Current Mortgage Refinance Rates -- July 6, 2021: Rates Down for Most Loans

Is now a good time to refinance? Check out today's average rates to find out.

If you can save on your current interest rate by refinancing, then securing a new home loan may be right for you. It's smart to keep tabs on average mortgage refinance rates to compare them to your current home loan.

Here are the average mortgage refinance rates for Tuesday, July 6:

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 3.270%, down 0.008% from yesterday's average of 3.278%. A mortgage refinance loan at today's average interest rate would cost you $436 per $100,000 borrowed. During your entire loan repayment period, you'd pay total interest costs of $57,070 per $100,000 refinanced.

20-year mortgage refinance rates

The average 20-year mortgage refinance loan rate today is 3.029%, up 0.003% from yesterday's average of 3.026%. If you refinance at today's average rate, you'd have a monthly principal and interest payment of $556 per $100,000 borrowed. You'd be looking at total interest costs of $33,452 per $100,000 in refinanced mortgage debt over the life of the loan.

This loan is a good option if you want to keep your payoff timeline short and save on total interest costs. You will pay less over time than with the 30-year loan and be debt free a decade sooner. But you do have to make higher monthly payments.

15-year mortgage refinance rates

The average 15-year mortgage refinance loan rate today is 2.576%, down 0.006% from yesterday's average of 2.582%. You'd be looking at a principal and interest payment of $670 per $100,000 refinanced at today's average rate. The total costs of interest would add up to $20,667 per $100,000 refinanced at today's average rate.

You will have much higher monthly payments with this loan than with the 20-year or 30-year refinance loan, but your interest saved over time will be considerable. You'll also pay off your new mortgage loan much faster.

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.