Interest rates on most loans fell

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June 25, 2021 average mortgage refinancing rates fell on most loans, but not on a 15-year fixed rate refinancing loan. To decide if it makes sense for you to get a new home loan, compare today’s average rates to the rates you are currently paying. However, keep in mind that your rate may differ slightly from the average depending on your financial profile.

Here are the average rates for Friday, June 25, to date, so you can get an idea of ​​how much a refinancing loan might cost:

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Refinancing rates for a 30 year mortgage

The average 30-year mortgage refinancing rate today is 3.328%, down 0.007% from the 3.335% average yesterday. A mortgage refinancing loan at today’s average interest rate will cost you $ 439 for every $ 100,000. Throughout the loan repayment period, you will be required to pay a general interest expense of $ 58,220 for every $ 100,000 refinanced.

Mortgage refinancing rates for 20 years

The average 20-year mortgage refinancing rate today is 3.067%, down 0.011% from the 3.078% average yesterday. If you refinance at today’s average rate, you will have a monthly principal and interest payment of $ 558 for every $ 100,000 borrowed. You will be looking at a total interest expense of $ 33,910 on the $ 100,000 refinanced mortgage debt over the life of the loan.

Over time, the interest expense on this loan is lower than on a 30 year fixed rate mortgage because you don’t pay interest for that long. But the fewer payments, the higher each of them.

Mortgage refinancing rates for 15 years

The average refinancing rate of a mortgage loan for 15 years today is 2.646%, which is 0.012% higher than yesterday’s average of 2.634%. You would look at the principal and interest payments of $ 674 per $ 100,000 refinanced at today’s average rate, and the total interest cost would be $ 21,263 per $ 100,000 refinanced.

With such a short repayment period, this loan provides significant interest savings – especially since the rate is also very low. But you will have to make much higher monthly payments, which can be difficult to fit 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 think about before refinancing.

First, if you extend the maturity of your loan, you can pay higher overall interest costs 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 factor in closing costs, which are the upfront payments you will pay to refinance 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, 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.

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