The refinancing rate for mortgages rose again on March 18th. When considering a refinance, take a look at today’s average rates.
Usually, when considering refinancing, it only makes sense if you can get your interest rate down. So it is important to keep track of things Refinancing rates for mortgages. These rates have moved up from recent record lows, but are still pretty competitive compared to historical norms.
See the average mortgage refinance rates on March 18, 2021 to see how today’s rates compare to the rates you are currently being charged on your home loan.
30 year refinancing rates for mortgages
The average interest rate for the refinancing of mortgage loans with a term of 30 years is now 3.353%, which is 0.017% above the value Yesterday’s average of 3.336%. At today’s average rate, you would be paying $ 441 per month in principal and interest per $ 100,000 refinanced. The total cost of interest would add up to $ 58,717 per $ 100,000 refinanced over the life of the loan.
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20-year refinancing rates for mortgages
The average interest rate for refinancing mortgages with a term of 20 years is 3.051% today, which is 0.006% above yesterday’s average of 3.045%. If you refinance at today’s average rate, your monthly principal and interest payment will be $ 557 for every $ 100,000 borrowed. Over the life of the refinancing loan, your total interest cost would add up to $ 33,645 per $ 100,000 borrowed.
Refinancing loans with shorter maturities have a lower total cost of interest than loans with longer payback periods. That’s because you won’t be paying interest that long. Unfortunately, even though the 20 year loan has a lower interest rate than the 30 year loan, the reduced payout period still means you will have much higher monthly payments. However, this tradeoff can be worthwhile as your loan will cost so much less over time.
15-year refinancing rates for mortgages
The average mortgage loan refinancing rate with a term of 15 years is now 2.653%, 0.116% higher than yesterday’s average of 2.637%. A refinancing loan at today’s average rate would involve a monthly principal and interest payment of $ 674 per $ 100,000 borrowed. You would look at a total interest expense of $ 21,323 per $ 100,000 of mortgage debt over the life of the loan.
The interest rate on a 15 year refinancing loan is much lower than that of a 20 year or 30 year loan, but the payments are still higher – again due to this reduced payback period. However, the interest savings are substantial and you are debt free in half the time compared to a 30 year loan if you choose this option.
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 starting refinance.
First, if you extend your loan repayment term, you could end up paying a higher total interest cost over time than you would with your existing mortgage. This can happen 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 choosing a refinancing loan with a shorter repayment period. Or you decide that you are willing to pay more interest over the life of your loan in order to receive a reduced monthly payment.
Second, you need to consider closing costs. These are the upfront fees that you will have to pay when you refinance your mortgage. Research of the ascension found that Closing costs for a refinancing loan for a home value with an average value between $ 5,000 and $ 12,500. However, your closing fees will depend on your home loan size, your location, and your lender.
You may find that you should recoup these closing costs due to your lower monthly payments – but it may take some time. If you saved $ 200 a month by refinancing and paid $ 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 refinancing to pay off.
In general, refinancing is a good idea if you have no plans to move in the next few years and can cut your mortgage 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 refinance lender to get some personalized quotes and decide if securing a new home loan is right for you now.