Mortgage rates begin to tick back up: Why homeowners should take advantage of low refinance rates now

Mortgage interest rates started to tick back up this week amid an improving U.S. economy, increasing to 2.8% from 2.78% the week prior for a 30-year fixed-rate mortgage, according to the latest Primary Mortgage Market Survey from Freddie Mac.

The economy also grew 6.5% in the second quarter of 2021 as it works to recover from the devastating coronavirus pandemic, the Bureau of Economic Analysis reported.

"As the economy works to get back to its pre-pandemic self, and the fight against COVID-19 variants unfolds, owners and buyers continue to benefit from some of the lowest mortgage rates of all-time," Freddie Mac Chief Economist Sam Khater said. "Largely due to the current environment, the 30-year fixed-rate remains below 3% for the fifth consecutive week while the 15-year fixed-rate hits another record low."

Homeowners may want to consider refinancing their mortgage to take advantage of these record-low rates before the rise even higher. Doing so can help you lower your monthly payment, pay off existing debt and reduce your loan term. To lock in your loan rate now before interest rates start to increase, visit Credible and get prequalified in minutes without affecting your credit score.

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Though 30-year mortgage rates are going up, the average interest rate for a 15-year fixed-rate mortgage reached its lowest level ever of 2.1%. That is a drop from 2.12% last week, and down from 2.51% from this time last year.

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) also decreased to an average 2.45% this week, down from last week when it averaged 2.49%. A year ago at this time, the five-year ARM averaged 2.94%.

Consider using an online mortgage calculator to determine potential monthly payments. Through Credible, you can plug in your numbers to see your estimated mortgage rates and monthly payments.

COVID-19 DELTA VARIANT COULD AFFECT RATES, MORTGAGES, ECONOMIST PREDICTS

After its July meeting this week, the Federal Reserve announced it would keep the federal funds rate at 0%. And while mortgage rates are impacted by this decision because they tend to follow the federal funds rate, many economists forecast mortgage rates will continue to increase in the second half of 2021. 

"We expect mortgage rates to fluctuate near historic lows through the summer before beginning to climb this fall," realtor.com Chief Economist Danielle Hale said in a statement. "Those who haven’t yet taken advantage of low rates to buy a home or refinance still have the opportunity to do so this summer."

If you have yet to refinance and want to save on your monthly payment, consider a mortgage rate lock to hold your low interest rate now before current mortgage rates begin to rise. Visit Credible to compare rate quotes from multiple lenders at once and choose the terms that best fit you.

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