Current Mortgage Refinance Rates -- March 9, 2021: Rates Continue Upward Trend
What happened with mortgage refinance rates on March 9, 2021? Find out here.
On March 9, 2021, mortgage refinance rates rose slightly again. If you've been tracking rates, you'll see that average rates have inched up considerably from recent record lows. However, they remain very competitive, giving many homeowners the opportunity to save on their monthly payment by refinancing.
Check out today's average mortgage refinance rates to see how they compare to the rate on your current home loan.
|Mortgage Type||Today's Interest Rate|
|30-year fixed refinance loan||3.276%|
|20-year fixed refinance loan||2.959%|
|15-year fixed refinance loan||2.605%|
30-year mortgage refinance rates
The average 30-year mortgage refinance loan rate today is 3.276% up 0.013% from yesterday's average of 3.263%. A refinance loan at today's average rate would come with a monthly principal and interest payment of $437 per $100,000 borrowed. Over the life of the refinance loan, your total interest costs would add up to $57,188 per $100,000 borrowed.
20-year mortgage refinance rates
The average 20-year mortgage refinance loan rate today is 2.959%, up 0.019% from yesterday's average of 2.940%. For each $100,000 refinanced at today's average rate, your monthly principal and interest payment would add up to $553. During your entire loan repayment period, you'd pay total interest costs of $32,611 per $100,000 refinanced.
Refinancing to a 20-year loan would mean paying much less in total interest costs over time compared with refinancing to a 30-year loan. However, you would have to make higher monthly payments. That's because when you reduce your payoff time by 10 years, you pay interest for far less time, but each payment must be higher to pay off your loan on schedule.
15-year mortgage refinance rates
The average 15-year mortgage refinance loan rate today is 2.605%, up 0.009% from yesterday's average of 2.596%. A refinance loan at today's average interest rate would cost you $672 per $100,000 borrowed. The total costs of interest would add up to $20,914 per $100,000 refinanced at today's average rate.
Since a 15-year loan comes with a shorter payoff timeline than a 20-year loan, the interest savings is even more considerable but your monthly payments are even higher. Consider whether you can afford such high payments and whether the opportunity cost of making them is worth the interest savings.
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 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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