Most of those who are considering refinancing their mortgage can benefit from taking the time to find out what the current rates are for the different kinds of loan options available. Generally, with the knowledge of how much each refinance loan is likely to cost, you’ll be able to pick the right type of mortgage for your needs.
Rates of fixed refinancing mortgages
If you plan to pick a fixed rate mortgage, you may be curious as to how much you’ll be looking to pay for your replacement home loan. While the APR (annual percentage rate) is often the most important to consider when comparing rates, since it generally encompasses the costs involved in your monthly repayments, knowing how much you’re spending on your interest isn’t usually a bad idea, either.
Currently, the annual percentage rate and the interest rates for fixed refinance home loans are:
30 year term
APR – 4.323%
Interest rate – 4.250%
20 year term
APR – 4.225%
Interest rate – 4.125%
15 year term
APR – 4.002%
Interest rate – 3.875%
10 year term
APR – 4.172%
Interest rate – 3.990%
Rates of adjustable refinancing mortgage
While many people opt for fixed rate mortgages when refinancing, getting a replacement adjustable loan (or even switching from fixed to adjustable rates) may not be a bad idea depending on what you want from your new loan. The annual percentage rates and the interest for adjustable rate mortgage refinance options currently are:
10 year term
APR – 5.193%
Interest rate – 5.125%
5 year term
APR – 4.995%
Interest rate – 4.375%
3 year term
APR – 5.061%
Interest rate – 4.875%
Why bother refinancing?
With so many homeowners across the U.S choosing to refinance their mortgages, you may be wondering how it could benefit you to replace your current home loan. Some of the main benefits of refinancing include:
A lower interest rate
In most cases, those who refinance their mortgage will be able to get a lower interest on their loan, which can often reduce the typical monthly repayments, too. This is one of the most common reasons why people choose to refinance and, as it could potentially save hundreds of dollars a year, it’s not hard to see why this is such an appealing option.
Switching to another type of rate
While it’s common for home owners to change from an adjustable rate mortgage to a fixed one when refinancing, there are often other options available. Switching can help you to pick rates that are better suited to your current situation and needs, and can potentially save you cash in the long run, too.
Reduce your monthly payments
With a new mortgage comes a new loan term – and in most instances, this will allow you to pay off your mortgage in smaller amounts each month.
Aside from the lowered interest rate, you’ll often have lower monthly repayments – because if you choose to refinance for a 30 year mortgage, you’ll be paying whatever you have left of your loan over the duration of 30 years, which is likely to reduce your payments by quite a bit.
Paying off your mortgage faster
If you would rather keep your monthly payments the same and speedup the repayment process, picking a shorter term might be the ideal option for you. One of the main benefits of having a short lasting mortgage is that the interest rate will often be lower than that of a longer one, as well as being able to finish your home loan’s payments sooner.
Using your equity
There’s a good chance that your home has built up some equity if you’ve been making repayments on your mortgage for a while. With a cash out refinance loan, you could turn that home equity into cash, which you could put to good use elsewhere for your property (like on your repayments or even on renovating).