Key mortgage refinancing rates set to rise: refinancing rates for July 24, 2024

When mortgage rates start to drop, be ready to take advantage. Experts recommend shopping around and comparing multiple offers to get the lowest rate. Enter your information here to get a customized quote from one of CNET’s partner lenders.

About these rates: Like CNET, Bankrate is owned by Red Ventures. This tool includes partner rates from lenders that you can use when comparing multiple mortgage rates.

Current trends in refinancing rates

When mortgage rates hit historic lows during the pandemic, there was a refinancing boom because homeowners could get lower interest rates. But with current average mortgage rates hovering around 7%, getting a new mortgage isn’t financially feasible.

At the start of the year, expectations were high for a summer rate cut by the Fed. But inflation has remained high and the labor market strong in recent months, making it clear to investors that the Fed will take longer than expected to cut rates.

Higher mortgage rates make refinancing less attractive to homeowners, making them more likely to keep their existing mortgage.

What will refinancing rates be in 2024?

“There is a good chance that interest rates will be lower by the end of 2024 than they are now,” he said. Keith Gumbingervice president of the mortgage site, HSH.com. But it’s hard to predict exactly where mortgage rates will end up, because it depends on economic data that we don’t yet have.

If inflation continues to fall and the Fed can cut rates, mortgage refinancing rates could end the year between 6% and 6.5%.

But data showing higher inflation could prompt investors to reconsider the likelihood of Fed rate cuts and allow mortgage rates to rise, Orphe Divounguychief economist at Zillow Home Loans.

If you’re considering refinancing, remember that you can’t time the economy: Interest rates fluctuate by the hour, day and week, and are affected by a variety of factors. Your best move is to keep an eye on daily rate changes and have a plan in place to take advantage of a large enough percentage drop, he said. Matt Graham from Mortgage News Daily.

Refinancing 101

When you refinance your mortgage, you take out another mortgage that pays off your original mortgage. With traditional refinancing, your new mortgage has a different term and/or interest rate. With cash-out refinancing, you tap into your home equity with a new loan that is larger than your existing mortgage balance, allowing you to pocket the difference in cash.

Refinancing can be a great financial move if you get a low interest rate or can pay off your mortgage in less time, but consider whether it’s right for you. Lowering your interest rate by 1% or more is an incentive to refinance, which can significantly reduce your monthly payment.

How do you choose the right refinancing type and term?

The rates advertised online often require specific conditions to qualify. Your personal interest rate is affected by market conditions and your specific credit history, financial profile, and application. A high credit score, low credit utilization ratio, and a history of consistent and timely payments will generally help you get the best interest rates.

30-year fixed rate refinancing

The current average interest rate for a 30-year refinance is 6.88%, up 1 basis point from a week ago. (A basis point is equal to 0.01%). A 30-year fixed refinance typically has lower monthly payments than a 15- or 10-year refinance, but it takes longer to pay off the loan and will typically cost you more in interest in the long run.

15-year fixed rate refinancing

The average rate for a 15-year fixed refinance loan is currently 6.34%, down 9 basis points from last week. While a 15-year fixed refinance will likely increase your monthly payment compared to a 30-year loan, you’ll save more money over time because you’ll pay off your loan faster. Additionally, 15-year refinance rates are typically lower than 30-year refinance rates, which will help you save more in the long run.

10-year fixed rate refinancing

The average 10-year fixed refinance rate is now 6.29%, down 11 basis points from what we saw last week. A 10-year refinance typically has the lowest interest rate but the highest monthly payment of all the refinance terms. A 10-year refinance can help you pay off your home much faster and save on interest, but make sure you can afford the higher monthly payment.

To get the best refinance rates, make your application as strong as possible by getting your finances in order, being responsible with credit, and monitoring your credit regularly. And don’t forget to talk to multiple lenders and shop around.

When to Consider Mortgage Refinancing

Homeowners usually refinance to save money, but there are other reasons to do so as well. Here are the most common reasons why homeowners refinance:

• To get a lower interest rate: If you can get an interest rate that is at least 1% lower than the interest rate on your current mortgage, it may make sense to refinance.
• To change mortgage type: If you have a variable interest rate mortgage and want more security, you can transfer your mortgage to a fixed interest rate mortgage.
• To cancel mortgage insurance: If you have an FHA loan that requires mortgage insurance, you can refinance it to a conventional loan once you have 20% equity.
• To change the term of a loan: Refinancing to a longer term can lower your monthly payment. Refinancing to a shorter term will save you interest in the long run.
• To access your equity through a cash-out refinance: If you replace your mortgage with a larger loan, you can receive the difference in cash to cover a large expense.
• Taking someone off the mortgage: In the event of a divorce, you can apply for a new mortgage in your own name and use the money to pay off your existing mortgage.