Refinance Rates for July 20, 2023: Rate Advances – CNET [CNET]

Refinance rates were mixed, but one key rate climbed this week. Though refinance rates change daily, experts expect rates to continue to climb.

The national rate average for a 15-year fixed refinance slumped this week, while 30-year fixed-rate refinances went up. The average rate on 10-year fixed refinance stayed the same.

At the start of the pandemic, refinance rates hit a historic low. But in early 2022, the Federal Reserve began hiking interest rates in an effort to curb high inflation. While the Fed doesn’t directly set mortgage rates, its series of rate hikes has led to an increased cost of borrowing among most consumer loan products, including mortgages and refinances.

After more than a year of aggressive rate increases, though, the central bank opted to skip a rate hike on June 14. The Fed has signaled that it will use this pause as an opportunity to study incoming economic data, but is not ruling out additional rate increases in the future. The Fed’s next meeting to decide is scheduled for July 26.

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Current Mortgage Rates for July 2023

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 features partner rates from lenders that you can use when comparing multiple refinance rates.

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If inflation continues to decline and the Fed is able to hold rates steady — and eventually cut them in 2024 — mortgage rates should see some relief.

“Rates are getting to a point of being steady,” said Kevin Williams, founder of Full Life Financial Planning. “So it’s more of a question of how long it will take for rates to start ticking back down and when inflation will return to a place where your dollar starts buying a bit more each month,” he added.

But a return of rates in the 2% to 3% range is unlikely. Unless you purchased a house within the past year, it’s unlikely you can save money by refinancing to a mortgage with a lower rate.

Regardless of where rates are headed, homeowners shouldn’t focus on timing the market, and should instead decide if refinancing makes sense for their financial situation. As long as you can get a lower interest rate than your current one, refinancing will likely save you money. Do the math to see if it makes sense for your current finances and goals. If you decide to refinance, make sure you compare rates, fees and the annual percentage rate, or APR, — which shows the total cost of borrowing — from different lenders to find the best deal.

30-year fixed-rate refinance

The current average interest rate for a 30-year refinance is 7.35%, an increase of 1 basis point over this time last week. (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. Because of this, a 30-year refinance can be a good idea if you’re having trouble making your monthly payments. However, interest rates for a 30-year refinance will typically be higher than rates for a 10- or 15-year refinance. It’ll also take you longer to pay off your loan.

15-year fixed-rate refinance

The current average interest rate for 15-year refinances is 6.59%, a decrease of 3 basis point over last 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 average 10-year fixed refinance rate right now is 6.67%, unmoved compared to one week ago. A 10-year refinance will typically feature the highest monthly payment of all refinance terms, but the lowest interest rate. A 10-year refinance can help you pay off your house much quicker and save on interest. However, you should analyze your budget and current financial situation to make sure you’ll be able to afford the higher monthly payment.

Where rates are headed

Mortgage rates hit a 20-year high in late 2022, but now the macroeconomic environment is changing again. Rates dropped significantly in January before climbing back up in February. Since the start of the summer, mortgage rates have been fluctuating between 6.5% and 7%.

Even though the Fed hit pause on rate hikes, mortgage interest rates will continue to fluctuate on a daily basis. That’s because mortgage rates aren’t directly tied to the federal funds rate. Mortgage rates respond to a variety of economic factors, including inflation, employment and the outlook for the economy more broadly.

The most recent Consumer Price Index shows annual inflation was at 3.0% for the 12-month period ended in June, down sharply from May’s 4.0% figure.

“With the backdrop of easing inflation pressures, we should see more consistent declines in mortgage rates as the year progresses, particularly if the economy and labor market slow noticeably,” said Greg McBride, CFA and chief financial analyst at Bankrate, CNET’s sister site.

The central bank is unlikely to cut rates any time soon, but positive signaling from the central bank and cooling inflation may ease some of the upward pressure on mortgage rates.

We track refinance rate trends using information collected by Bankrate. Here’s a table with the average refinance rates supplied by lenders across the US:

Average refinance interest rates

Product	Rate	A week ago	Change
30-year fixed refi	7.35%	7.34%	+0.01
15-year fixed refi	6.59%	6.62%	-0.03
10-year fixed refi	6.67%	6.67%	N/C

Rates as of July 20, 2023.

How to find personalized refinance rates

It’s important to understand that the rates advertised online often require specific conditions for eligibility. Your 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. You can 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. To get the best refinance rates, you’ll first want to make your application as strong as possible. The best way to improve your credit ratings is to get your finances in order, use credit responsibly and monitor your credit regularly. Don’t forget to speak with multiple lenders and shop around.

Refinancing can be a great move if you get a good rate or can pay off your loan sooner — but consider carefully whether it’s the right choice for you at the moment.

When to consider a mortgage refinance

In order for a refinance to make sense, you’ll generally want to get a lower interest rate than your current rate. Aside from interest rates, changing your loan term is another reason to refinance. When deciding whether to refinance, be sure to take into account other factors besides market interest rates, including how long you plan to stay in your current home, the length of your loan term and the amount of your monthly payment. And don’t forget about fees and closing costs, which can add up.

As interest rates increased throughout 2022, the pool of refinancing applicants contracted. If you bought your house when interest rates were lower than they are today, there may not be a financial benefit in refinancing your mortgage.