Is it still a good time to refinance my mortgage?


Even though the historically low interest rates of the 2020s are on the rise, it’s still a good time to refinance your mortgage and save thousands of dollars over the life of your loan. (iStock)

The coronavirus pandemic has added stress to the personal finances of many Americans. Almost a third of Americans said their investments were negatively impacted. Fortunately, the Federal Reserve’s cut in the federal funds rate has given many the opportunity to save one of their most important investments: their homes.

When the federal funds rate was lowered, residential mortgage interest rates fell to historic lows. These record refinancing rates have offered homeowners the opportunity to save thousands over the term of their home loan and hundreds over their monthly payment. Although mortgage interest rates are starting to rise, those interested in refinancing your mortgage still have time to lock in historically low rates.

If you’re ready to refinance, see for yourself how low mortgage refinance rates are and explore your refinancing options by visiting Credible where you can compare dozens of mortgage rates and lenders.


When applying for a new loan, it is understandable to have concerns. Many homeowners are wondering if now is a good time to refinance their home loan, especially as mortgage refinance rates have started to rebound in recent months. Let’s take a look at some of the key questions homeowners are asking themselves as they plan to refinance their mortgage in 2021.

Was 2020 the perfect time to refinance my mortgage?

In general, yes. Mortgage rates hit record lows in 2020 and the absence of unfavorable refinancing fees in the market, Fannie Mae and Freddie Mac charges 0.5% of the loan amount for mortgage refinancing that lenders typically pass on to the buyer, only saved homeowners more money while refinancing. 2020 was a great time to move forward with home loan refinancing, but it’s important to realize that 2021 mortgage rates have always been historically low and refinancing would benefit the average homeowner.

While mortgage refinancing rates are unlikely to return to record lows in 2020, the Federal Reserve has indicated that it plans to hold on to the federal funds rate, a rate that indirectly influences the direction of mortgage interest rates. , stable until 2022 or later. This means that lenders will continue to offer low interest rates on mortgage refinances for the foreseeable future.

If you are considering refinancing, consider using Credible. You can use Credible’s free online tool to easily compare several lenders and see pre-qualified rates.

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Why should I still consider refinancing my mortgage in 2021?

While rates are not as low as they were in 2020, they are still hovering at record highs. It is not known if and when we might see interest rates hit these lows again.

You should consider refinancing your mortgage if your credit score or debt ratio has improved significantly since you first took out your mortgage. You may also want to refinance if you want to stop paying for private mortgage insurance, if you plan to reduce the term of your loan, or if you want to use the equity in your home or if you want a lower payment.

In order to take advantage of the current low rates, you can use an online mortgage refinance calculator to determine your potential new monthly payments and explore various mortgage lenders and rates.


Are there reasons why I shouldn’t refinance in 2021?

Most homeowners will benefit from low interest rates; however, refinancing your home is not the right financial decision for everyone. It doesn’t make sense to refinance if you can’t afford the closing costs or if you plan to move soon – you won’t recoup the closing costs before you sell. You should also refrain from refinancing your home loan if you reduce your credit rate by less than 1%.

Whether you are considering a personal loan, a student loan, a credit card, or a home loan, you can prepare by improving your credit score and lowering your total debt before you apply. You should also shop around to compare the rates of several mortgage lenders to make sure you are getting the lowest rate available. Keep in mind that online lenders may be able to offer a lower rate than your local bank or credit union.

Visit Credible to connect with experienced loan officers who are ready to answer all of your mortgage refinancing questions.

Have a financial question, but don’t know who to ask? Email the Credible Money Expert at [email protected] and your question could be answered by Credible in our Money Expert column.

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