Some homeowners can save money by refinancing their current home loans. Check out today’s average mortgage refinance rates for July 20, 2021 to see how current interest rates compare to the interest you pay. This can help you decide if refinancing makes sense.
Here are today’s average mortgage refinance rates:
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30-year mortgage refinancing rate
The 30-year average mortgage refinance rate today is 3.168%, down 0.033% from yesterday’s average of 3.201%. At today’s average rate, you would pay $ 431 per month in principal and interest for every $ 100,000 refinanced. The total interest charge would be $ 55,059 per $ 100,000 borrowed over the term of the refinance loan.
20-year mortgage refinancing rate
The 20-year mortgage refinance average rate today is 2.928%, down 0.042% from yesterday’s average of 2.970%. A loan at the current average rate would cost you $ 551 per month in principal and interest for every $ 100,000 you refinance. Your total interest charges over the life of the refinance loan would equal $ 32,240 per $ 100,000 borrowed.
When you refinance a loan with a shorter repayment term, each monthly payment must be higher than it would be with the 30 year refinance loan. But you’ll be debt free sooner and pay less interest over time.
15-year mortgage refinancing rate
The 15-year average mortgage refinance rate today is 2.482%, down 0.033% from yesterday’s average of 2.515%. If you refinance at today’s average rate, your monthly principal and interest payment would be $ 666 per $ 100,000 borrowed. Over the life of the refinance loan, your total interest charges would be $ 19,870 per $ 100,000 borrowed.
Your total interest charges will be very low with this loan, and you will be released from your mortgage much faster than with the 20 or 30 year refinance loan. Of course, your monthly payments will have to be much higher while you are making them.
Should You Refinance Your Mortgage Now?
Refinancing your mortgage can be a smart financial move if you are able to lower your interest rate and monthly payments by getting a new home loan. However, there are a few key things to consider before refinancing.
First, if you extend your loan repayment term, you could end up paying higher total interest charges over time than with your current mortgage. This can happen even if you qualify for a lower interest rate since you would be paying interest over a longer period. You can avoid this problem by choosing a refinance loan with a shorter repayment term. Or you may decide that you are willing to pay more interest over the life of your loan in exchange for a lower monthly payment.
Second, you’ll need to factor in closing costs, which are the upfront costs you will be charged when you refinance your mortgage. Ascent’s research found that the closing costs for a refinance loan for a mid-value home are between $ 5,000 and $ 12,500. However, your closing costs will depend on your mortgage amount, location, and lender.
You might need to offset these closing costs because of your lower monthly payments, but it can take time. If you save $ 200 a month by refinancing and pay $ 6,000 in closing costs, it would take you 2.5 years to break even. It’s important to do the math and determine if you’ll be staying in your home long enough for the refinancing to pay off.
In general, it’s a good idea to refinance if you don’t plan to move in the next few years and can lower your mortgage interest rate by 1% or more. With mortgage refinancing rates nearing all-time lows, many borrowers will find it a good time to refinance. Compare the rates of the best mortgage refinance lenders for personalized offers and decide if getting a new mortgage is right for you now.