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2021 Mortgage Refinancing Rates

 Thursday, September 16    CCCU

2021 Mortgage Refinancing Rates


The uncertainty and disrupted day-to-day life from last year paved the way for historically low interest rates.

At the close of 2020, mortgage rates dipped to 2.68% and averaged out at 3.11% for the entire year. While interest rose slightly beginning in 2021, monthly averages have remained low this year. As of August 2021, the average for 30-year mortgages is 2.87%.

Our community credit union offers a breakdown of the data, insight into the trends, and how refinance rates compare to purchase rates as well as what this means for buyers and current homeowners looking to refinance.

Record-low interest in 2021

When people talk about historically low or record-low interest, they mean borrowing money is more affordable than ever. Lots of folks are taking advantage of the drop, especially those planning to enter the housing market, as well as those already in it.

Mortgage refinance rates vs. purchase rates

On average, mortgage refinance rates are slightly higher than purchase rates. Why? Borrowers are statistically more likely to default on a refi, so lenders take on a higher risk.

All that said, the average interest rate for refinancing a 30-year loan is currently 2.92%, barely higher than the purchase average of 2.87%. In any case, as long as your new rate is at least one percentage point lower than your current rate, a refinance will likely be financially beneficial.

Pay off your home sooner with a 15-year refinance

Some refinance with the goal of paying off their homes sooner. Mortgage rates on 30-year fixed-rate home loans are notably low in 2021, but interest on 15-year loans is even lower. The most recent average in 2021 was 2.18%, a slight drop from last year’s annual average of 2.61%.

When you secure a lower rate, you could knock off hundreds of dollars in monthly interest. If you can continue paying the same amount each month with more going toward the principal, you could own your property in full sooner than later.

Average mortgage rates since 2000

When you look at average interest rates on 30-year fixed-rate mortgages over the last couple of decades, you can see how drastically different the current numbers are. We broke down the averages in five-year intervals from 2000 through 2020:

● 2000: 8.05%
● 2005: 5.87%
● 2010: 4.69%
● 2015: 3.85%
● 2020: 3.11%

The U.S. housing market ballooned in 2015 when rates were a remarkably low 3.85%, less than half the rate in 2000. In 2021, the rate is nearly a full percentage point lower than 2015. While that might not seem like much, it can add up to tens of thousands of dollars in savings throughout the life of a loan.

Mortgage rate forecasting: what's next?

Though mortgage interest rates have fluctuated slightly throughout 2021, they've stayed considerably low. No one can say for sure where the trend is headed, but real estate experts predict interest will spike before 2022.

Forecasts say mortgage interest will likely average out at somewhere between 3.25% and 3.5%. Of course, this is still substantially lower than recent years, but to lock in the lowest rate possible, you might want to take action soon.

Mortgage refinancing from our Portland metro credit union

If you want to capitalize on record-low interest rates in 2021, CCCU is here to assist. From the Portland metropolitan area to Hood River, members of our community credit union have access to buyer-friendly home loans, helpful mortgage solutions, and very favorable refinancing options, often with rates lower than the national average.

Join today or contact us to learn more about our flexible lending programs.


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