Key Mortgage Rate at 3-Year Low: Should You Refinance?

Key Mortgage Rate at 3-Year Low: Should You Refinance?
Photo by Andy Dean Photography / Shutterstock.com

Is it time to refinance your mortgage? Interest rates have tumbled recently, and the average rate for a 30-year fixed-rate mortgage now stands at 3.71%, according to the Mortgage Bankers Association (MBA).

That is the lowest level for the 30-year fixed rate in more than three years — since October 2016, to be exact. That rate has fallen in five of the past six weeks.

Falling mortgage rates caused the MBA Refinance Index to leap by 15% last week, to its highest level since 2013. The index also was 183% higher than the same week one year earlier.

By contrast, however, the seasonally adjusted MBA Purchase Index actually dipped last week by 10% from the previous week.

What is behind the most recent tumble in mortgage rates? Joel Kan, MBA’s associate vice president of economic and industry forecasting, speculated:

“The 10-year Treasury yield fell around 20 basis points over the course of last week, driven mainly by growing concerns over a likely slowdown in Chinese economic growth from the spread of the coronavirus.”

Is now a good time to refinance your mortgage?

With rates sinking so low, a question arises: Is now the right time to refinance your mortgage?

For millions of homeowners, the answer might be yes. As we previously have pointed out:

“Even small movements in mortgage rates can make a big difference in your monthly housing costs and in the interest you pay over the lifetime of your loan.”

If you are ready to take the plunge, check out our story “How to Refinance Your Home Loan.”

Once you are comfortable with the basics of a mortgage refinance, stop by our Solutions Center. There, you can search for the best mortgage rates that are available where you live.

Do you have plans to refinance your mortgage? Let us know why — or why not — by commenting below or on our Facebook page.

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