Mortgage rates drop amid delta variant fears: Why now is a good time to refinance
Mortgage rates dropped to their lowest point since the beginning of 2021. Now, experts are weighing in on why it's a good time to refinance. (iStock)
Mortgage interest rates dipped again this week, falling to levels seen at the beginning of the year, according to the latest Freddie Mac Primary Mortgage Market survey.
The average rate for the 30-year fixed mortgage fell to 2.77%, and Freddie Mac Chief Economist Sam Khater said that's good news for homeowners who want to buy a new home, make renovations or refinance.
"With global market uncertainty surrounding the Delta variant of COVID-19, we saw 10-year Treasury yields drift lower and consequently mortgage rates followed suit," Khater said, adding that the 15-year fixed rate remained historically low.
Now might be the perfect time to refinance your mortgage due to these record-low rates. By shopping around, you could save hundreds on your monthly payments. Luckily, Credible makes it simple; click here to view today's featured refinance rates and view home loans based on APR, fees, and monthly payments depending on your loan amount.
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How much did interest rates drop?
The average 30-year fixed-rate mortgage decreased from last week’s 2.8% to 2.77% for the week ending Aug. 5, down from last year’s 2.88%.
The 15-year fixed-rate mortgage remained unchanged from last week at 2.1%, but was down from last year’s 2.44%. The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) also decreased to 2.4%, down from last week’s 2.45%. Last year, the 5-year ARM was at 2.9%.
To find the best mortgage rate, start by using Credible. Credible can show you current mortgage rates from multiple lenders and help you make an informed decision regarding your home loan.
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Why is now a good time to refinance?
Mortgage rates are at their lowest point in about a year, but one mortgage billionaire said that consumers are actually seeing all-time lows.
"You'll get someone telling me, ‘No they're not, interest rates are not at all-time lows. They were lower in July or August last year.’ But that's not reality because the primary and secondary spreads were wider back then, which means the consumer was not getting as low rates," United Wholesale Mortgage (UWM) President and CEO Mat Ishbia said. "Right now, today, consumers get a lower rate than they ever got in 2020."
Such low rates can allow borrowers to save hundreds on their monthly payments by refinancing. Home prices, in addition, are also increasing. June's 17.2% national growth rate was the highest since the late-1970s, according to the CoreLogic Home Price Index report.
Homeowners who refinance can pull out extra cash from their house, and use the funds toward home improvement projects or to pay down high-interest debt. If you’re ready to get started or want to learn more, contact Credible to speak to a home loan expert and get all of your questions answered.
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