Current Mortgage Refinance Rates -- September 28, 2021: Rates Tick Up

Homeowners can see today's current mortgage rates to decide if refinancing makes sense.

On Sept. 28, 2021, average mortgage refinance rates are up for all loans. Refinancing can save homeowners money over time if they can reduce their interest rate compared with their current home loan. However, there are upfront closing costs to pay, so homeowners need to ensure they'll break even for this expense.

Check out today's average mortgage refinance rates to see if refinancing could make sense in your situation:

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 3.181%, up 0.02% from yesterday's average of 3.161%. If you refinance at today's average rate, your monthly principal and interest payment would be $431 per $100,000 borrowed. Over the life of the refinance loan, your total interest costs would add up to $55,314 per $100,000 borrowed.

20-year mortgage refinance rates

The average 20-year mortgage refinance loan rate today is 2.852%, up 0.019% from yesterday's average of 2.833%. For each $100,000 refinanced at today's average rate, your total monthly principal and interest payment would be $547. You'd be looking at total interest costs of $31,332 per $100,000 in refinanced mortgage debt over the life of the loan.

You will benefit from lower total repayment costs with this loan over time because you are not paying interest for as long. However, you do have higher monthly payments because of the shortened payoff time.

15-year mortgage refinance rates

The average 15-year mortgage refinance loan rate today is 2.421%, up 0.02% from yesterday's average of 2.401%. A mortgage refinance loan at today's average interest rate would cost you $663 per $100,000 borrowed. Your total interest costs over the life of the refinance loan would equal $19,354 per $100,000 borrowed.

This loan has the highest monthly payments because your loan term is the shortest. But you will save a lot of money over time due to the shortened payoff period. If you want to save as much as possible by refinancing and don't mind the higher monthly costs, this loan is an ideal refinance option.

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 be charged 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.