refinance rates have decreased. Refinance rates change daily, but experts say rates will stabilize in the coming months.

Today’s average refinance rates

30-year fixed-rate	6.77%	(-0.08)
15-year fixed-rate	6.21%	(-0.06)
30-year fixed-rate jumbo	6.90%	(-0.07)
5/1 ARM	6.48%	(-0.02)
10-year fixed-rate	6.12%	(-0.04)
30-year fixed-rate refinance	6.78%	(-0.07)
15-year fixed-rate refinance	6.25%	(-0.05)
10-year fixed refinance	6.15%	(-0.05)

Today’s average mortgage rates on Aug. 02, 2024, compared with one week ago. We use rate data collected by Bankrate as reported by lenders across the US.

See all of today’s mortgage rates

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The Federal Reserve could cut interest rates this fall, which will have a bearing on mortgage rates. To see how much house you can afford, enter your information below and get a custom mortgage loan quote from one of CNET’s partner lenders.

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

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Today’s refinance rate trends

Following cooling inflation reports and weakening jobs data, mortgage refinance rates have been slowly dropping. Still, the majority of homeowners currently have mortgage rates well below 6%, meaning the financial incentive to refinance simply isn’t there yet.

But there’s always an exception to the rule: If you purchased a house when mortgage rates were above 8% late last year, the recent dip in rates might be enticing enough for you to consider refinancing.

While experts don’t anticipate another refinancing boom like we saw in 2020 and 2021 when mortgage rates hit historic lows, it’s a positive sign that rates are tending to move downward or sideways instead of soaring up.

What to expect from refinance rates this year

Experts say slowing inflation and the Federal Reserve’s projected interest rate cuts should help push mortgage interest rates down to around 6.5% by the end of 2024. But a lot could happen between now and then.

The Fed hasn’t adjusted its short-term interest rate, the federal funds rate, since last summer, and a rate cut now appears imminent, possibly as soon as September, according to Melissa Cohn, regional vice president of William Raveis Mortgage and member of CNET Money’s expert review board.

As the Fed slowly lowers interest rates over the coming years, mortgage rates should moderate gradually. But if the Fed chooses to delay rate cuts or if economic data shows inflation reigniting, mortgage rates will likely move higher.

If you’re considering a refinance, remember that you can’t time the economy: Interest rates fluctuate on an hourly, daily and weekly basis, and are influenced by an array of factors. Your best move is to keep an eye on day-to-day rate changes and have a game plan on how to capitalize on a big enough percentage drop, said 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 initial mortgage. With a traditional refinance, your new home loan will have a different term and/or interest rate. With a cash-out refinance, you’ll tap into your equity with a new loan that’s bigger than your existing 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. Reducing your interest rate by 1% or more is an incentive to refinance, allowing you to cut your monthly payment significantly.

How to select the right refinance type and term

The rates advertised online often require specific conditions for eligibility. Your personal interest rate will be influenced by market conditions as well as your specific credit history, financial profile 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.

30-year fixed-rate refinance

The average 30-year fixed refinance rate right now is 6.78%, a decrease of 7 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 15-year or 10-year refinance, but it will take you longer to pay off and typically cost you more in interest over the long term.

15-year fixed-rate refinance

The average 15-year fixed refinance rate right now is 6.25%, a decrease of 5 basis points from what we saw the previous week. Though a 15-year fixed refinance will most likely raise your monthly payment compared to a 30-year loan, you’ll save more money over time because you’re paying off your loan quicker. 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 current average interest rate for a 10-year refinance is 6.15%, a decrease of 5 basis points from what we saw the previous 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 house much quicker and save on interest, but make sure you can afford the steeper monthly payment.

To get the best refinance rates, make your application as strong as possible by getting your finances in order, using credit responsibly and monitoring your credit regularly. And don’t forget to speak with multiple lenders and shop around.

Reasons you might refinance your home

Homeowners usually refinance to save money, but there are other reasons to do so. Here are the most common reasons homeowners refinance:

• To get a lower interest rate: If you can secure a rate that’s at least 1% lower than the one on your current mortgage, it could make sense to refinance.
• To switch the type of mortgage: If you have an adjustable-rate mortgage and want greater security, you could refinance to a fixed-rate mortgage.
• To eliminate mortgage insurance: If you have an FHA loan that requires mortgage insurance, you can refinance to a conventional loan once you have 20% equity.
• To change the length of a loan term: Refinancing to a longer loan term could lower your monthly payment. Refinancing to a shorter term will save you 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 receive the difference in cash to cover a large expense.
• To take someone off the mortgage: In case of divorce, you can apply for a new home loan in just your name and use the funds to pay off your existing mortgage.