September 3, 2021, average mortgage refinancing rates on all loans. While these rates are above recent record lows, they are still low at their historic average, so many homeowners who have not recently refinanced may want to consider doing so.
Here are today’s average mortgage refinancing rates:
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 3.098%, down 0.008% yesterday’s average 3.106%. For every $ 100,000 refinanced at today’s average rate, your monthly payment of principal and interest is $ 427. For the entire repayment period of the loan, you must pay a general interest expense of $ 53,687 for every $ 100,000 refinanced.
Mortgage refinancing rates for 20 years
The average 20-year mortgage refinancing rate today is 2.784%, down 0.016% from the 2.800% average yesterday. If you refinance at today’s average rate, you will have a monthly principal and interest payment of $ 544 for every $ 100,000 borrowed. You would look at a total interest expense of $ 30,523 on $ 100,000 of refinanced mortgage debt over the life of the loan.
A 20 year refinancing loan will be cheaper over time than a 30 year refinancing loan because you have a lower interest rate and you do not pay interest for that long. But your monthly payments on this loan are higher as you don’t pay that much.
Mortgage refinancing rates for 15 years
The average 15-year mortgage refinancing rate today is 2.375%, down 0.014% from the 2.389% average yesterday. If you refinance at today’s average rate, your monthly principal and interest payment will be $ 661 for every $ 100,000. For every $ 100,000 you refinance at today’s average rate, the total interest expense is $ 18,966.
This loan comes with a very short maturity and low interest rate, which together make the total cost very low over time. Of course, the big tradeoff for these low costs is that each monthly payment must be much higher to pay off the entire mortgage balance in just 15 years.
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 receive personalized offers and decide if a new home loan is right for you.