Current Mortgage Refinance Rates

Current mortgage refinance rates can be found at the websites of financial and lending institutions, real estate websites, personal finance websites, financial magazines, blogs, and e-zines, and the websites of major US newspapers. Refinance rates change from day to day and are based on optimal borrower credit. Borrowers with lower credit scores may be charged higher rates.

In addition, daily rates may differ from the weekly index rate, although both represent current rates by computing an average. Daily rates show changes from one day to the next. The weekly index rates show average rates over the course of the preceding week. By checking out both the daily rates and the weekly index, and then reading the rate analyses presented at various financial websites, you can get an approximate idea of what the rate situation is and whether or not now is the best time to refinance your home.

Most current mortgage refinance rate charts include access to a refinance calculator that will show how much you would save if you were to refinance your home at the current rate as compared with the rate locked in on your present mortgage.

A general rule of thumb is that if you are planning to move within the next three to five years, refinancing is probably not your best option unless the rates have dropped dramatically in a short period of time, and maybe not even then. Your ‘break-even point’ is the number of years it will take you to ‘break even’ after factoring in the cost of the refinance. Typically this will take at least three to five years.

Keep in mind that refinancing always includes closing costs that can run into thousands of dollars. Closing costs include legal fees, documentation fees, title insurance, appraisals, points (a percentage of the amount financed that you pay up front to reduce the interest rate), and mortgage origination fees. You will also be required to pay homeowner insurance for a year in advance and any taxes due that year.

Because of all these fees and associated costs, sometimes it is better and cheaper to keep your higher interest rate and just pay down the principal by making higher payments. This can save as much money as refinancing, or even more, without the closing costs.

Often people refinance from a 30 to a 15 year mortgage without realizing they can create their own 15 year mortgage (most of the time: check your terms to be certain) by just making additional principal payments.

For instance, if you currently pay $699 each month on a fixed rate 30-year mortgage on $100,000 at 7.5% and your have 25 years left, you can cut that remaining 25 years in half by paying $959 each month instead. The total savings over the life of the loan amounts to $62,215.00.

If you refinance at 6% for 15 years and pay one point and closing costs, your payment will be $844 but it will cost you almost $2700 (or more) and the savings over the life of the loan will be about $57,800. You actually save $4400 by keeping your current mortgage and just paying extra each month.

For more information on current mortgage refinancing rates and a variety of calculators to help you make mortgage related decisions, visit www.bankrate.com and click on ‘mortgage calculators’ or go to http://www.bankrate.com/brm/calculators/mortgages.asp.