Many people are still trying to figure out if they should refinance their mortgage. The best way to assess this is by looking at the current mortgage rates and seeing what may happen in 2021. 2021 is a year of mortgage rates that are at their lowest in decades. Now may be the time for many people to refinance and get a lower rate. But should you? This blog post will help you decide if refinancing your mortgage is right for you or not!
Mortgage rates have hit new lows this year making history. However, mortgage rates have been starting to rise, and many housing experts believe that the trend will only continue in 2021. People who refinanced before rates went up last week can sit happily with savings. Those who have been delaying a refi because they thought rates would keep going down should think about what happened last week and consider refinancing before it’s too late. Mortgage rates are still low. Last week, rates went up a little bit. There isn’t much reason to think that this is the last of rising rates.
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Current Rates
In the first week of October, mortgage rates rose above 3% for the first time since July. They are now at their highest point this year. However, rates are still well below the average. The current rate is still sitting around three percent depending on which index you look at. It’s important to recognize that if interest rates do increase in 2021, it will mortgage rates up as well. This makes it clear why many people want to refinance today before things get worse! A few percentage points can be the difference between a mortgage that costs you thousands in monthly payments and one which only has hundreds.
15 Year Fixed Mortgage Rates
This week saw the average rate on a 15-year fixed mortgage shoot higher, from 2.15% to 2.28%. But even with the increased interest rates, 15-year loans are still better than they were this time last year. Rising 15-year rates are important for people if you are a homeowner. Short-term loans are cheaper over the long run. But you will have to pay more each month.
30 Year Fixed Mortgage Rates
The rate for 30-year fixed mortgages increased last week. The average interest rate is now 3.01% increasing from 2.88%. The weekly increase was the largest since February. The average rate is still lower than it was this time last year. Are the current mortgage rates low enough to make refinancing worth your while?
Should You Refinance?
The more that mortgage rates increase, the fewer homeowners can save by refinancing. People who are thinking about refinancing their homes might want to do it soon because rates are going up. This means that if you wait to refinance, you will lose money because the interest rates will be higher.
It’s important to consider more than just today when you are looking at refinance options. The short-term outlook for 2021 might not be great, but there is no guarantee that things will go back up soon! If you are planning on staying in one place long-term, then now may be a good time for refinancing. However, if you plan on moving within five years or so, then refinancing probably isn’t right for you since interest rates could easily rise before the end of 2021. This decision shouldn’t only rely on the numbers though.