Refi Rates Continue Falling Streak. Today's Refinance Rates, Sept. 12, 2024
With average mortgage rates at their lowest point since early 2023, more homeowners can benefit from refinancing.
Katherine Watt
Writer
Katherine Watt is a CNET Money writer focusing on mortgages, home equity and banking. She previously wrote about personal finance for NextAdvisor. Based in New York, Katherine graduated summa cum laude from Colgate University with a bachelor’s degree in English literature.
Laura Michelle Davis
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Laura is a professional nitpicker and good-humored troubleshooter with over 10 years of experience in print and digital publishing. Before becoming an editor with CNET, she worked as an English teacher, Spanish medical interpreter, copy editor and proofreader. She is a fearless but flexible defender of both grammar and weightlifting, and firmly believes that technology should serve the people. Her first computer was a Macintosh Plus.
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Katherine Watt
Writer
Katherine Watt is a CNET Money writer focusing on mortgages, home equity and banking. She previously wrote about personal finance for NextAdvisor. Based in New York, Katherine graduated summa cum laude from Colgate University with a bachelor’s degree in English literature.
Laura Michelle Davis
Editor
Laura is a professional nitpicker and good-humored troubleshooter with over 10 years of experience in print and digital publishing. Before becoming an editor with CNET, she worked as an English teacher, Spanish medical interpreter, copy editor and proofreader. She is a fearless but flexible defender of both grammar and weightlifting, and firmly believes that technology should serve the people. Her first computer was a Macintosh Plus.
CNET staff — not advertisers, partners or business interests — determine how we review the products and services we cover. If you buy through our links, we may get paid.
Since 2022, refinancing activity has gone down in response to surging mortgage rates. But with inflation normalizing and the Federal Reserve positioning itself to cut interest rates next month, mortgage rates should gradually decline. As that happens, more homeowners, especially those with high rates on their home loans, will benefit from a refinance.
Mortgage rates are at their lowest point in over a year. You can take advantage by comparing multiple offers to get the best deal on your home loan. Enter your information here to get a custom quote from one of CNET’s lenders.
About these rates: Like CNET, Bankrate is owned by Red Ventures. This tool features partner rates from lenders that you can use when comparing multiple mortgage rates.
Mortgage refinance rates have been moderating in response to cooler inflation and labor data. Still, the majority of homeowners, who have mortgage rates well below 6%, wouldn’t benefit from a refinance at today’s rates.
Despite the recent dip, experts don’t expect another refinancing boom like we saw in 2020 and 2021 when mortgage rates hit historic lows.
“This isn’t quite low enough to cause a surge in refi activity, but as rates move under 6%, that would begin to change,” said Matt Graham of Mortgage News Daily.
Experts say slowing inflation and the Federal Reserve’s projected interest rate cuts should help push mortgage interest rates down closer to 6% by the end of 2024. But a lot could happen with the economy between now and then.
While the Fed hasn’t adjusted interest rates since last summer, a rate cut now appears imminent in September, according to Melissa Cohn, regional vice president of William Raveis Mortgage and member of CNET Money’s expert review board.
If you’re considering a refinance, remember that you can’t time the economy: Interest rates fluctuate on an hourly, daily and weekly basis, and are influenced by an array of factors. Your best move is to keep an eye on day-to-day rate changes and have a game plan on how to capitalize on a big enough percentage drop, said Graham.
When you refinance your mortgage, you take out another home loan that pays off your initial mortgage. With a traditional refinance, your new home loan will have a different term and/or interest rate. With a cash-out refinance, you’ll tap into your equity with a new loan that’s bigger than your existing mortgage balance, allowing you to pocket the difference in cash.
Refinancing can be a great financial move if you score a low rate or can pay off your home loan in less time, but consider whether it’s the right choice for you. Reducing your interest rate by 1% or more is an incentive to refinance, allowing you to cut your monthly payment significantly.
The rates advertised online often require specific conditions for eligibility. Your personal interest rate will be influenced by market conditions as well as your specific credit history, financial profile and application. Having a high credit score, a low credit utilization ratio and a history of consistent and on-time payments will generally help you get the best interest rates.
The average 30-year fixed refinance rate right now is 6.30%, a decrease of 14 basis points from what we saw one week ago. (A basis point is equivalent to 0.01%.) A 30-year fixed refinance will typically have lower monthly payments than a 15-year or 10-year refinance, but it will take you longer to pay off and typically cost you more in interest over the long term.
The current average interest rate for 15-year refinances is 5.60%, a decrease of 21 basis points compared to one week ago. Though a 15-year fixed refinance will most likely raise your monthly payment compared to a 30-year loan, you’ll save more money over time because you’re paying off your loan quicker. Also, 15-year refinance rates are typically lower than 30-year refinance rates, which will help you save more in the long run.
For 10-year fixed refinances, the average rate is currently at 5.59%, a decrease of 17 basis points over last week. A 10-year refinance typically has the lowest interest rate but the highest monthly payment of all refinance terms. A 10-year refinance can help you pay off your house much quicker and save on interest, but make sure you can afford the steeper monthly payment.
To get the best refinance rates, make your application as strong as possible by getting your finances in order, using credit responsibly and monitoring your credit regularly. And don’t forget to speak with multiple lenders and shop around.
Does refinancing make sense?
Homeowners usually refinance to save money, but there are other reasons to do so. Here are the most common reasons homeowners refinance:
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