If You’re Looking To Refinance Your Mortgage Rate, The Timing Just Couldn’t Be Better

Mortgage Rate
While shopping for a refinance requires the same process your initial loan involved such as maintaining a good credit score and lowering your debt-to-income ratio, the timing just couldn’t be better to lock-in some of the lowest rates seen in 30 years. File photo: ShutterStock.com, licensed.

DENVER, CO –  If you’ve been considering saving money by refinancing your mortgage, it may be the perfect time to act; according to Bankrate.com, while refinance rates rose on November 30, 2021, overall rates are at near-historic lows, which could enable consumers to lock-in some of the lowest rates seen in 30 years.

While refinance interest rates can ebb and flow frequently, rates overall have been very low; this would be an ideal time, as a result, for those looking to refinance their house to get a good rate. However, before getting a refinance, it’s always wise to do your research and make sure this is a good move for your individual finances. In addition, it’s also important to find a lender that is a good fit for your personal circumstances, yet while this is so for most situations, the timing just couldn’t be better.

30-Year Refinance Rates

As of today, the average rate on a 30-year fixed home loan refinance is 3.24 percent, which represents a minor increase over last week, when it was 3.19 percent; the lowest it’s been in the last 52 weeks was 3.01 percent.

The annual percentage rate (APR), which is the overall cost of your loan’s interest rate and finance charges, is currently 3.23 percent, which is also a small increase over last week.

For example, with a 3.24 percent interest rate, a $100,000 refinance of a 30-year fixed mortgage would pay $435 monthly in principal and interest, not including fees and taxes; overall interest over the life of the loan would come to $56,477.

20-Year Refinance Rates

The average rate on a 20-year home loan refinance is 3.08 percent as of November 30, which represents a small increase from last week, when the rate was at 3.03 percent; the APR is currently 3.16 percent, compared to 3.12 percent last week. The 52-week low was 2.85 percent.

A refinance of a $100,000 on a 20-year fixed-rate home loan with November 30’s interest rate would cost $559 monthly in principal and interest, not including taxes and fees; overall, you would pay $34,067 in interest over the life of the loan.

15-Year Fixed Refinance Rates

On a 15-year fixed-rate mortgage refinance, today’s interest rate is 2.53 percent, which is a bump from last week’s rate of 2.51 percent and higher that its 52-week low of 2.31 percent. The APR today on a 15-year fixed refinance is 2.67 percent, which is the exact same number as last week.

A refinance of a $100,000 on a 15-year fixed-rate home loan at today’s interest rate would cost $668 monthly in principal and interest, with taxes and fees not included; overall, you would pay $20,276 in interest over the life of the loan.

5/1 ARM Refinance Rates

On a 5/1 ARM – which is a mortgage loan with a fixed interest rate for the first 5 years that then switches to an adjustable interest rate for the remainder of its term – today’s average rate held firm from last week, when it was 2.86 percent, and that number is the rate’s highest point in the last 52 weeks.

Those with a $100,000 5/1 ARM with the current interest rate of 2.86 percent would pay $414 monthly in principal and interest, not including fees and taxes.

When to Refinance Your Home

Refinancing your home can be a good idea if you intend to reside there for a number of years, since it will take some time to recoup the loan’s closing costs until you break even, which would be the point where your savings from a lower interest rate become greater then your closing costs.

How to Get the Best Refinance Rates

What to do to get the best refinance rates is very similar to what you initially did, or should have been doing, when you were shopping around for your home loan to begin with, including maintaining a good credit score, lowering your debt-to-income ratio, and keeping an eye on mortgage rates for various loan terms, which tend to fluctuate often.

Refinancing is a great idea if you want to take advantage of market interest rates that are lower than the rate on your current home, or if you are looking to change your loan term. And while interest rates have been historically low over the course of the past year, it’s also important to take into account closing costs and fees when considering getting a refinance, which can unexpectedly add up. Some lenders have also adopted more stringent loan requirements recently, but if you qualify for a refinance and the circumstances are right, it can be a great thing to do for your financial bottom line.

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