Mortgage Refinance Rates Continue to Fall
Tip It!The other day, I wrote about current mortgage refinance rates. Guess what? In the time since I wrote that articles, rates have continue to fall. In fact, Zillow showed average rates of as low as 4.71% for 30 year fixed rate mortgages as this morning (it’s frequently updated, so your results may vary), and Bankrate is reporting an overnight average of 5.08% for 30 year mortgages. Either way, it’s clear that mortgage rates are very, very low right now.
Of course, if you’re trying to decide when to refinance, then the key question is whether or not they’ll head even lower. Since I don’t have a crystal ball for this sort of thing, I have to rely on things like Bankrate’s Rate Trend Index, which currently states that “Rates are likely to head lower” over the next 30-45 days. Just keep in mind that the RTI is far from foolproof, as it’s simply a summary of the opinions of a panel of experts.
My advice is that, if you’re thinking about refinancing, get a ballpark estimate of how much it’ll cost you to do so. With that in hand, you can estimate your “Payback Period” (i.e., how long it will take to recoup your closing costs). If the payback period is too long (or if you don’t plan on staying in your house for very long), then it doesn’t make sense to refinance no matter how enticing the rates seem to be. But if the payback period makes sense, then go for it. Just try not to look back with regret if rates dip further after you pull the trigger.
Published on January 13th, 2009 - 6 Comments
Filed under: Mortgages
About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
Related articles...
» Time to Refinance Your Mortgage?» Mortgage Refinance Complete
» Calculating Your Mortgage Refinance Payback Period
» How to Decide When to Refinance Your Mortgage
» Deciding When to Refinance Your Mortgage
» Mortgage Rates at Record Low, Few Refinancing
» More Thoughts About Refinancing Our Mortgage
» Beware the “No-Cost” Mortgage Refinance
Was this article useful? Please sign up to receive our content via e-mail:
6 Responses to “Mortgage Refinance Rates Continue to Fall”
Leave a Reply
Top Cards by Category
Earn $200 Bonus Cash Back after you make $500 in purchases in your first 3 months. 5% Cash Back on up to $1,500 spent in bonus categories each quarter.
Earn 25,000 Membership Rewards(R) bonus points when you spend $1,000 in your first three months of Card membership.
Earn 25,000 Membership Rewards(R) bonus points when you spend $1,000 in your first three months of Card membership.
No Balance Transfer Fee!* 0% Intro APR for up to 15 months on purchases and balance transfers. This card offers Blueprint, free and customizable account features that help you avoid unnecessary interest and pay your balances down faster.
Enjoy no balance transfer fee for a limited time. 0% introductory rate on Balance Transfers and Purchases. Earn up to 5% Cashback Bonus in categories that change like gas, restaurants, department stores and more. Limitations apply*
Enjoy no balance transfer fee for a limited time. 0% introductory rate on Balance Transfers and Purchases. Earn up to 5% Cashback Bonus in categories that change like gas, restaurants, department stores and more. Limitations apply*
Enjoy amenities for you and your business, like: complimentary airport club access, including American Airlines Admirals Club(R) lounges.
5% Cashback Bonus in categories that change like gas, restaurants, department stores and more. Limitations apply*. Up to 1% unlimited Cashback Bonus on everything else. No annual fee
Earn 3X points on airfare, 2X points on gas and groceries, and 1X points on everything else.
Reports to 3 major credit bureaus monthly and acceptance at millions of locations worldwide, including website purchases and reservations.
- How to Become a Millionaire
- How to Get Out of Debt
- The Best Dollars I've Ever Spent
- How Our Estate Plan is Structured
- How We Paid Our Mortgage In Less than 10 Years
- Money Making Ideas
- How to Manage Your Asset Allocation with Multiple Accounts
- Consumption Smoothing - Save While the Saving's Good
- How to Save on Groceries
- How Much Life Insurance Do You Need?
- Eleven Great Books About Money
- Dave Ramsey is Bad at Math
- Dish Network Customer Service SUCKS
- $8,000 Homebuyer Tax Credit
- Pay Off Mortgage Early or Invest?
- How to Claim the First-Time Homebuyer Tax Credit
- Reduced Credit Limits? Share Your Experience
- $15,000 Homebuyer Tax Credit
- Ethanol Blended Gas = Lower Mileage?
- Termite Control: Sentricon vs. Termidor
- How Much Should You Pay a Babysitter?
- Federal Income Tax Rates Went Down but Your Federal Tax Withholding Increased. Here's Why...
- Would the "Fair Tax" Gut the Economy?
How to save money on insurance
- The Best Values in Colleges - 2012 Edition
- Five Myths About Renter's Insurance
- Own Your Investments, Rent Your Fun
- Citibank to Issue Credit Cards in China
- Heartstrings and Pursestrings
- Saving Money at the Grocery Store: Store Brand Pricing on the Rise
- Missing Tax Paperwork?
- Is Your Investment Allocation Right?
- Chase Freedom Experimenting With Quarterly Rewards Auto-Enrollment
- Income-Based Repayment Plans for Student Loans
January 13th, 2009 at 3:39 pm
I just locked in 4.5% for 15 years at a local credit union. No points and closing costs were only $2,100. Gotta love the good ole Credit Union!! Although I’m going from 7% for 30 years to 4.5% for 15 years, my principle and interest payment only goes up $42. But I don’t have to pay PMI and I’m knocking 7 years off the loan (I’ve been in the house 8 years). Not too shabby of a deal. They also had 10 years at 4.5%, which is exactly $300 more a month for me. We decided for more flexibility, but will probably end up paying the extra $300 to pay off the house even sooner.
January 14th, 2009 at 12:25 am
I got a 30 year quote at 5%, but ended up only saving around $150 a month. With closing costs I’d have to stay in the house for 5 years to break even. Just not in line with my life plans. For those that can knock of years and keep the same payment or just slightly higher are in great shape.
January 14th, 2009 at 12:34 am
thomas: Are you sure you did your math right? That works out to closing costs of $9000. Seems awfully high.
January 14th, 2009 at 11:12 am
We’re in the middle of refinancing from a 6.5% rate to a 5% rate on our 30 year fixed. The payback period to pay back the closing costs? 13 months. I’ll take it!
We’ll be saving a ton of money in the long run, and we’ll be here for at least another 3-4 years, if not longer.
Now we’re just crossing our fingers on the appraisal. Time to say a prayer!
January 15th, 2009 at 6:11 pm
Our mortgage is currently at 5% for two more years and I’m thinking about a refi soon as these current rates are tempting. I live in California so a 15 year mortgage would add thousands to my monthly payment, not a few hundred. I think we’ll go with the 30 year fixed and make a 13th payment when possible.
June 15th, 2009 at 1:21 pm
My fiancee and I are patiently waiting for mortgage rates to drop before we lock in. We are closing on our first home on July 15th. About a month ago our banker could’ve offered us 5% on a FHA loan. Last week it was closer to 6%. Today he offered us a 30 day lock at 5.5%. Do we lock in now, or wait for rates to hopefully fall a bit closer to that 5% mark? Need advice!!