September 19, 2021

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Mortgage News

Rates Fall Slightly for 15-Year Loan

average Mortgage refinancing rates are largely stable today, with the 30-year-olds unchanged, the 20-year-olds slightly up and the 15-year-olds slightly down. Homeowners who currently have a more expensive home loan may want to consider refinancing, provided they plan to stick with their home loan enough to cover the closing costs with their interest savings.

Here are today’s average mortgage rates for Thursday, August 19th so you can see if a refinance makes sense for you:

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30 year mortgage refinancing rates

The average 30-year mortgage refinancing rate is 3.112% today, unchanged from yesterday Average. For every $ 100,000 refinanced at today’s average interest rate, your total monthly principal and interest payment would be $ 428. For the life of the loan, you would pay a total interest cost of $ 53,961 for every $ 100,000 refinanced.

20 year mortgage refinancing rates

The average 20-year mortgage rate is 2.852% today, up 0.003% from yesterday’s average of 2.849%. A mortgage loan at today’s average interest rate would cost you $ 547 for every $ 100,000 borrowed. The total interest cost over the life of the refinancing loan would be $ 31,332 per $ 100,000 mortgage debt.

Although your monthly payments are higher on a 20 year refinance loan than a 30 year refinance, you will save a lot of money over time. If you pay back your loan faster, you will pay less interest because you won’t be paying it for as long – but each payment must be much higher to repay the principal in full.

Mortgage refinancing over 15 years

The average 15-year mortgage loan rate is 2.379% today, a decrease of 0.001% from yesterday’s average of 2.380%. At today’s average rate, you’d pay $ 661 per month in principal and interest for every $ 100,000 that is refinanced. For every $ 100,000 you refinance at today’s average rate, the total cost of interest would add up to $ 18,999.

If you can afford the higher monthly payments that come with such a short payout period, you can decide that it makes financial sense for you to choose the 15 year refinancing loan. Just make sure you consider the opportunity cost of putting so much money into mortgage payments every month.

Should You Refinance Your Mortgage Now?

Refinancing your mortgage can be a wise financial decision if you are able to lower your interest rate and lower your monthly payments by securing a new home loan. However, there are a few important things to think about before going for a refinance.

First, as you extend the life of your loan, over time you can pay a higher total interest cost than your existing mortgage. This can be the case even if you qualify for a lower interest rate as you would be paying interest over a longer period of time. You can avoid this problem by opting for a refinancing loan with a shorter term. Or you decide that you are willing to pay more interest in exchange for a lower monthly payment for the life of your loan.

Second, you need to consider closing costs, which are the upfront fees that you will be charged when you refinance your mortgage. Research by the Ascent has shown that Closing costs of a refinancing loan for an average home value of $ 5,000 to $ 12,500. However, your closing fees will depend on your home loan size, your location, and your lender.

You should eventually make up for these closing costs with your lower monthly payments – but that can take time. If you were saving $ 200 per month on refinancing and paying $ 6,000 in closing costs, it would take you 2.5 years to break even. It’s important to do the math and consider whether you will be staying in your home long enough for the refinance to pay off.

In general, refinancing makes sense if you cannot move in the next few years and can lower your mortgage interest rate by 1% or more. With mortgage refinancing rates near record lows, many borrowers will find that it is a good time to refinance. Compare prices from the best mortgage lender to receive individual quotes and decide whether a new home loan is right for you now.