May 6, 2024—Rates Decline – Forbes Advisor

The rate on a 30-year fixed refinance fell today.

The average rate for refinancing a 30-year fixed mortgage is currently 7.65%, according to Curinos. For refinancing a 15-year mortgage, the average rate is 6.73%, and for 20-year mortgages, it’s 7.48%.

Related: Compare Current Refinance Rates

Refinance Rates for May 6, 2024

30-Year Fixed Refinance Interest Rates

Currently, the average rate for a 30-year, fixed-rate mortgage refinance is 7.65%. That’s compared to 7.79% last week. Borrowers with a 30-year, fixed-rate mortgage of $100,000 will pay $710 per month for principal and interest at the current interest rate of 7.65%, 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 $155,475. 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 7.67% compared to 7.81% last week. The APR is essentially the all-in cost of the home loan.

20-Year Refinance Interest Rates

For a 20-year fixed refinance mortgage, the average interest rate is currently 7.48% compared to 7.65% at this time last week.

The APR, or annual percentage rate, on a 20-year fixed mortgage is 7.50%. That compares to 7.67% at the same time last week.

At today’s interest rate of 7.48%, a 20-year, fixed-rate mortgage refinance of $100,000 would cost $804 per month in principal and interest—not including taxes and fees. That would equal about $93,020 in total interest over the life of the loan.

15-Year Refinance Interest Rates

For a 15-year fixed refinance mortgage, the average interest rate is currently 6.73% compared to 6.95% at this time last week.

The APR, or annual percentage rate, on a 15-year fixed mortgage is 6.76%. That compares to 6.98% at this time last week.

Using the current interest rate of 6.73%, a 15-year, fixed-rate mortgage refinance of $100,000 would cost $884 per month in principal and interest—not including taxes and fees. That would equal about $59,094 in total interest over the life of the loan.

30-Year Jumbo Refinance Interest Rates

The average interest rate for a 30-year, fixed-rate jumbo mortgage refinance is 7.51%. Last week, the average rate was 7.78%.

Borrowers with a 30-year, fixed-rate jumbo mortgage refinance with today’s interest rate of 7.51% will pay $700 per month in principal and interest on a $100,000 loan.

15-Year Jumbo Refinance Interest Rates

A 15-year, fixed-rate jumbo mortgage refinance is 7.39%, on average, compared to the average of 7.29% last week.

At today’s interest rate of 7.39%, a borrower with a 15-year, fixed-rate jumbo refinance would pay $6,904 per month in principal and interest on a $750,000 loan. Over the life of the loan, that borrower would pay around $492,661 in total interest.

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 Refinancing Makes Sense

Refinancing your mortgage can be a wise move for many reasons, most notably lowering your interest rate or your monthly payments. It can also help you pay down your mortgage sooner, access your home’s equity or get rid of private mortgage insurance (PMI).

But there are closing costs associated with refinancing, so it probably makes more sense to refinance if you know you’ll be keeping your home for some time. You can determine the “break-even point” for a potential refinance, or how long it will take for savings from a new mortgage to surpass any closing costs. Find out what those costs will be and divide them by the monthly savings you’ll realize with the new mortgage.

The Forbes Advisor mortgage refinance calculator can help you run the numbers to see if it’s a good time for you to refinance.

Is Now a Good Time To Refinance?

Consider refinancing your mortgage when you need a more affordable monthly payment, want to stop paying annual FHA or USDA loan fees or would prefer a fixed interest rate. You may also consider a cash-out refinance to borrow from your home equity.

However, as refinance rates have increased by several percentage points from near-term lows in late 2021, it can be harder to replace your existing interest rate with a lower one, unless you refinance to a 15-year mortgage. As a result, extending your loan term is the one way to reduce your payment, but you can end up paying more total interest.

The application process is similar to buying a home. Plus, home appraisal fees and closing costs from 2% to 6% of the loan amount apply and add to your lifetime borrowing costs.

How To Get Today’s Best Refinance Rates

Just like when you took out your original mortgage, it pays to have a strategy for finding the lowest rate when you want to refinance. Here’s what you should be doing get a good mortgage rate:

• Improve your credit
• Consider a shorter loan term
• Lower your debt-to-income ratio
• Watch mortgage rates

There are no guarantees when it comes to borrowing, but a strong credit score is one of the best things you can do to present yourself to lenders. Banks and other financial institutions are more likely to approve you if you don’t have too much debt relative to your income. You should check in on mortgage rates, which fluctuate frequently, on a regular basis. And use calculators like ours to see if you can swing a home loan that’s shorter in duration than the popular 30-year mortgage. These loans usually have lower interest rates.

Frequently Asked Questions (FAQs)