Today's Mortgage Refinance Rates -- August 6, 2021: Rates Down for Most Loans

by Christy Bieber | Published on Aug. 6, 2021

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Large, modern-style home with Today's Mortgage Refinance Rates graphic.

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Refinance rates have been falling. Did the trend continue on Aug. 6, 2021?

Mortgage refinance rates are down for most loans today. This is in keeping with recent trends as rates have been declining. If you are thinking about refinancing your home loan, now may be a good time.

Check out average mortgage refinance rates for Friday, Aug. 6 to see how they compare to your current home loan:

Mortgage Type Today's Interest Rate
30-year fixed refinance loan 3.019%
20-year fixed refinance loan 2.754%
15-year fixed refinance loan 2.310%

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 3.019%, up 0.001% from yesterday's average of 3.018%. A refinance loan at today's average rate would come with a monthly principal and interest payment of $423 per $100,000 borrowed. Over the life of the refinance loan, total interest costs would be $52,127 per $100,000 in mortgage debt.

20-year mortgage refinance rates

The average 20-year mortgage refinance loan rate today is 2.754%, down 0.015% from yesterday's average of 2.769%. A mortgage refinance loan at today's average interest rate would cost you $542 per $100,000 borrowed. Over the life of the refinance loan, total interest costs would be $30,167 per $100,000 in mortgage debt.

If you choose the 20-year refinance loan, you'll end up paying higher monthly payments than with the 30-year loan because you aren't making payments for as long. Your total interest costs over time will be lower, though.

15-year mortgage refinance rates

The average 15-year mortgage refinance loan rate today is 2.310%, down 0.001% from yesterday's average of 2.311%. If you refinance at today's average rate, you'd have a monthly principal and interest payment of $658 per $100,000 borrowed. Over the life of the refinance loan, your total interest costs would add up to $18,419 per $100,000 borrowed.

Despite its low interest rate, this loan comes with the highest monthly payments. This is because half as many payments have to be made compared with the 30-year refinance loan. Total interest costs over time are the lowest with this 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, 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.

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