Average mortgage refinancing rates declined on all loans today. Review the average rates for today and compare them with the rate on your current loan to decide if refinancing makes sense. Remember, you will need your savings to cover your final expenses before you break even, and the more you cut your rate, the faster that will happen.
Here are the average mortgage refinancing rates for Tuesday August 3rd:
Refinancing rates for a 30 year mortgage
The average 30-year mortgage refinancing rate today is 3.041%, down 0.011% yesterday’s average 3.052%. For every $ 100,000 refinanced at today’s average rate, your total monthly principal and interest payments are $ 424. Over the life of your refinancing loan, your total interest expense is $ 52,575 for every $ 100,000.
Mortgage refinancing rates for 20 years
The average 20-year mortgage refinancing rate today is 2.797%, down 0.014% from the 2.811% average yesterday. A mortgage refinancing loan at today’s average interest rate will cost you $ 552 for every $ 100,000. Your total interest expense over the life of your refinancing loan is $ 32,851 for every $ 100,000.
This loan provides more interest savings than a 30 year loan because you will not pay interest for that long and the rate is lower. However, since you don’t make many payments, each one should be higher.
Mortgage refinancing rates for 15 years
The average refinancing rate of a mortgage loan for 15 years today is 2.318%, which is 0.01% lower than yesterday’s average of 2.328%. You would look at the principal and interest payments of $ 658 on $ 100,000 refinanced at today’s average rate. Over the life of the refinancing loan, your total interest expense will be $ 18,486 for every $ 100,000.
The interest savings are greatest on this loan due to the short repayment time and the very low interest rate. But with only 15 years to pay off your loan, you need to make very high monthly payments that can burden 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 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 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 that now 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.