Mortgage Refinance Rates March 9th, 2023: Rates Drop

The average rate for the 15-year fixed-rate refinance increased this week, while the 30-year fixed-rate refinance saw a decrease in rates. Average rates for 10-year fixed refinances sank.

Like mortgage rates, refinance rates fluctuate on a daily basis and vary from lender to lender, but also tend to rise and fall over the long term based on broad market conditions and macroeconomic factors. Refinancing rates rise in 2022 as the Federal Reserve raises the federal funds rate in an effort to reduce inflation, but we are seeing signs that rates may be gradually leveling out.

The 0.25% hike announced on February 1 following the latest Fed meeting is the smallest since March 2022, a sign the Fed may scale back its aggressive rate hikes as inflation eases. Looking at average mortgage rate data for the past year, mortgage rates peaked in late 2022 and have been trending down ever since. We’re still a long way from the record low refinance rates of 2020 and 2021, but borrowers could see a drop in rates in 2023.

“With a backdrop of easing inflationary pressures, we should see more consistent declines in mortgage rates as the year progresses, especially if the economy and labor market slow,” says Greg McBride, CFA and chief financial analyst at Bankrate. ” (Bankrate, like CNET Money, is owned by Rad Ventures.) He expects 30-year fixed mortgage rates to be closer to 5.25% at the end of the year.

Regardless of where rates are, homeowners shouldn’t look to time the market, and instead decide whether refinancing makes sense for their financial situation. As long as you can get a lower interest rate than your current rate, refinancing is likely to save you money. Do the math to see if it makes sense for your current finances and goals. If you decide to refinance, make sure you compare rates, fees and annual percentage rates — which reflect the total cost of borrowing — from different lenders to find the best deal.

30 year fixed rate refinance

The average rate for a 30-year fixed refinance loan currently stands at 7.12%, a decrease of 2 basis points from last week. (One basis point is equal to 0.01%.) Refinancing with a shorter loan term to a 30-year fixed loan can lower your monthly payments. Because of this, a 30-year refinance may be a good idea if you’re having trouble making your monthly payments. In exchange for a lower monthly payment, however, 30-year refinance rates will typically be higher than 10- or 15-year refinance rates. You will also pay off your loan gradually.

15 year fixed rate refinance

The average 15-year fixed refinance rate is now 6.37%, an increase of 1 basis point from last week. With a 15-year fixed refinance, you’ll receive higher monthly payments than you would with a 30-year loan. On the other hand, you’ll save money on interest because you’ll be paying off the loan sooner. 15-year refinance rates are usually lower than 30-year refinance rates, which will help you save even more in the long run.

10 year fixed rate refinance

The average 10-year fixed refinance rate is 6.38% now, a decrease of 10 basis points from a week ago. Compared to a 15- or 30-year refinance, a 10-year refinance typically has a lower interest rate but higher monthly payments. A 10-year refinance can be a good deal, as paying off your home sooner will help you save on interest in the long run. But you should confirm that you can afford the higher monthly payments by evaluating your budget and overall financial situation.

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where rates are going

At the start of the pandemic, refinance interest rates fell to historic lows. But beginning in 2022, the Fed begins raising interest rates in an effort to curb rising inflation. While the Fed does not directly set mortgage rates, Fed rate increases increase the cost of borrowing across most consumer loan products, including mortgages and refinances. Mortgage rates set to reach 20-year high in late 2022.

Recent data shows that overall inflation has been falling slowly but steadily since peaking in June 2022, but it remains well above the Fed’s 2% inflation target. After raising rates by 25 basis points in February, the Fed has indicated (PDF) that it plans to slow the pace of rate hikes through 2023 – but not stop. Mortgage and refinance rates trailed this year, though consumers shouldn’t expect a sharp decline or a pandemic-era comeback.

We track refinance rate trends using information collected by Bankrate, owned by CNET’s parent company. Here is a table with the average refinance rates offered by lenders across the US:

Average Refinance Interest Rates

product Rate A week ago Change
30 years fixed ref 7.12% 7.14% -0.02
15 years fixed ref 6.37% 6.36% +0.01
10 years fixed ref 6.38% 6.48% -0.10

Rates as on March 9, 2023.

How to get the best refinance rate

It’s important to understand that rates advertised online often require specific conditions to qualify. Your interest rate will be affected by market conditions as well as your specific credit history, financial profile and application.

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 rate. You can get a good feel for average interest rates online, but speak with a mortgage professional to be sure which specific rates you qualify for. To get the best refinance rate, you’ll first want to make your application as strong as possible. The best way to improve your credit rating is to organize your finances, use credit responsibly, and monitor your credit regularly. Don’t forget to talk to multiple lenders and shop around.

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Refinancing can be a good move if you can get a good rate or pay off your loan sooner – but consider carefully whether it’s the right option for you at this time.

Is Now a Good Time to Refinance?

To make refinancing worthwhile, you’ll generally want to get an interest rate lower than your current rate. Besides interest rates, changing your loan term is another reason to refinance. When deciding whether to refinance, be sure to consider factors other than market interest rates, including how long you plan to stay in your current home, the length of your loan, and your monthly payments. amount is included. And don’t forget about fees and closing costs, which can add up.

As interest rates rise in 2022, the pool of refinance applicants shrinks. If you bought your home when interest rates were lower than they are today, there may not be a financial advantage to refinancing your mortgage.

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