Following a Dip to a 6-Week Minimum, Refinance Rates have Increased for a consecutive Day.
Fast Facts on Mortgage Rates:
After declining for four days, 30-year refinance rates have climbed back up, currently sitting at 7.13%. While this is below the May peak of 7.32%, it's still higher than the March low of 6.71%.
Not only did 30-year refi rates increase, but 15-year and 20-year refinance averages also saw hikes of 6 and 8 basis points, respectively. Jumbo 30-year refi averages even jumped 11 basis points higher.
Keep in mind that the rates we provide won't match the teaser rates advertised online. These rates are cherry-picked, often involving additional costs or requirements. Your actual rate will be determined by factors like credit score, income, and loan type.
It's crucial to shop around for the best mortgage refinance option and comparison shop regularly.
Use our Mortgage Calculator to get a sense of your monthly payment based on home price, down payment, loan term, property taxes, homeowners insurance, and interest rate.
Why are Mortgage Rates Rising or Falling?
Mortgage rates are affected by a multitude of factors including:
- Bond market fluctuations, especially 10-year Treasury yields
- The Federal Reserve's monetary policies, particularly as it relates to bond buying and funding government-backed mortgages
- Competition between lenders and differing loan types
While it's tough to pinpoint a single factor causing changes, the Federal Reserve’s adjustments to its target federal funds rate significantly impact mortgage rates. When the Fed raises this rate to combat inflation, borrowing costs increase for banks, causing rates to rise. Conversely, cutting the rate tends to lower mortgage rates.
Mortgage rates are also closely linked to the yields on the 10-year U.S. Treasury note. Rising inflation, term premium, and prepayment risk can also push rates higher.
Individual financial circumstances heavily influence the mortgage rate one qualifies for, including credit score, loan-to-value ratio, debt-to-income ratio, loan amount, loan terms, and closing costs.
Remember, fluctuating mortgage rates can be a result of broader economic factors, government policies, financial market conditions, global events, and unique borrower characteristics. Shopping around for the best rate and understanding your risk level is essential to securing the best mortgage for your situation.
In the realm of personal-finance, the hike in 30-year refinance rates might encourage individuals to consider alternative avenues for financing, such as Initial Coin Offerings (ICO) in the finance sector. This shift could potentially affect one's personal-finance strategy, as the higher mortgage rates could impact monthly payments. Moreover, understanding the factors that influence mortgage rates, like bond market fluctuations, the Federal Reserve's monetary policies, and competition between lenders, can help individuals make informed decisions about their personal-finance management, including mortgage refinancing.
