Today's Mortgage Refinance Rates -- February 5, 2021: Rates Increase Slightly

by Christy Bieber | Updated July 19, 2021 - First published on Feb. 5, 2021

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On Feb. 5, mortgage refinances rate went up slightly. They're still competitive.

On Friday Feb. 5, 2021, mortgage refinance rates went up a bit. If you're considering refinancing your home loan, you still have an excellent opportunity to do so as rates are still very low in historical terms. Here's what you need to know about average refinance rates today.

Mortgage Type Today's Interest Rate
30-year fixed refinance loan 2.910%
20-year fixed refinance loan 2.710%
15-year fixed refinance loan 2.368%

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 2.910%, up 0.011% from yesterday's average of 2.899%. For each $100,000 refinanced at today's average rate, your monthly principal and interest payment would add up to $417. Your total interest costs over the life of the refinance loan would equal $50,036 per $100,000 refinanced.

20-year mortgage refinance rates

The average 20-year mortgage refinance loan rate today is 2.710%, up 0.009% from yesterday's average of 2.701%. A refinance loan at today's average rate would come with a monthly principal and interest payment of $540 per $100,000 borrowed. During your entire loan repayment period, you'd pay total interest costs of $29,646 per $100,000 borrowed.

The downside to refinancing to a 20-year loan versus a 30-year loan is that you have to make much higher monthly payments. But the upside is that your interest over time is much lower. This could enable you to save even more by refinancing, if you can afford the monthly cost.

15-year mortgage refinance rates

The average 15-year mortgage refinance loan rate today is 2.368%, up 0.005% from yesterday's average of 2.363%. At today's average rate, the monthly principal and interest payment on your refinance loan would add up to $661 per $100,000 in mortgage debt. You'd be looking at total interest costs of $18,907 per $100,000 in mortgage debt over the life of the refinance loan.

The 15-year loan option has the same pros and cons as the 20-year loan, but interest savings is even greater and monthly payments are even higher relative to the 30-year loan. If you can afford to refinance into the 15-year mortgage and want to maximize your interest savings, this may be your best 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. There are upfront 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 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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