Refi rates on Dec. 27, 2021: Rates dip – CNET [CNET]

A few benchmark refinance rates dropped today. Both 15-year fixed and 30-year fixed refinances saw their mean rates sink. At the same time, average rates for 10-year fixed refinances also trailed off. Although refinance rates are always moving, they have been quite low recently. If you plan to refinance your home, now might be an ideal time to lock in a good rate. But as always, make sure to first take into account your personal goals and circumstances before getting a refinance, and shop around to find a lender who can best meet your needs.

30-year fixed-rate refinance

For 30-year fixed refinances, the average rate is currently at 3.16%, a decrease of 5 basis points from what we saw one week ago. (A basis point is equivalent to 0.01%.) Refinancing to a 30-year fixed loan from a shorter loan term can lower your monthly payments. If you’re having difficulties making your monthly payments currently, a 30-year refinance could be a good option for you. Be aware, though, that interest rates will typically be higher compared to a 15-year or 10-year refinance, and you’ll pay off your loan at a slower rate.

15-year fixed-rate refinance

The current average interest rate for 15-year refinances is 2.45%, a decrease of 4 basis point compared to one week ago. With a 15-year fixed refinance, you’ll have a larger monthly payment than a 30-year loan. But you’ll save more money over time, because you’re paying off your loan quicker. Interest rates for a 15-year refinance also tend to be lower than that of a 30-year refinance, so you’ll save even more in the long run.

10-year fixed-rate refinance

The current average interest rate for a 10-year refinance is 2.43%, a decrease of 6 basis points from what we saw the previous week. You’ll pay more every month with a ten-year fixed refinance compared to a 30-year or 15-year refinance — but you’ll also have a lower interest rate. A 10-year refinance can help you pay off your house much faster and save on interest in the long run. Just be sure to carefully consider your budget and current financial situation to make sure that you can afford a higher monthly payment.

Where rates are headed

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

Average refinance interest rates

Rates as of Dec. 27, 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. Though current market conditions will be a factor, your particular interest rate will depend largely on your application and credit history.

To get the best interest rates, you’ll typically need a high credit score, low credit utilization ratio, and a history of making consistent and on-time payments. You can generally get a good feel for average interest rates online, but make sure to speak with a mortgage professional in order to see the specific rates you qualify for. You should also take into account any fees and closing costs that might offset the potential savings of a refinance.

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. If you haven’t already, try to improve your credit by monitoring your credit reports, using credit responsibly, and managing your finances carefully. Don’t forget to speak with multiple lenders and shop around to find the best rate.

When to consider a mortgage refinance

Most people refinance because the market interest rates are lower than their current rates or because they want to change their loan term. While interest rates have been low in the past few months, you should look at more than just the market interest rates when deciding if a refinance is right for you.

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? And don’t forget about fees and closing costs, which can add up.

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. Refinancing at a lower interest rate can save you money in the long run and help you pay off your loan sooner. But a careful cost-benefit analysis is necessary to confirm that doing so makes sense.