May 19, 2024
Mortgage

December 21, 2023—Rates Advance Higher – Forbes Advisor


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The rate on a 30-year fixed refinance inched up today.

Refinancing rates for 30-year, fixed-mortgage is averaging 7.22%, according to Curinos. For 15-year fixed mortgages, the average refinance rate is 6.35%, and for 20-year mortgages, the average is 7.02%.

Related: Compare Current Refinance Rates

Refinance Rates for December 21, 2023

30-Year Fixed Refinance Interest Rates

Currently, the average rate for a 30-year, fixed-rate mortgage refinance is 7.22%. That’s compared to 7.48% last week. Borrowers with a 30-year, fixed-rate mortgage of $100,000 will pay $680 per month for principal and interest at the current interest rate of 7.22%, according to the Forbes Advisor mortgage calculator, not including taxes and fees.

Over the life of the loan, the borrower will pay total interest costs of about $144,754. A different way of looking at interest rates is the annual percentage rate, or APR. For a 30-year, fixed-rate mortgage, the APR is 7.29% compared to 7.54% last week. The APR is essentially the all-in cost of the home loan.

20-Year Fixed-Rate Mortgage Refinance Rates

The 20-year fixed mortgage refinance is currently averaging about 7.02%. That’s compared to the average of 7.26% at this time last week.

The APR, or annual percentage rate, on a 20-year fixed mortgage is 7.07% compared to 7.33% at this time last week.

At the current interest rate of 7.02%, a 20-year, fixed-rate mortgage refinance of $100,000 would pay $777 per month in principal and interest. That doesn’t include taxes and fees. That borrower would pay roughly $86,403 in total interest over the life of the loan.

15-Year Refinance Rates

The average interest rate on the 15-year fixed refinance mortgage increased to 6.35%. Yesterday, it was 6.31%. This same time last week, the 15-year fixed-rate mortgage was at 6.63%.

On a 15-year fixed refinance, the annual percentage rate is 6.35%. Last week it was 6.61%.

With an interest rate of 6.35%, you would pay $863 per month in principal and interest for every $100,000 borrowed. Over the life of the loan, you would pay $55,299 in total interest.

30-Year Jumbo Mortgage Refinance Rates

The average interest rate on the 30-year fixed-rate jumbo mortgage refinance is 7.22%. Last week, the average rate was 7.45%.

Borrowers with a 30-year fixed-rate jumbo mortgage refinance with today’s interest rate of 7.22% will pay $680 per month in principal and interest per $100,000.

15-Year Jumbo Refi Rates

The average interest rate on the 15-year fixed-rate jumbo mortgage refinance rose to 6.90%. Last week, the average rate was 7.10%.

Borrowers with a 15-year fixed-rate jumbo mortgage refinance with today’s interest rate of 6.90% will pay $893 per month in principal and interest per $100,000. That means that on a $750,000 loan, you’d pay around $455,808 in total interest over the life of the loan.

Are Refinance Rates and Mortgage Rates the Same?

Mortgage lenders charge different interest rates for purchase and refinance loans. Current refinance rates are typically 0.01% to 0.15% higher for a 30-year fixed rate versus a purchase loan.

You can reduce your interest rate by paying your closing costs up front instead of rolling them into the loan with a no-closing-cost refinance loan. Buying discount points and avoiding mortgage insurance can also help.

When You Should Refinance Your Home

There are lots of good reasons to  refinance your mortgage, but for most homeowners, it comes down to lowering the interest rate, reducing monthly payments or paying off the loan more quickly. Refinancing can also allow you to tap some of your home’s equity or eliminate private mortgage insurance (PMI).

It’s important to keep in mind that refinancing carries costs, and for that reason makes more sense if you plan to stay in your home for some time. It can be helpful to calculate the “break-even point” for a potential refinance—to see how long it will take for savings from the new mortgage to outweigh closing costs. Try to find out what those fees will be and divide them by the monthly savings from the new mortgage.

Check out our mortgage refinance calculator to help you decide if this is a good time to refinance.

Is Now a Good Time To Refinance?

Refinancing your mortgage can be worth it for reasons that include:

  • Lowering monthly payments. You might be able to reduce your monthly payment by extending your repayment period or qualifying for a better interest rate.
  • Reducing your interest rate. Switching from a 30-year mortgage to a shorter term, like 15 or 20 years, can help you get a better interest rate and pay less interest overall.
  • Ending annual service fees. FHA and USDA loans can charge annual fees for the life of the loan. If you have at least 20% equity, converting to a conventional mortgage refinance lets you avoid mortgage insurance premiums and guarantee fees.
  • Switching to a fixed interest rate. You may also refinance an adjustable-rate mortgage into a fixed interest rate to avoid future rate hikes that increase your monthly payment and total borrowing costs.
  • Borrowing your home equity: A cash-out refinance allows you to tap your home equity to consolidate high-interest debt and pay for personal expenses. The mortgage refinance interest rate can be lower than unsecured personal loans.

Lenders offer multiple mortgage refinance options to help you quickly compare your potential rate and monthly payment. Refinancing can also provide more repayment flexibility.Now isn’t a good time to refinance if you cannot get a smaller monthly payment or the closing costs offset the potential benefits of having a new rate and term.How to Get Today’s Best Refinance RatesRefinancing a mortgage isn’t that different than taking out a mortgage in the first place, and it’s always smart to have a strategy for finding the lowest rate possible. Here are some suggested approaches to get the best rate:

Polish up your credit score

  • Lower your debt-to-income ratio
  • Keep an eye on mortgage rates
  • Consider a shorter loan

Having a strong credit score is one of the best things you can do to get approved and get a lower rate. You’re also likely to look better to lenders if you don’t have too much debt relative to your income. You should keep a regular watch on mortgage rates, which fluctuate often. Also see if you can manage a mortgage payment for a shorter loan term since they usually have lower interest rates.

Frequently Asked Questions (FAQs)

How quickly can you refinance a mortgage?

You can usually refinance a mortgage in as quickly as 45 to 60 days, but it depends on many factors—like the type of home loan you choose. Always check with your lender before committing to borrow.

How much does it cost to refinance a mortgage?

It can cost as much as 2% to 6% of the full cost of the loan to refinance a mortgage. Make sure to find out the exact closing costs from your lender.

How do you find the best refinancing lender?

You should always shop around when you’re trying to get a new mortgage or refinance an existing one. Take a look at the best mortgage refinance lenders as a starting point and try applying online. Always find out the closing costs each lender will charge, and make sure you’re able to communicate well with the lender you want to choose. In a bumpy housing market, you’ll probably be in touch with the lender more often than you realize.



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