What Are Current Mortgage Refinance Rates?

by John Stapel

If you’re looking to purchase a new home, or are perhaps thinking about refinancing your current situation, it pays to know what the current mortgage rates are.

A number of factors will influence the type of loan you can get from lenders, or what to expect when you attempt to refinance your current mortgage in an attempt to pay a lower rate or use your home’s equity for a loan. Your credit score will be one of the main factors, and you can always take steps to build that up if it’s not currently as strong as you would like it to be.

Current mortgage rates and your credit score will determine the interest rate you will pay for your home loan. The interest rate is the amount of money you pay on top of the actual cost of the place you are looking to buy, so the lower the interest rate, the lower the overall cost.

Fortunately for you, those mortgage rates are looking particularly inviting at the moment. “It is an unbelievably great time to get a mortgage compared to anytime I can remember,” says Shashank Shekhar, Founder, and CEO of InstaMortgage. “Mortgage rates in the last 12-18 months have been the lowest [they have] ever been.”

Current Mortgage Rates

The mortgage rate that you might qualify for will depend on your credit score and history, where you’re looking to purchase a home, the cost of the home itself, and how much you might be willing to pay in terms of a down payment.

The more you put down, the lower your rate. If you can afford to put down more than 20%, you’ll save money in the end.

Whether you’re purchasing your first home, your second or an investment property, and the length of your loan — 30, 20, 15, or 10 years are the most common — will also determine your rates, as the shorter your term, the lower your rate will typically be. The monthly payment will overall be higher, however.

That said, there’s always a given range of mortgage rates available at any given moment, and the current rates are particularly friendly to people thinking about taking the plunge, according to Tabitha Mazzara, Director of Operations at mortgage lender MBANC.

“The higher your credit score, the lower the rate you can qualify for, which is currently bottoming out around 3.8% for someone with excellent credit,” says Mazzara. “If your credit is on the lower end, we’re seeing about 5.4%.”

To Mazzara, these rates are “rock bottom. From an interest rate standpoint, it’s a great time to buy,” she says. “But of course, that’s not the only factor to consider. Housing is a seller’s market, and I don’t think this is a bubble that’s going to pop. There may be some small adjustments, but this is more like the new normal.”

The reason mortgage rates are “about as low as it goes,” Mazzara says, is that the Federal Government is “trying to stimulate the economy post-pandemic. But that might not last forever the further we get into recovery. We’re already seeing the signs that the bottom may be behind us.”

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Data based on US mortgage loans closed on Oct 22, 2021

Loan Type Oct 22 Last Week Change 15 Year Fixed Conventional 2.74% 2.64% 0.1% 30 Year Fixed Conventional 3.7% 3.61% 0.09% 7/1 ARM Rate 3.8% 3.88% 0.08% 10/1 ARM Rate 4.24% 4.07% 0.17%

Your actual rate may vary

What Moves The Mortgage Rate

Investors know that if you’re looking to make money in the financial market and don’t mind some risk, and you’re willing to pay a lot of attention to how the market is fluctuating (or pay someone to pay attention for you) then the stock market is where you want to go.

If, on the other hand, you want an investment that is safe and secure and that you don’t need to constantly monitor, then bonds and real estate are solid investments. It therefore makes sense that mortgage rates and bonds are very interconnected.

“Mortgage rates can move on a daily basis as the price of mortgage bonds, called Mortgage Backed Securities or MBS in short, fluctuate just like the price of stocks do,” explains Shekhar. “Stocks and bonds usually move in opposite directions. So a bad employment news report or a political crisis can lower stock prices but are usually good for mortgage rates. While the Federal Reserves doesn’t control the mortgage rates directly, they have been purchasing billions of MBS every month, thus artificially keeping the mortgage rates low.”

Qualifying Factors For Lowest Rates

Of all the factors that determine what mortgage rates you might qualify for, and whether you might be able to get the lowest rates, “it’s tough to overstate the importance of credit scores to a mortgage loan application — they’re one of the top things lenders consider,” says Mazzara. “A bankruptcy is also not a good look. Income level matters, but the majority of denials happen because of what we call “derogs,” or derogatory marks for late payments. Derogs show that you’re a borrower who’s having trouble paying their bills, which is the exact opposite of what we need you to do.

“But on the positive side, 680 or higher is a decent score that should get you a really good interest rate,” she adds.

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Refinancing Rates

There are plenty of reasons to consider refinancing your mortgage, which is a process by which a lending company or bank will pay off your existing mortgage so that you can start over with a new loan. Perhaps when you first got your loan, your credit score was fair to not-so-great, and so you ended up with a higher interest rate. Or maybe you want to take advantage of the current low mortgage rates.

Either way, you stand to either lower your monthly payments — which can help you put more money into your savings or give you more money for day-to-day expenses — or to possibly pay off your home faster.

You can also use the total value of your home to qualify for a loan, so if you need to borrow money for a car or to send your child to college, a low refinancing mortgage rate could be very helpful. Just keep in mind that refinancing typically comes with a one-time closing cost, usually between 2% to 5% of the total mortgage.

The refinancing mortgage rates and the regular mortgage rates are highly intertwined but not quite the same, with Shekhar putting the rates at “around 3% for a 30-year fixed and 2.25% for a 15-year fixed, for very well-qualified borrowers.”

Going Too Low

It needs to be pointed out that while, obviously, everyone loves saving money, the lowest possible rate that you can qualify for isn’t inherently the best deal. Don’t forget to kick the tires and look at your agreement carefully, and make sure that the low rate isn’t a red herring. While a certain amount of closing fees are to be expected, Shekhar says to be wary of too many costs getting added.

“A lower rate is only a great deal if the lender isn’t adding a bunch of other costs to close. Read the Loan Estimate closely from the lender as it will break down all the costs being added in,” Shekhar says. “Also, be sure to check out the lender’s credibility and reputation on online review sites. A low rate means nothing if you get really bad service, wrong advice, delayed closing, or end up paying for a lock extension fee.”

While your credit score and the overall mortgage rate are the biggest factors in determining what your personal rate will be, every lender is a little bit different, which is why Shekhar says you should shop around. “It can vary by as much as 0.5%,” he says. “By looking at many different lenders and what they offer, you will be able to compare and figure out if you are getting a good deal.”

Mazzara recommends you get at least three different quotes before you make a decision, and she stresses that you shouldn’t “forget to factor in closing costs, which can vary by lender, but are somewhere around 2-6% of the amount of your loan.”

To give you a sense of how much rates might vary, here are current rates for three popular lenders, Quicken Loans , Rocket Mortgage, and Veterans United, for a 30-year fixed mortgage. Keep in mind this is just an estimate, as your particular rate will vary based on the factors outlined above.

Current 30-Year Fixed Mortgage Rates for Quicken Loans: 3.125%

Current 15-Year Fixed Mortgage Rates for Quicken Loans: 2.375%

Current Mortgage Refinance Rates for Quicken Loans: Can vary between 3.125% – 2.5% for a $250,000 house.

Current 30-Year Mortgage Rates for Rocket Mortgage: 3.125%

Current 15-Year Mortgage Rates for Rocket Mortgage: 2.25%

Current 30-Year Mortgage Refinance Rates for Rocket Mortgage: 2.99%

Current 15-Year Mortgage Refinance Rates for Rocket Mortgage: 2.99%.

Current 30-Year Mortgage Rates for Veterans United: 2.25%

Current 15-Year Fixed Mortgage Rates For Veterans United: 2.25%

Current 30-Year Mortgage Rates Refinance for Veterans United: 2.750%

Current 15-Year Mortgage Rates Refinance for Veterans United: 2.250%