Current Mortgage Refinance Rates -- August 31, 2021: Rates Down for Most Loans

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Refinancing your home loan? Here's how mortgage refinance rates are trending.

On Aug. 31, 2021, mortgage refinance rates are down for most loans. Check out average mortgage refinance rates for the 30-year, 20-year, and 15-year fixed-rate loans to get an idea of what you'd pay in interest if you refinanced your home loan today:

Mortgage Type Today's Interest Rate
30-year fixed refinance loan 3.115%
20-year fixed refinance loan 2.818%
15-year fixed refinance loan 2.390%

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 3.115%, up 0.009% from yesterday's average of 3.124%. For each $100,000 refinanced at today's average rate, your monthly principal and interest payment would add up to $428. Total interest costs would add up to $54,019 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 2.818%, down 0.012% from yesterday's average of 2.830%. For each $100,000 refinanced at today's average rate, your total monthly principal and interest payment would be $546. During your entire loan repayment period, you'd pay total interest costs of $30,927 per $100,000 refinanced.

As you can see, you must pay more each month with a 20-year refinance loan than with a 30-year refinance loan. But you do save a lot in interest over time by reducing the repayment timeline by a decade.

15-year mortgage refinance rates

The average 15-year mortgage refinance loan rate today is ​​2.390%, down 0.008% from yesterday's average of 2.398%. If you refinance at today's average rate, your monthly principal and interest payment would be $662 per $100,000 borrowed. You'd be looking at total interest costs of $30,927 per $100,000 in refinanced mortgage debt over the life of the loan.

This loan provides the lowest total refinancing costs compared with the 20-year and 30-year loan, because you have a low rate and won't pay interest for as long. But you do have to be prepared for much larger monthly payments because of the short payoff time.

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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