Reduced rates on all loans

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Average mortgage refinancing rates today were in all directions. Keeping track of trends in mortgage rates is a smart move for homeowners who may decide refinancing is a smart choice if it can save them money.

Here are the average mortgage refinancing rates as of Friday, August 20:

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Refinancing rates for a 30 year mortgage

The average 30-year mortgage refinancing rate today is 3.104%, down 0.008% yesterday’s average 3.112%. Refinancing at today’s average rate will leave you with a monthly principal and interest payment of $ 427 on a $ 100,000 mortgage debt. Your total interest expense over the life of your refinancing loan is $ 53,804 for every $ 100,000.

Mortgage refinancing rates for 20 years

The average 20-year mortgage refinancing rate today is 2.847%, down 0.005% from the 2.852% average yesterday. The refinancing loan at today’s average rate will be accompanied by a monthly principal and interest payment of $ 547 per $ 100,000. Over the life of the refinancing loan, the total interest expense is $ 31,273 for every $ 100,000 in mortgage debt.

This loan results in higher monthly payments than a 30 year refinancing loan because you make 120 fewer payments. But over time, you will save a lot of money by paying ten years less interest.

Mortgage refinancing rates for 15 years

The average 15-year mortgage refinancing rate today is 2.371%, down 0.008% from the 2.379% average yesterday. At today’s average rate, the monthly principal and interest payments would be $ 661 per $ 100,000 of refinanced mortgage debt. The total interest cost will be $ 18,932 per $ 100,000 refinanced at today’s average rate.

With half the repayment time compared to a 30 year loan, this mortgage will save you a lot of money over time. However, this also means that the monthly payments will be much higher. Consider whether they will be available in the long run.

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 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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