Current Mortgage Refinance Rates -- February 23, 2021: Rates Continue Upward Movement

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Although still near record lows, mortgage refinance rates went up again on Feb. 23, 2021. Here's what to know if you're a homeowner.

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Although still near record lows, mortgage refinance rates went up again on Feb. 23, 2021. Here's what to know if you're a homeowner.

Homeowners have been enjoying record low refinance rates in recent months. Over the past few weeks, however, rates have begun slowly inching upward. Today was no exception, as mortgage refinance rates rose slightly.

Today's rates are still very competitive though. Take a look at average mortgage refinance rates for Feb. 23, 2021 to see how they compare to your current loan so you can determine if refinancing is the right move for you.

Mortgage Type Today's Interest Rate
30-year fixed refinance loan 3.070%
20-year fixed refinance loan 2.832%
15-year fixed refinance loan 2.470%

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 3.070%, up 0.017% from yesterday's average of 3.053%. For each $100,000 refinanced at today's average rate, your monthly principal and interest payment would add up to $425. Property taxes and insurance aren't included, but are also often paid as part of your monthly mortgage payment. You'd be looking at total interest costs of $53,140 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 2.832%, up 0.005% from yesterday's average of 2.827%. If you refinance at today's average rate, you'd have a monthly principal and interest payment of $546 per $100,000 borrowed. You'd pay total interest of $31,094 over the life of the loan for each $100,000 in mortgage debt you refinance.

When you refinance, the length of your loan term and your interest rate determine both how your monthly payments change and how much money -- if any -- you'll save in interest over time. A 20-year loan has a shorter repayment timeline, so each payment must be larger than with the 30-year loan option. You may not save as much each month, but total interest costs over time are much lower, so choosing this refinance loan could considerably reduce the costs of paying back your mortgage.

15-year mortgage refinance rates

The average 15-year mortgage refinance loan rate today is 2.470%, up 0.018% from yesterday's average of 2.452%. You'd be looking at a principal and interest payment of $665 per $100,000 refinanced at today's average rate. The total costs of interest would add up to $19,768 per $100,000 borrowed at today's average rate.

Again, with a 15-year loan, the repayment time is considerably shorter than on either the 30-year or 20-year loan. This means you won't drop your monthly payment nearly as much by refinancing to this loan. In fact, it might go up, even if you drop your interest rate. However, since you'll become debt free so quickly, interest savings over time will be 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. There are upfront fees 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.

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