Mortgage refinancing rates down today. This is good news for borrowers looking to refinance their home loan. Although refinancing rates have risen slightly from recent record lows, there are still excellent opportunities to get an affordable refinancing loan.
Check out the average mortgage refinancing rates as of July 22, 2021 to get an idea of how much it will cost you to refinance your loan:
Refinancing rates for a 30 year mortgage
The average 30-year mortgage refinancing rate today is 3.087%, down 0.028% yesterday’s average 3.115%. At today’s average rate, the monthly principal and interest payments would be $ 426 per $ 100,000 of refinanced mortgage debt. During the term of the refinancing loan, you must pay a general interest expense of $ 53,472 for every $ 100,000.
Mortgage refinancing rates for 20 years
The average 20-year mortgage refinancing rate today is 2.852%, down 0.027% from yesterday’s average of 2.879%. If you refinance at today’s average rate, you will have a monthly principal and interest payment of $ 547 for every $ 100,000 borrowed. The total interest expense would be $ 31,332 for every $ 100,000 borrowed over the term of the loan refinancing.
If you want to save as much as possible on general interest costs when refinancing, choosing a shorter loan maturity makes sense. A 20 year period has a lower interest rate than a 30 year period, and you also pay interest in less time, so your overall costs will be much lower. However, each monthly payment is higher than a 30-year loan.
Mortgage refinancing rates for 15 years
The average 15-year mortgage refinancing rate today is 2.405%, down 0.027% from the 2.432% average yesterday. A mortgage refinancing loan at today’s average interest rate will cost you $ 662 for every $ 100,000. The total interest cost will be $ 19,219 per $ 100,000 refinanced at today’s average rate.
Due to its short repayment time and lower interest rate, this refinancing loan provides maximum savings over time. However, when you make so few payments, each must be quite high, so make sure it fits comfortably into your budget.
Should you refinance your mortgage right now?
Refinancing your mortgage can be a smart financial decision if you can lower your interest rate and lower your monthly payments by getting a new home loan. However, there are a few key points to consider before refinancing.
First, if you extend the maturity of your loan, you can pay a higher overall interest expense over time than with your existing mortgage. This can happen even if you are eligible for a lower interest rate, as you will be paying interest for a longer time. You can avoid this problem by choosing a refinancing loan with a shorter maturity. Or, you may decide that you are willing to pay more interest over the life of the loan in exchange for a lower monthly payment.
Second, you will need to consider closing costs, which are the upfront payments that you will be charged when refinancing your mortgage. Ascent research found that closing expenses on refinancing loan for an average home value of $ 5,000 to $ 12,500. However, the closing fees will depend on the amount of your home loan, your location, and your lender.
You will eventually have to offset these closing costs with lower monthly payments, but this can take time. If you save $ 200 a month through refinancing and pay $ 6,000 to close the deal, it will take you 2.5 years to pay off. It’s important to calculate and consider whether you will stay in your home long enough for the refinancing to pay off.
In general, refinancing is recommended unless you plan on moving in the next few years and can lower your mortgage interest rate by 1% or more. With mortgage refinancing rates close to record lows, many borrowers will feel that now is a good time to refinance. Compare rates from best mortgage refinance lenders to receive personalized offers and decide if a new home loan is right for you.