Current Mortgage Refinance Rates -- April 8, 2021: Rates Tick Down

What happened with mortgage rates on April 8, 2021? Find out how rates are trending.

What happened with mortgage rates on Thursday? Find out how rates are trending.

On Thursday April 8, 2021, mortgage refinance rates dropped slightly. Tracking mortgage rates is important for homeowners considering refinancing. That's because it makes sense to get a new mortgage loan only if you can save compared with your current rate.

Check out today's average mortgage refinance rates to see if you could save:

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 3.417%, down 0.007% from yesterday's average of 3.424%. If you refinance at today's average rate, you'd have a monthly principal and interest payment of $444 per $100,000 borrowed. You'd be looking at total interest costs of $59,993 per $100,000 in refinanced mortgage debt over the life of the loan.

20-year mortgage refinance rates

The average 20-year mortgage refinance loan rate today is 3.138%, down 0.006% from yesterday's average of 3.144%. A refinance loan at today's average rate would come with a monthly principal and interest payment of $546 per $100,000 borrowed. Over the life of the refinance loan, total interest costs would be $34,767 per $100,000 in mortgage debt.

Think carefully about what loan repayment term makes sense when you refinance. A 30-year loan will provide the lowest monthly payment, but the 20-year loan comes with more total interest saved over time. Weigh the pros and cons of each to decide.

15-year mortgage refinance rates

The average 15-year mortgage refinance loan rate today is 2.690%, down 0.006% from yesterday's average of 2.696%. At today's average rate, the monthly principal and interest payment would add up to $676 per $100,000 in refinanced mortgage debt. Total interest costs would be $21,639 per $100,000 in mortgage debt over the life of the refinance loan.

A 15-year refinance loan comes with higher monthly payments than either the 20-year or 30-year. But you're debt free in half the time and, as you can see, the savings on interest is substantial.

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 fees you'll have to pay when you refinance your 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.