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For borrowers considering a refinance, getting a good mortgage rate is vital. Refinancing your mortgage isn’t cheap, but getting a low rate can help you earn back what you spend, in addition to freeing up space in your monthly budget for other financial goals.
The exact rates available to you will depend on your individual financial situation as well as what the mortgage lenders you apply with can offer you. To ensure you’re getting a good deal, check out today’s average 30-year refinance rates.
Current 30-year refinance rates
In June, 30-year refinance rates averaged around 6.75%, according to Zillow data. This is 10 basis points higher than they were the month before.
Though rates increased somewhat in the previous month, they’re expected to drop this year as inflation slows and the Federal Reserve is able to pull back from its aggressive hikes to the federal funds rate. Borrowers who initially got their mortgages when rates were at their peak may soon have an opportunity to refinance into a lower monthly payment.
Compare today’s 30-year refinance rates
See how the latest 30-year refinance rates compare to other types of mortgage refinance loans.
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Pros and cons: 30-year fixed-rate refinance
Pros
- Lower monthly payments. If you have less than 30 years left on your current mortgage, you could potentially lower your monthly mortgage payment by a significant amount when you refinance into a 30-year term.
- Predictable payments. Unlike adjustable-rate mortgages, fixed-rate mortgages keep your rate the same for the entire life of the loan, meaning your monthly payment won’t change (other than adjustments for taxes or insurance).
- Flexibility. If you want a shorter term but aren’t sure you can handle a higher monthly payment, you can always get a 30-year refinance and treat it like a shorter-term mortgage. This way you can pay more toward your principal when you have extra cash, but you’ll still have a lower payment just in case you need to use that money elsewhere.
“Almost all 30-years can be paid off early, and any additional payments you make over your monthly obligation can be directed toward principal only,” says Shawn O’Regan, a real estate broker and owner of Vee Real Estate Brokers in Raleigh, North Carolina. “So you can quickly reduce you loan balance and interest, since interest is calculated monthly based on the remaining balance.”
Cons
- Higher rates. Longer mortgage terms come with higher interest rates than shorter terms.
- Pay more in interest. The longer it takes you to pay off your mortgage, the more you’ll pay in interest. If you’re refinancing from a shorter term into a 30-year mortgage, you’ll probably be significantly increasing the amount you’ll pay over the life of the loan.
Is it a good time to refinance into a 30-year fixed-rate mortgage?
Whether or not it’s a good time to refinance depends on your current rate and if it’s higher or lower than today’s average rates.
For most borrowers, now probably isn’t an ideal time to refinance. Many homeowners already have mortgage rates that are significantly lower than current rates, so refinancing likely wouldn’t save them any money.
Should I get a 30-year fixed-rate refinance?
If you’re considering a refinance, it’s important to think about your goals.
Typically, homeowners refinance when they want to decrease their monthly payment, lower their interest rate, or take cash out of their home. But doing so is only worth it if the benefits outweigh the costs.
Because you’ll pay closing costs, it can cost a couple thousand dollars or more to refinance. If you plan to move soon or you can’t get a lower rate, it could be difficult or impossible for you to recoup the cost of refinancing.
How to find a low 30-year refinance rate
You don’t necessarily need to work with your current lender when you refinance. The best thing you can do to ensure you get a low refinance rate is get preapproved with at least two or three mortgage lenders to compare offers.
Additionally, if you have room to improve your credit, doing things like paying down debt can help boost your score and get you a better rate.
Mortgage calculator
Use Insider’s free mortgage calculator to see how a lower rate could impact your monthly payment.
Mortgage Calculator
$1,161
Your estimated monthly payment
- Paying a 25% higher down payment would save you $8,916.08 on interest charges
- Lowering the interest rate by 1% would save you $51,562.03
- Paying an additional $500 each month would reduce the loan length by 146 months
Frequently asked questions about 30-year refinances
Mortgage rates fluctuate from day to day, and even hour to hour. To see the most up-to-date 30-year refinance rates, scroll up to “Compare today’s 30-year refinance rates.”
Refinance rates are still relatively high, so now might not be the best time to refinance, especially if you currently have a low rate. If you’re hoping to refinance soon, you might have better luck later this year, when rates are expected to drop.
Average 30-year mortgage rates have been somewhat volatile so far this year, and they’re currently higher than they have been in recent months. Rates are expected to fall later this year as inflation slows.
Source link: https://www.businessinsider.com/personal-finance/30-year-refinance-rates
