Today's Mortgage Refinance Rates -- January 19, 2021: Rates Keep Inching Up, but Remain Competitive

Although average mortgage refinance rates climbed slightly for the 30-year and 15-year refinance loan, rates remain extremely competitive on Jan. 19.

In recent months, mortgage refinance rates have been extremely low. While they've been trending upwards slightly for several days, homeowners who wish to refinance can still secure very affordable loans. Here's what you need to know about average mortgage refinance rates for Jan. 19, 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 2.949%, up 0.007% from yesterday's average of 2.942%. At today's average rate, you'd pay $419 per month in principal and interest per $100,000 borrowed. This doesn't include any property taxes or insurance you'd continue to owe after refinancing your loan. Total interest costs would add up to $50,789 per $100,000 borrowed over the life of the loan.

20-year mortgage refinance rates

The average 20-year mortgage refinance loan rate today is 2.801%, down 0.002% from yesterday's average of 2.803% If you refinance at today's average rate, your monthly principal and interest payment would be $545 per $100,000 borrowed. Your total interest costs over the life of the loan would equal $30,725 per $100,000 borrowed.

Refinancing to a 20-year loan means you'll be accepting higher monthly payments than if you chose a 30-year fixed-rate loan. But since you'll pay off your loan 10 years sooner, your total interest costs are reduced significantly compared with the longer loan option.

15-year mortgage refinance rates

The average 15-year mortgage refinance loan rate today is 2.419%, up 0.004% from yesterday's average of 2.415%. Refinancing at today's average rate would leave you with a monthly principal and interest payment of $663 per $100,000 in mortgage debt. During your entire loan repayment period, you'd pay total interest costs of $19,337 per $100,000 borrowed.

With a 15-year loan, the tradeoff for even more interest savings is even higher monthly payments. Refinancing to a 15-year loan could potentially reduce your total loan costs substantially, but your monthly payments would be much higher than with a 20-year or 30-year loan 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.