Both 15-year and 30-year fixed refinances saw an upward trend in average interest rates this week. Average interest rates for 10-year fixed loans also increased slightly.
At the beginning of the pandemic, refinancing rates reached an all-time low. But in early 2022, the Federal Reserve began raising interest rates to curb high inflation. Although the Fed doesn’t set mortgage rates directly, its series of rate hikes has caused the cost of borrowing to rise for most consumer credit products, including mortgages and refinancing.
However, after more than a year of aggressive rate hikes, the central bank decided not to hike rates on June 14th. The Fed has signaled that it will use this pause as an opportunity to review incoming economic data, but is not ruling out further rate hikes in the future. The Fed’s next decision-making meeting is scheduled for July 26.
Current mortgage rates for July 2023
Mortgage refinancing rates change daily. Experts recommend shopping around to make sure you’re getting the lowest price. By entering your information below, you may receive a customized quote from one of CNET’s partner lenders.
For these tariffs: Bankrate, like CNET, is owned by Red Ventures. This tool offers partner interest rates from lenders that you can use when comparing multiple refinance rates.
If inflation continues to fall and the Fed manages to keep interest rates stable — and eventually cut them in 2024 — mortgage rates should ease somewhat.
“Interest rates are set to remain stable,” said Kevin Williams, founder of Full Life Financial Planning. “So it’s more of a question of how long it will take for rates to come back down and when inflation will get back to levels where the dollar is buying a little more every month,” he added.
However, a return in interest rates in the 2% to 3% range is unlikely. Unless you’ve bought a home within the last year, it’s unlikely that refinancing a mortgage with a lower interest rate will save you money.
Regardless of which way interest rates are going, homeowners shouldn’t focus on market timing, but instead should be deciding whether refinancing makes sense for their financial situation. As long as you can get a lower interest rate than your current one, refinancing will likely save you money. Do the math to see if it makes sense for your current finances and goals. When you decide to refinance, be sure to compare interest rates, fees, and the annual percentage rate (APR) — which reflects the total cost of borrowing — from different lenders to find the best deal.
30-year fixed rate refinance
For 30-year fixed refinance, the average rate currently stands at 7.34%, up 1 basis point from a week ago. (One basis point equals 0.01%.) Refinancing to a 30-year fixed rate loan from a shorter loan term can lower your monthly payments. This makes 30-year refinances a good solution for people who are struggling to make their monthly payments or just want a little more wiggle room. However, keep in mind that compared to a 10- or 15-year refinance, interest rates are usually higher and you’ll be slower to pay back your loan.
15-year fixed rate refinance
The average interest rate on a 15-year fixed refinance loan is currently 6.63%, up 6 basis points from last week’s reading. A 15-year fixed refinance pays you a higher monthly rate than a 30-year loan. However, you can also repay your loan faster and save money over the term of the loan. You also typically get lower interest rates compared to a 30-year loan. This can save you even more in the long run.
10-year fixed rate refinance
The average 10-year fixed refinancing rate is currently 6.73%, up 1 basis point from last week. With a 10-year fixed refinance, you’ll pay more every month than with a 15- or 30-year refinance — but you’ll also have a lower interest rate. A 10-year refinance can be a good deal because paying off your home earlier will help you save on interest in the long run. Just remember to carefully consider your budget and current financial situation to ensure you can afford a higher monthly payment.
Where are prices going
Mortgage rates hit a 20-year high in late 2022, but now the macro environment is changing again. Interest rates fell significantly in January before rising again in February. Mortgage rates have fluctuated between 6.5% and 7% since the beginning of the summer.
Even if the Fed is on hiatus, mortgage rates will continue to fluctuate daily. That’s because mortgage rates aren’t directly tied to the federal funds rate. Mortgage rates are sensitive to a variety of economic factors, including inflation, employment and the outlook for the economy in general.
The latest CPI shows that the annual inflation rate for the 12-month period ended June was 3.0%, down sharply from 4.0% in May.
“Against the backdrop of easing inflationary pressures, we should see a more steady decline in mortgage rates throughout the year, especially if the economy and jobs slow noticeably,” said Greg McBride, CFA and chief financial analyst at Bankrate, sister site of CNET.
The central bank is unlikely to cut interest rates anytime soon, but positive signals from the central bank and a slowdown in inflation may alleviate some of the upward pressure on mortgage rates.
We follow the development of refinancing rates using the information collected by Bankrate. Here is a table of the average refinancing rates provided by lenders in the US:
Average refinancing rates
| Product | Rate | A week ago | Change |
|---|---|---|---|
| 30 year old solid refi | 7,34 % | 7,33 % | +0,01 |
| 15 year old solid refi | 6,63 % | 6,57 % | +0,06 |
| 10 year solid refi | 6,73 % | 6,72 % | +0,01 |
Pricing as of July 24, 2023.
How to find personalized refinancing rates
It is important to understand that the fares advertised online often require certain eligibility conditions. Your interest rate will be affected by market conditions as well as your specific credit history, financial profile and application.
A strong credit score, low credit utilization, and a history of regular and timely payments will generally help you get the best interest rates. You can get a good feel for average interest rates online, but be sure to speak with a mortgage professional to find out what specific interest rates you qualify for. In order to get the best refinancing rates, you should first make your application as descriptive as possible. The best way to improve your credit rating is to get your finances in order, use credit responsibly, and monitor your credit regularly. Don’t forget to talk to multiple lenders and do your research.
Refinancing can be a great move if you can get a good interest rate or pay off your loan sooner – but think carefully if it’s the right choice for you at the moment.
When to Consider Mortgage Refinancing?
Generally, for a refinance to make sense, you should get a lower interest rate than your current interest rate. In addition to interest rates, the change in the loan term is another reason for refinancing. When deciding whether to refinance, consider factors other than market interest rates, including the length of time you plan to stay in your current home, the length of the loan term, and the amount of your monthly payments. And don’t forget fees and closing costs, which can add up.
As interest rates rose throughout 2022, the number of refinance applicants dwindled. If you bought your home when interest rates were lower than they are now, refinancing your mortgage may not bring you any financial benefit.
Not all messages on the site express the site’s point of view, but we automatically transmit and translate these messages through programmatic technology on the site and not by a human editor
2023-07-24 14:57:39
#Mortgage #Refinance #Rates #July #Rate #hike
