August 31, 2021 mortgage refinancing rates fell on most loans. Check out the average mortgage refinancing rates for 30-year, 20-year and 15-year fixed rate loans to get an idea of how much you would pay in interest if you refinanced your home loan today:
6 simple tips to secure a 1.75% mortgage rate
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Refinancing rates for a 30 year mortgage
The average 30-year mortgage refinancing rate today is 3.115%, up 0.009% yesterday’s average 3.124%. For every $ 100,000 refinanced at today’s average rate, your monthly payment of principal and interest is $ 428. The total interest expense will be $ 54,019 for every $ 100,000 borrowed over the term of the loan refinancing.
Mortgage refinancing rates for 20 years
The average 20-year mortgage refinancing rate today is 2.818%, down 0.012% from yesterday’s average of 2.830%. For every $ 100,000 refinanced at today’s average rate, your total monthly principal and interest payment is $ 546. You will be required to pay a general interest expense of $ 30,927 for every $ 100,000 refinanced throughout the loan repayment period.
As you can see, you have to pay more each month with a 20 year refinancing loan than with a 30 year refinancing loan. But over time, you will really save on interest by reducing your maturity by ten years.
Mortgage refinancing rates for 15 years
The average 15-year mortgage refinancing rate today is 2.390%, down 0.008% from the 2.398% average yesterday. If you refinance at today’s average rate, your monthly principal and interest payment will be $ 662 for every $ 100,000. You would look at a total interest expense of $ 30,927 on $ 100,000 of refinanced mortgage debt over the life of the loan.
This loan provides the lowest total refinancing cost compared to a 20 and 30 year loan because you have a low rate and you will not pay interest for that long. But you must be prepared for much larger monthly payments due to the short payout times.
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 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 factor in 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 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.