20-Year Mortgage Refinance Rates Slide Back to Record Low (2024)

Chris Jennings

August 25, 2021 at 11:44 AM·4 min read

Credible Operations, Inc. NMLS# 1681276, “Credible.” Not available in all states. www.nmlsconsumeraccess.org.

Based on data compiled by Credible, today’s mortgage refinance rates are largely unchanged since yesterday, though 20-year fixed refinance rates have tumbled.

30-year fixed-rate refinance: 2.875%, unchanged
20-year fixed-rate refinance: 2.500%, down from 2.625%, -0.125
15-year fixed-rate refinance: 2.125%, unchanged
10-year fixed-rate refinance: 2.125%, unchanged

Rates last updated on Aug. 25, 2021. These rates are based on the assumptions shown here. Actual rates may vary.

Today’s 20-year mortgage refinance rates returned to 2.500%. This could be a great opportunity for homeowners to refinance and get significant interest savings, all while enjoying a manageable monthly payment. Twenty-year rates have been this low on numerous occasions this year, but their regular fluctuations indicate that they could go back up by the end of the week. Homeowners can lock in this interest rate today, or opt for a 10- or 15-year term — both terms have held at 2.125% for 27 consecutive days.

ADVERTIsem*nT

How mortgage refinance rates have changed

Today’s mortgage refinance rates are mostly the same compared to this time last week.

30-year fixed refinance rates: 2.875%, the same as last week
20-year fixed refinance rates: 2.500%, down from 2.625% last week, -0.125
15-year fixed refinance rates: 2.125%, the same as last week
10-year fixed refinance rates: 2.125%, the same as last week

Think it might be the right time to refinance? Be sure to shop around and compare rates with multiple mortgage lenders. You can do this easily with Credible and see your prequalified rates in only three minutes.

20-Year Mortgage Refinance Rates Slide Back to Record Low (2)

Rates last updated on Aug. 25, 2021. These rates are based on the assumptions shown here. Actual rates may vary.

What drives today’s refinance rates?

Mortgage refinance rates move with market factors, such as unemployment numbers and inflation.

Larger economic factors

Strength of the economy
Inflation rates
Employment
Consumer spending
Housing construction and other market conditions
Stock and bond markets
10-year Treasury yields
Federal Reserve policies

While big-picture conditions influence available rates, your personal financial history drives what rates you might be offered when you apply for a mortgage refinance.

Personal economic factors

Credit score
Credit history
Home equity
Loan amount, loan term, and loan type
Debt-to-income ratio
Location of the property

How to get the best mortgage refinance rates

You can’t control the market conditions that influence mortgage refinance rates. But you can take steps to maximize your chances of getting the best available rate. Before you refinance, try these steps.

1. Care for your credit

Check your credit report and score so you know what potential lenders will see. Correct any errors you find on your credit report. Keep paying all your bills on time and in full — positive payment history goes a long way toward elevating your credit score.

2. Pay down other debts

Your debt-to-income ratio was important when you took out your original mortgage, and it’s just as important when you refinance. Reducing your DTI will help improve your overall credit standing — plus it can free up more money to put toward paying down the principal when you refinance your mortgage.

3. Consider a shorter term

You might have taken a 30-year mortgage to ensure you got a lower monthly payment. But if you’re now able to swing a higher monthly payment, consider refinancing into a shorter term. Mortgage refinance loans with 10- and 15-year repayment terms generally have lower interest rates.

4. Comparison shop

If you decide to refinance your mortgage, be sure to shop around and compare rates from multiple mortgage lenders. Comparison shopping can help you find the best rate and repayment term available to you. You can do this easily with Credible’s free online tool and see your prequalified rates in only three minutes.

20-Year Mortgage Refinance Rates Slide Back to Record Low (3)

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

As a Credible authority on mortgages and personal finance, Chris Jennings has covered topics that include mortgage loans, mortgage refinancing, and more. He’s been an editor and editorial assistant in the online personal finance space for four years. His work has been featured by MSN, AOL, Yahoo Finance, and more.

The post 20-Year Mortgage Refinance Rates Slide Back to Record Low appeared first on Credible.

20-Year Mortgage Refinance Rates Slide Back to Record Low (2024)

FAQs

Will refinance rates drop again? ›

But until the Fed sees prolonged evidence of slowing economic growth, interest rates will stay higher. The 30-year fixed mortgage rate is expected to fall to the mid-6% range through the end of 2024, potentially dipping into high-5% territory by the end of 2025.

Read On ›

What is the average mortgage rate over the last 20 years? ›

Historical Mortgage Rates by Decade

	Minimum Mortgage Rate	Median Mortgage Rate
1990-1999	6.49%	7.88%
2000-2009	4.71%	6.18%
2010-2019	3.31%	4.03%
2020-Present	2.65%	4.55%

2 more rows

Jun 26, 2024

Discover More Details ›

How much should interest rate drop before refinancing? ›

One of the best and most common reasons to refinance is to lower your loan's interest rate. Historically, the rule of thumb has been that refinancing is a good idea if you can reduce your interest rate by at least 2%. However, many lenders say 1% savings is enough of an incentive to refinance.

What is the lowest mortgage rate ever recorded? ›

The Lowest Mortgage Rate Ever Recorded

The lowest average mortgage rate for the 30-year, fixed-rate mortgage was recorded at 2.65% in January of 2021, whereas the lowest average rate for the 15-year, fixed-rate home loan came in at 2.10% in July of 2021.

See Details ›

Will mortgage refinance rates go down in 2024? ›

Mortgage rates could fall in 2024, but that's not a given. The Mortgage Bankers Association projects a 6.6% rate by the end of the year, while Fannie Mae predicts 2024 will end with rates at 6.7%.

Find Out More ›

What are mortgage rates expected to be in 2025? ›

Looking beyond that, Freddie Mac's researchers said that they expect mortgage rates to decline even further in 2025, dropping below 6.5% on average. They believe this will further stimulate the real estate market by making homeownership more affordable for more Americans.

Tell Me More ›

How many people have a 3% mortgage? ›

More than three-quarters of homeowners — 78.7 percent — have a mortgage rate below 5 percent, while nearly 6 in 10 — 59.4 percent — have a mortgage below 4 percent. Just 22.6 percent have a mortgage rate below 3 percent, according to Redfin.

Show Me More ›

When was the last time we had 7% mortgage rates? ›

In October 2022, the 30-year rate breached 7 percent but settled back into the 6 percent range for the first half of 2023. By July 2023, rates had reversed course, and by October, the 30-year broke through 8 percent. So far in 2024, 30-year rates have held in the low 7s.

Explore More ›

What was the highest mortgage interest rate in history? ›

Interest rates reached their highest point in modern history in October 1981 when they peaked at 18.63%, according to the Freddie Mac data. Fixed mortgage rates declined from there, but they finished the decade at around 10%. The 1980s were an expensive time to borrow money.

What if I lock in a rate and it goes down? ›

When you lock your interest rate, you're protected from rate increases due to market conditions. If rates go down prior to your loan closing and you want to take advantage of a lower rate, you may be able to pay a fee and relock at the lower interest rate. This is called "repricing" your loan.

Show Me More ›

How soon can you refinance if rates drop? ›

In most cases, you may refinance a conventional loan as soon as you want. You might have to wait six months before you can refinance with the same lender. But that doesn't stop you from refinancing with a different lender.

Read The Full Story ›

Is it worth it to refinance for 1% lower? ›

The bottom line

And, while a 1% drop in mortgage rates nearly always makes sense to consider, in certain cases, even a slight drop in mortgage rates could make refinancing worth it — especially if you plan to stay in your home for the long term.

See Details ›

Will mortgage rates ever drop to 3 again? ›

It's possible that rates will one day go back down to 3%, though if current trends hold that's not likely to happen anytime soon.

Get More Info Here ›

What was the lowest 15-year mortgage rate ever? ›

The lowest average annual mortgage rate on 15-year fixed mortgages since 1991 was 2.66%. This occurred in both late 2012 and in April 2013. As of 2020 and 2021, the average 15-year fixed mortgage rate has dropped even further to 2.61% and 2.27%, respectively.

What is considered a good mortgage rate? ›

In today's market, a good mortgage interest rate can fall in the high-6% range, depending on several factors, such as the type of mortgage, loan term, and individual financial circ*mstances. To understand what a favorable mortgage rate looks like for you, get quotes from a few different lenders and compare them.

What is the interest rate forecast for the next 5 years? ›

Projected Interest Rates In The Next Five Years

ING's interest rate predictions indicate 2024 rates starting at 4%, with subsequent cuts to 3.75% in the second quarter. Then, 3.5% in the third, and 3.25% in the final quarter of 2024. In 2025, ING predicts a further decline to 3%.

View Details ›

How many times can you refinance for a lower interest rate? ›

There is no official limit (from lenders or from the government) on how often you can refinance your home. But not only can refinancing be logistically complicated, refinancing multiple times may lead to issues down the line that could impact your finances.

Why refinance when rates are high? ›

Refinance to shorten the term of the loan

People think about refinancing to shorten the term of their loan and save money on interest payments. Generally speaking, the faster you pay off a loan, the more money you might save. Refinancing is one way to shorten the term of your loan.

Learn More ›