If you are considering refinancing your home loan, you may want to know the trend for average mortgage refinance rates. You can make the decision to refinance when rates drop to save more than your current loan interest rate.
Check out today’s average mortgage refinance rates for Tuesday, September 14:
6 simple tips to get a 1.75% mortgage rate
Secure access to The Ascent’s free guide on how to get the lowest mortgage rate on your new home purchase or when refinancing. Rates are still at their lowest for decades, so act today to avoid missing out.
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30-year mortgage refinancing rate
The 30-year average mortgage refinance rate today is 3.117%, down 0.003% from yesterday’s average of 3.120%. A loan at the current average rate would cost you $ 422 per month in principal and interest for every $ 100,000 you refinance. Over the life of the refinance loan, the total interest charge would be $ 54,059 per $ 100,000 of mortgage debt.
20-year mortgage refinancing rate
The 20-year mortgage refinance average rate today is 2.841%, down 0.002% from yesterday’s average of 2.843%. Refinancing at today’s average rate would leave you with a monthly principal and interest payment of $ 547 per $ 100,000 of mortgage debt. The total interest charge would be $ 31,201 per $ 100,000 of mortgage debt over the term of the refinance loan.
If you choose a 20 year over 30 year refinance loan, you can expect to pay more each month because you are not making as many payments. However, you will save more over time since you do not pay interest for such a long period.
15-year mortgage refinancing rate
The 15-year mortgage refinance average rate today is 2.366%, down 0.007% from yesterday’s average of 2.373%. A refinancing loan at the current average rate would carry a monthly principal and interest payment of $ 661 for every $ 100,000 borrowed. Over the life of the refinance loan, the total interest charge would be $ 18,890 per $ 100,000 of mortgage debt.
The 15-year refinance loan shortens the repayment period of your new loan even more than the 20-year loan. This means that the monthly payments are even higher, but the total amount of interest saved over time is considerable. Make sure you weigh the pros and cons of being debt free sooner and paying less over time with higher monthly payments over the life of the loan.
Should You Refinance Your Mortgage Now?
Refinancing your mortgage can be a smart financial move if you are able to lower your interest rate and monthly payments by getting a new home loan. However, there are a few key things to consider before refinancing.
First, if you extend your loan repayment term, you could end up paying higher total interest charges over time than with your current mortgage. This can happen even if you qualify for a lower interest rate since you would be paying interest over a longer period. You can avoid this problem by choosing a refinance loan with a shorter repayment term. Or you may decide that you are willing to pay more interest over the life of your loan in exchange for a lower monthly payment.
Second, you’ll need to factor in closing costs, which are the upfront costs you will be charged when you refinance your mortgage. Ascent’s research found that the closing costs for a refinance loan for a mid-value home are between $ 5,000 and $ 12,500. However, your closing costs will depend on your mortgage amount, location, and lender.
You might need to offset these closing costs because of your lower monthly payments, but it can take time. If you save $ 200 a month by refinancing and pay $ 6,000 in closing costs, it would take you 2.5 years to break even. It’s important to do the math and determine if you’ll be staying in your home long enough for the refinancing to pay off.
In general, it’s a good idea to refinance if you don’t plan on moving in the next few years and can lower your mortgage interest rate by 1% or more. With mortgage refinancing rates nearing all-time lows, many borrowers will find it a good time to refinance. Compare the rates of the best mortgage refinance lenders for personalized offers and decide if getting a new mortgage is right for you now.