Rising rates in all areas
On the last day of September, average mortgage refinance rates are up for all loans. If you’re a current home owner, check out today’s average mortgage refinance rates to help you decide if it’s the right time to refinance your home loan:
6 simple tips to get a 1.75% mortgage rate
Secure access to The Ascent’s free guide that reveals 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 3.236%, up 0.027% from yesterday’s average of 3.209%. At today’s average rate, you would pay $ 434 per month in principal and interest for every $ 100,000 refinanced. Over the life of the refinance loan, your total interest charges would be $ 56,398 per $ 100,000 borrowed.
20-year mortgage refinancing rate
The 20-year mortgage refinance average rate today is 2.936%, up 0.056% from yesterday’s average of 2.880%. A loan at the current average rate would cost you $ 551 per month in principal and interest for every $ 100,000 you refinance. The total interest charge would be $ 32,336 per $ 100,000 borrowed over the life of the refinance loan.
The length of your refinance loan determines both the monthly payments and the total costs. Since the 20 year refinance loan has a shorter repayment term, each monthly payment is higher than with the 30 year loan, but the total costs are lower over time.
15-year mortgage refinancing rate
The 15-year average mortgage refinance rate today is 2.473%, up 0.031% from yesterday’s average of 2.442%. A refinancing loan at the current average rate would carry a monthly principal and interest payment of $ 662 for every $ 100,000 borrowed. You would have a total interest cost of $ 19,793 per $ 100,000 of mortgage debt refinanced over the term of the loan.
This loan has the shortest repayment term and therefore the lowest total costs. However, when you choose a loan with such a short repayment period, your monthly payments can be very high. Consider whether committing to such high payments is a good long-term financial decision.
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 fees 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 per 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 their all-time low, 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.