Current Mortgage Refinance Rates -- May 17, 2021: Rates Up a Bit

Thinking about refinancing your home loan? Here's how average mortgage refinance rates are trending today.

Average mortgage refinance rates are up for all loans today. Refinancing a home loan can be a smart financial move for some homeowners. It depends if you'll be in the home long enough to cover closing costs as well as the interest rate you can qualify for and the amount you can save by reducing your rate.

Here's what average mortgage refinance rates look like for May 17, 2021:

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 3.259%, up 0.02% from Friday's average of 3.239%. If you refinance at today's average rate, your monthly principal and interest payment would be $436 per $100,000 borrowed. During your entire loan repayment period, you'd pay total interest costs of $56,852 per $100,000 refinanced.

20-year mortgage refinance rates

The average 20-year mortgage refinance loan rate today is 3.075%, up 0.009% from Friday's average of 3.066%. If you refinance at today's average rate, you'd have a monthly principal and interest payment of $558 per $100,000 borrowed. For each $100,000 you refinance at today's average rate, total interest costs would add up to $34,006.

It's important to consider your loan payoff time carefully when you refinance. If you pick a longer repayment time than your current loan, you may not save as much -- or may even end up paying more, even if you reduce your interest rate. That happens if you pay interest for more time. If you want to keep total interest as low as possible, a 20-year loan would be a better bet than the 30-year since you'd cut off a decade of interest charges. Just be aware that each monthly payment would be higher.

15-year mortgage refinance rates

The average 15-year mortgage refinance loan rate today is 2.561%, up 0.013% from Friday's average of 2.548%. A mortgage refinance loan at today's average interest rate would cost you $670 per $100,000 borrowed. Over the life of the refinance loan, your total interest costs would add up to $20,540 per $100,000 borrowed.

The 15-year refinance loan gives you the most interest savings over time by cutting years off your repayment schedule. Of course, when you make so few payments, each one is considerably higher than on longer term loans.

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 still not too far off 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.