Today's Mortgage Refinance Rates -- October 1, 2021: All Rates Are Still Up

Homeowners should keep tabs on average mortgage refinance rates to look for opportunities to save. Here are today's rates.

On Oct. 1, 2021, average mortgage refinance rates are higher for all loans. Homeowners can keep tabs on how average mortgage refinance rates compare to the rates on their current home loan so they can look for opportunities to save.

Here are today's average rates for the first day of October:

Data source: The Ascent's national mortgage interest rate tracking.

30-year mortgage refinance rates

The average 30-year mortgage refinance loan rate today is 3.257%, up 0.021% from yesterday's average of 3.236%. A mortgage refinance loan at today's average interest rate would cost you $429 per $100,000 borrowed. Total interest costs would add up to $56,813 per $100,000 borrowed over the life of the refinance loan.

20-year mortgage refinance rates

The average 20-year mortgage refinance loan rate today is 2.958%, up 0.022% from yesterday's average of 2.936%. If you refinance at today's average rate, you'd have a monthly principal and interest payment of $553 per $100,000 borrowed. Over the life of the refinance loan, your total interest costs would add up to $32,599 per $100,000 borrowed.

The interest rate is lower on the 20-year loan, but the monthly payments are still much higher. That's because you make payments for a decade less, so each payment you do make must be higher. The lower rate combined with the shorter payoff time make this loan much cheaper over time.

15-year mortgage refinance rates

The average 15-year mortgage refinance loan rate today is 2.500%, up 0.027% from yesterday's average of 2.473%. You'd be looking at a principal and interest payment of $667 per $100,000 refinanced at today's average rate. Over the life of the refinance loan, you'd pay total interest costs of $20,022 per $100,000 borrowed.

The payment timeline on this loan is very short, which explains both the high monthly payments and low total loan costs. Make sure the loan payments will be easily affordable for you before you decide to choose this refinance loan option.

Should you refinance your mortgage right now?

Refinancing your mortgage can be a smart financial decision if you're able to reduce your interest rate and lower your monthly payments by securing a new home loan. However, there are a few key things to think about before you refinance.

First, if you extend your loan repayment term, you could end up paying higher total interest costs over time than with your existing mortgage. This can occur even if you qualify for a lower interest rate since you'd be paying interest over a longer time. You can avoid this issue by choosing a refinance loan with a shorter repayment term. Or you may decide you're willing to pay more interest over the life of your loan in exchange for a reduced monthly payment.

Second, you will have to consider closing costs, which are the upfront costs you'll be charged when you refinance a mortgage. The Ascent's research revealed that closing costs on a refinance loan for a median value home total anywhere from $5,000 to $12,500. However, your closing fees will depend on the amount of your home loan, your location, and your lender.

You should eventually make up for these closing costs due to your lower monthly payments -- but that can take time. If you save $200 per month by refinancing and pay $6,000 in closing costs, you would take 2.5 years to break even. It's important to do the math and consider whether you'll stay in your home long enough for refinancing to pay off.

In general, it is a good idea to refinance if you don't plan to move in the next few years and you can reduce your mortgage interest rate by 1% or more. With mortgage refinance rates near record lows, many borrowers will find it's a good time to refinance. Compare rates from the best mortgage refinance lenders to get some personalized offers and decide whether securing a new home loan now is right for you.