Some property owners can save money by refinancing their current home loans. See the average for today mortgage refinancing rates on 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 refinancing rates:
Refinancing rates for a 30 year mortgage
The average 30-year mortgage refinancing rate today is 3.168%, down 0.033% yesterday’s average 3.201%. At today’s average rate, you will pay $ 431 a month in principal and interest for every $ 100,000 refinanced. The total interest expense will be $ 55,059 for every $ 100,000 borrowed over the life of the refinancing loan.
Mortgage refinancing rates for 20 years
The average 20-year mortgage refinancing rate today is 2.928%, down 0.042% from yesterday’s average of 2.970%. A loan at today’s average rate will cost you $ 551 a month in principal and interest for every $ 100,000 you refinance. Your total interest expense over the life of your refinancing loan is $ 32,240 for every $ 100,000.
When you refinance a loan with a shorter maturity, each monthly payment must be higher than for a 30 year refinancing loan. But you will get rid of debt faster and pay less interest over time.
Mortgage refinancing rates for 15 years
The average rate on a 15-year mortgage loan today is 2.482%, down 0.033% from the 2.515% average yesterday. If you refinance at today’s average rate, your monthly principal and interest payment will be $ 666 for every $ 100,000. Over the life of your refinancing loan, your total interest expense is $ 19,870 for every $ 100,000.
The total interest expense on this loan will be very low and you will get free of your mortgage much faster than with a 20 or 30 year refinancing loan. Of course, your monthly payments should be much higher while you are making them.
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 if you do not plan to move 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 this is a good time to refinance. Compare rates from best mortgage refinance lenders to get personalized offers and decide if getting a new home loan is right for you.