Current Mortgage Refinance Rates -- August 24, 2021: Rates Up for Most Loans

by Christy Bieber | Published on Aug. 24, 2021

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Large, modern-style home with Today's Mortgage Refinance Rates graphic.

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Is refinancing your home loan right for you?

Average mortgage refinance rates are up for two popular refinance loans today. Refinancing can be a wise financial move for homeowners who are able to reduce the interest they are paying on their mortgage. However, there are upfront closing costs, so homeowners need to know how much they will save by refinancing and make sure they cover those costs before they need to move.

Here are today's average mortgage refinance rates for Aug. 24, 2021 so you can see how much you could drop your rate:

Mortgage Type Today's Interest Rate
30-year fixed refinance loan 3.106%
20-year fixed refinance loan 2.821%
15-year fixed refinance loan 2.379%

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 3.106%, up 0.007% from yesterday's average of 3.099%. A loan at today's average rate would cost you $427 per month in principal and interest for each $100,000 you refinance. Total interest costs would add up to $53,843 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 2.821%, down 0.012% from yesterday's average of 2.833%. At today's average rate, the monthly principal and interest payment would add up to $546 per $100,000 in refinanced mortgage debt. Over the life of the refinance loan, your total interest costs would add up to $30,963 per $100,000 borrowed.

Refinancing can mean resetting the clock on your mortgage payoff timeline. If you end up paying interest for a lot longer, you may not save much or could even make your loan more expensive despite dropping your interest rate. Choosing a 20-year loan over a 30-year refinance loan cuts a decade off your payment time, and results in a much cheaper loan over time although each monthly payment is higher.

15-year mortgage refinance rates

The average 15-year mortgage refinance loan rate today is 2.379%, up 0.012% from yesterday's average of 2.367%. If you refinance at today's average rate, you'd have a monthly principal and interest payment of $661 per $100,000 borrowed. For each $100,000 you refinance at today's average rate, total interest costs would add up to $18,999.

This loan has the shortest payoff time, so it comes with the highest monthly payment. But since it is such a short timeline, you can save a lot of money over time and become debt free ASAP.

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 be charged 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.

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