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10-Year Mortgage Refinance Rates
With interest rates at record lows right now, many homeowners are looking into mortgage refinancing to save some money. A mortgage refinance could shave thousands off your loan, but just because interest rates are low doesn’t mean you should rush into a refinance without weighing all the pros and cons first. The last thing you want is to be celebrating your low interest rates while struggling to keep on top of high monthly payments or closing costs.
You need to go into any refinancing journey with a full picture of what your new loan would look like, including information on the lenders you may want to consider. To determine the best 10-year mortgage rates for refinancing in 2020, we compared several lenders’ interest rates, loan terms, fees and more using our SimpleScore methodology.
According to Bankrate’s latest survey of the nation’s largest mortgage lenders, these are the current refinance average rates for a 30-year, 15-year fixed and 5/1 adjustable-rate mortgage (ARM) refinance rates among others.
|30-Year Refinance Rate||3.300%||3.430%|
|30-Year FHA Refinance Rate||2.900%||3.740%|
|30-Year VA Refinance Rate||3.000%||3.220%|
|30-Year Jumbo Refinance Rate||3.330%||3.380%|
|20-Year Fixed Refinance Rate||3.140%||3.320%|
|15-Year Fixed Refinance Rate||2.540%||2.720%|
|15-Year Jumbo Refinance Rate||2.540%||2.590%|
|10/1 ARM Refinance Rate||3.250%||3.980%|
|5/1 ARM Refinance Rate||3.070%||4.030%|
|5/1 ARM Jumbo Refinance Rate||3.040%||3.960%|
|7/1 ARM Refinance Rate||3.100%||3.890%|
|7/1 ARM Refinance Jumbo Rate||3.190%||3.870%|
Rates data as of 3/4/2021
The 5 best 10-year mortgage refinance companies
- Best for fast service: LoanDepot
- Best mobile app: Huntington Bank
- Best for no-cost refinance: US Bank
- Best for no fees: Third Federal
- Best for online applications: BBVA
10-year mortgage refinance companies at a glance
|Lender||Rates (APR)||Min. Credit Score|
|Third Federal||2.39% (2.560%)||Not Listed|
What is a 10-year mortgage refinance?
A 10-year mortgage refinance is an option for those who wish to shorten their mortgage terms and pay their loans off faster. Many people opt for a 30-year mortgage when first buying their homes, but after a few years, refinancing may be a great way to chip away at your loan faster.
A mortgage refinance is a new loan agreement which means there will be a new interest rate, different monthly payments and new closing costs to cover. Whether refinancing to a 10-year mortgage is the right choice depends on many different factors and personal circumstances.
How 10-year mortgage refinances work?
Refinancing a mortgage follows a similar process as applying for a mortgage in the first place. You will need to do plenty of research and shop around for the best rates and loan terms. Any rates should be compared to your current rate and monthly costs to determine whether you would be better off with a refinance.
You also need to make sure that you can afford this type of loan, because while you may get a lower rate for a 10-year loan, you’ll have to swing expensive monthly payments. You’re shortening the time in which you’ll be paying off your loan, so make sure you can actually afford to make your mortgage payments before starting the process.
Once you are happy with the rates from a lender and certain you can afford this type of refinance, you will need to apply and submit all the necessary paperwork for approval. Once you are accepted, you will have to pay closing costs on the loan, so this is important to bear in mind while weighing up the costs.
New mortgage terms
When refinancing your home, you will be taking out a loan with completely different mortgage terms. Interest rates, loan terms and other fees could look very different from your current agreement.
As mentioned, with a 10-year refinance, you will have to make larger monthly payments as it’s a shorter loan term, so you will need to work out if you can afford this. The lender you apply with will want to see evidence that you can make these monthly repayments, particularly if they are substantially greater than your current payments.
10-year refinance vs. other mortgage refinance
Homebuyers have several choices when it comes to refinancing a home. You could opt for another 30-year loan term, which would typically offer lower monthly payments but will cost more in interest overall.
There’s also the option of a 15-year refinance, which will save on interest rates but will have higher monthly costs. The 10-year refinance drastically cuts the length of your mortgage down, but this comes with much higher repayments than a 30-year agreement.
As well as fixed-rate mortgages, you can also go for adjustable-rate loans called ARMs. A 30-year 10/1 ARM has a fixed rate for the first 10 years of the loan followed by an adjustable-rate that can change every year after. There are also 3/1, 5/1, 7/1 and 10/1 ARM options.
Pros and cons of a 10-year mortgage refinance
- Pay off your mortgage faster
- Save on interest over the life of the loan
- Lower interest rates compared to other loans
- 10-year refinance mortgage rates have higher monthly repayments
- It might take a while to break even on the closing costs
How to choose the best 10-year mortgage refinance for you
- Decide on your financial goals. Are you looking to pay off your loan as fast as possible, build up equity or lower your monthly payments? These goals will determine which loan term is best for you. If you are looking for lower monthly payments, a 10-year refinance may not be the best choice for you.
- Work out your equity and credit score. Two things that lenders will want to know is how much equity you have in your home and what your credit score looks like. With this information, lenders will be able to give you personalized rates to compare.
- Shop around for the best rates. If you decide that a 10-year refinance is what you want, you will need to do some research into different lenders. Each lender will set their terms, interest rates, fees and requirements. Many lenders will only offer 30- or 15-year refinancing loans, so you will need to find a lender that offers 10-year mortgage rates as well.
- Find out the closing cost terms. Some lenders will allow you to add the closing costs to the loan principal, which can help make the upfront costs more manageable but will add to both your principal and interest totals. Others will want these closing costs paid upfront, so this is something you will need to factor into your lender choice.
We welcome your feedback on this article and would love to hear about your experience with the lenders we recommend. Contact us at firstname.lastname@example.org with comments or questions.