Mortgage refinancing rates lower today than Friday. Refinancing rates are generally slightly higher than the rates you will see for a new mortgage, but they are extremely competitive right now, historically speaking. This is what they look like on Monday, August 2:
Refinancing rates for a 30 year mortgage
The average 30-year refinancing rate today is 3.052%, down 0.005% from Friday. At today’s rate, you will pay principal and interest of $ 424.00 for every $ 100,000 you borrowed. This does not include additional costs such as property taxes and homeowner insurance premiums.
Mortgage refinancing rates for 20 years
The average 20-year refinancing rate today is 2.811%, down 0.001% from Friday. At today’s rate, you will pay principal and interest of $ 545.00 for every $ 100,000 you borrowed. Although your monthly payment will increase by $ 121.00 on a 20-year loan of $ 100,000 compared to a 30-year loan of the same amount, you will save $ 21,902 in interest over the repayment period for every $ 100,000. which you borrowed.
Mortgage refinancing rates for 15 years
The average refinancing rate for 15 years today is 2.328%, which is 0.017% lower than on Friday. At today’s rate, you will pay $ 659.00 in principal and interest for every $ 100,000 you borrowed. Compared to a 30-year loan, your monthly payment will be $ 235.00 more for every $ 100,000 in your mortgage principal. However, your interest savings will be $ 34,140 during the repayment period for every $ 100,000 in mortgage debt.
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 with a new home loan. However, there are a few important things to think about before refinancing.
First, if you extend the maturity of your loan, you can pay out a higher amount of interest 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 over a longer period. You can avoid this 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 need to consider closing costs, which are the down payments 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 specific mortgage amount, your location, and your lender.
Ultimately, you will 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, it will take you 2.5 years to break even. It’s important to do the math and consider whether you will stay in your home long enough for the refinancing to pay off.
Generally speaking, refinancing can make a lot of sense if you are not going to move in the next few years and can lower your home loan interest rate by at least 1% (or somewhere else). And if you want to improve your chances of getting a competitive rate, do your best to maintain a high credit rating – ideally between an average of 700 or higher. Lenders tend to reward borrowers with more credit in the form of lower interest rates.
If you are ready to get a new mortgage, choose different refinancing lenders and see what rates and closing costs they are willing to pay you. Comparing offers is a good way to get a really good deal on a new home loan.