2 reasons why mortgage rates could rise in 2021

Are you considering a mortgage refinance? Act now to save the most money. (iStock)

If you are considering refinancing your home at the lowest possible rate, your window may close. The coronavirus pandemic has made refinancing your home more attractive and affordable – but things could change quickly in the next few months.

To make sure you get low mortgage rates, start with your refinancing application today. Multi-creditor market Credible can help you compare mortgage rates and lenders by leading you through the entire process at a distance. Fill in a few simple questions and see if you can save money.

Mortgage rates have reached historic lows, thanks to actions by the Federal Reserve in March 2020 to help strengthen the economy amid the pandemic. Given this news, it is not surprising that mortgage refinancing is booming. Homeowners want to get a better mortgage rate, the term of the mortgage and reduce their monthly payment in the process.

However, the new adverse housing tax on the Federal Housing Finance Agency, which is equal to 0.5% of a total refinancing loan, has already made refinancing more expensive. As of December 1, all consumers who refinance their mortgage with a balance of more than $ 125,000 must pay an additional fee. And this could be just the tip of the iceberg.

Will mortgage rates rise?

If you want to avoid even more costs (and headaches), then you may want to refinance your home now. Here are two reasons why mortgage rates could rise soon:

  1. Economic recovery
  2. Distribution of COVID-19 vaccines

1. Economic recovery

The Harvard Business Review reports that the global economy is recovering faster than expected. They speculate that at least part of the reason the economy is recovering so quickly is that many fears, including the next Great Depression, have never happened. In addition, while unemployment rates have risen, it is lower than experts anticipated.

The real estate market suffered hard, with sales and listings remaining constant. While the Federal Reserve predicted that it would keep its rates close to zero by 2023, an improving economy could change that.

It is crucial that you work to qualify for the lowest possible mortgage rates. With Credible, you can find out your estimated rate and monthly payment in minutes. Plus, it’s free!


2. Distribution of COVID-19 vaccines

The potential for a viable coronavirus vaccine encouraged a slight increase in mortgage rates the following week after Pfizer and BioNTech announced on November 18 that their phase 3 trial was over. theirs is the announcement. Now, as people in the United States are given the vaccine, consumer and investor confidence is likely to grow – and mortgage rates could continue to rise with it.

While most financial experts agree that the Federal Reserve is unlikely to raise core mortgage rates soon, mortgage rates could move away from record lows in the next few weeks and months.

If a mortgage refinancing option, take some time now to research so that you can maximize your savings. Go to Credible to compare loan rates and options between multiple lenders with fewer forms to fill out.

Here’s how the new mortgage refinancing fee affects you

Today’s mortgage rates

At the time of publication, here are the average mortgage rates for the following, according to Freddie Mac:

  • 30-year average fixed rate mortgage: 2.71%
  • 15-year fixed-rate average mortgage: 2.26%

These low rates have led many homeowners to refinance their current mortgage loans at lower rates.

To decide what is best for you, it may be helpful to explore the mortgage options available at today’s rates. You can visit Credible to easily compare mortgages by rates and loan terms without affecting your credit score.


Should I refinance my mortgage?

Not sure if refinancing your home loan is the right decision? While lower interest rates may benefit many homeowners, refinancing may not be the best decision for some consumers.

There are three questions you should ask before signing the dotted line.

1. Are you planning to move? Homeowners who intend to remain in their current ownership for at least five years will benefit the most from refinancing. You should aim to earn at least the cost of refinancing your savings before you move, and this can take several years, depending on how much money you save on your mortgage each month. As you think about refinancing, make sure you visit Credible to get in touch with experienced loan officers to get your mortgage questions answered.

2. How much time do you have on loan? If you only have a few years left on your mortgage, refinancing can cost you more money or extend the time you still have to pay on your loan. to do the calculations. An online mortgage calculator can help you decide whether refinancing a 15-year fixed rate mortgage is worth the cost.

3. How is your credit? To qualify for the best interest rates available, you will need a healthy credit score. Lenders have tightened requirements as low interest rates have attracted more consumers. Before applying, consider reducing other debts and checking for any errors in your credit report that could affect your score. Want to see if you qualify? Go to Credible to get pre-qualified mortgage rates without affecting your credit score.


The decision to refinance your home is an important decision. Using a site like Credible is a useful way to make sure you’re ready when you decide to move on. Credible allows you to view pre-qualified rates from multiple lenders in one place. Visit Credible today to get started.