Current Mortgage Refinance Rates -- May 4, 2021: Rates Remain Largely Stable

On May 4, 2021, mortgage refinance rates are largely stable with some down slightly. Find out how this could affect refinancing costs.

If you're considering refinancing your home, you'll want to pay attention to changes in average mortgage refinance rates. The rate you're offered will help you determine if it makes sense to refinance or keep your current home loan.

Here's how refinance rates trended on May 4, 2021.

Data source: The Ascent's national mortgage interest rate tracking.

30-year refinance rates

The average 30-year mortgage refinance loan rate today is 3.282, unchanged from yesterday's average. If you refinance at today's average rate, your monthly principal and interest payment would be $437 per $100,000 borrowed. Total interest costs would add up to $57,307 per $100,000 borrowed over the life of the refinance loan.

20-year refinance rates

The average 20-year mortgage refinance loan rate today is 3.088%, down 0.005% from yesterday's average of 3.093%. Refinancing at today's average rate would leave you with a monthly principal and interest payment of $559 per $100,000 in mortgage debt. During your entire loan repayment period, you'd pay total interest costs of $34,163 per $100,000 refinanced.

When you choose your repayment timeline, you'll need to consider both total costs and monthly payments, as there's an inverse relationship between them. As you can see, while the 20-year loan would be cheaper over time than the 30-year loan, you'd pay more each month.

15-year refinance rates

The average 15-year mortgage refinance loan rate today is 2.575%, down 0.004% from yesterday's average of 2.579%. You'd be looking at a principal and interest payment of $670 per $100,000 refinanced at today's average rate. Total interest costs would be $20,659 per $100,000 in mortgage debt over the life of the refinance loan.

Since this loan shortens your repayment timeline even further, you'd save more money than with the 20-year loan but would of course need to make much higher monthly payments. Consider your budget and the opportunity cost of committing to these payments before you choose a 15-year refinance loan.

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 up-front 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 with 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 1) you don't plan to move in the next few years and 2) 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.