Current Mortgage Refinance Rates -- February 18, 2021: Rates Inch Upward

Thinking about refinancing your mortgage? Here's how rates trended today.

If you're considering refinancing your home loan, it's important to keep tabs on mortgage refinance rates. These rates went up a bit today, but remain near record lows based on historical averages. Check out average mortgage refinance rates for Feb. 18, 2021 to learn more.

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 2.987%, up 0.032% from yesterday's average of 2.955%. If you refinance at today's average rate, your monthly principal and interest payment would be $421 per $100,000 borrowed. This doesn't include insurance or property taxes, which you'll likely also pay for as part of your mortgage payment. During your entire loan repayment period, you'd pay total interest costs of $51,525 per $100,000 borrowed.

20-year mortgage refinance rates

The average 20-year mortgage refinance loan rate today is 2.737%, up 0.032% from yesterday's average of 2.705%. A refinance loan at today's average interest rate would cost you $542 per $100,000 borrowed. Total interest costs would be $29,966 per $100,000 in refinance debt over the life of the loan.

When refinancing, you could drop your monthly payment the most by choosing a loan with a longer repayment timeline. However, opting for the 20-year loan over the 30-year loan would mean more total interest savings since you'd pay interest for less time. While the monthly payments are higher with this loan than with the 30-year option, you may decide that they're worth paying since you'll save so much in interest over time.

15-year mortgage refinance rates

The average 15-year mortgage refinance loan rate today is 2.404%, up 0.022% from yesterday's average of 2.382%. If you refinance to a 15-year loan at today's average rate, you'd have a monthly principal and interest payment of $662 per $100,000 borrowed. Over the life of the loan, you'd pay total interest costs of $19,210 per $100,000 borrowed.

The total interest savings is the greatest on this loan, but monthly payments are also higher. If you want to save the maximum amount you can over time and you can afford the higher monthly payments, the 15-year loan may be the best one for you.

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 need 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.