Average mortgage refinancing rates today in all directions. While it can be difficult to pinpoint when to get a refinancing loan, homeowners should still pay attention to the rate dynamics so they can get a good idea of whether the time is right to refinance their loan.
Check out today’s average mortgage refinancing rates as of August 17, 2021:
Refinancing rates for a 30 year mortgage
The average 30-year mortgage refinancing rate today is 3.120%, down 0.008% yesterday’s average 3.128%. If you refinance at today’s average rate, your monthly principal and interest payment will be $ 428 for every $ 100,000. Over the life of the refinancing loan, the total interest expense is $ 54,117 for every $ 100,000 in mortgage debt.
Mortgage refinancing rates for 20 years
The average 20-year mortgage refinancing rate today is 2.862%, down 0.001% from the 2.863% average yesterday. At today’s average rate, the monthly payment of principal and interest would be $ 548 per $ 100,000 of refinanced mortgage debt. The total interest expense will be $ 31,463 for every $ 100,000 borrowed over the term of the loan refinancing.
Although your monthly payments are higher, if you refinance a 20 year loan versus a 30 year loan, you will save more over time with this loan option. Your savings are due to the fact that you do not pay interest for that long, as well as a lower rate.
Mortgage refinancing rates for 15 years
The average 15-year mortgage refinancing rate today is 2.389%, down 0.004% from the 2.393% average yesterday. You would look at the principal and interest payments of $ 662 on $ 100,000 refinanced at today’s average rate. The total interest cost will be $ 19,084 per $ 100,000 refinanced at today’s average rate.
With such a short maturity, a 15 year refinancing loan over time proves to be much cheaper than the 30 or 20 year loan options. But of course, when you pay off the loan in half the time, each monthly payment should be higher.
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 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.