Today's Mortgage Refinance Rates -- July 1, 2021: Rates Fall for All Loans

Are mortgage refinance rates up or down on July 1? Find out here.

On the first day of July, mortgage refinance rates are down across the board. Homeowners should pay attention to how refinance rates are trending and compare them to their current interest rate to see if it's a good time to secure a new home loan.

Check out today's average mortgage refinance rates for Thursday, July 1, to see how rates moved today:

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 3.290%, down 0.015% from yesterday's average of 3.305%. If you refinance at today's average rate, you'd have a monthly principal and interest payment of $437 per $100,000 borrowed. Total interest costs would add up to $57,466 per $100,000 borrowed over the life of the refinance loan.

20-year mortgage refinance rates

The average 20-year mortgage refinance loan rate today is 3.038%, down 0.014% from yesterday's average of 3.052%. A refinance loan at today's average rate would come with a monthly principal and interest payment of $557 per $100,000 borrowed. If you refinance at today's average rate, you'd have a monthly principal and interest payment of $33,560 per $100,000 borrowed.

Choosing the right loan refinance term is important. A 20-year refinance loan will allow you to have your home loan paid off a decade sooner than a 30-year loan and you will save considerably on interest. You will, however, have to make much higher monthly payments.

15-year mortgage refinance rates

The average 15-year mortgage refinance loan rate today is 2.602%, down 0.023% from yesterday's average of 2.625%. For each $100,000 refinanced at today's average rate, your total monthly principal and interest payment would be $672. During your entire loan repayment period, you'd pay total interest costs of $20,888 per $100,000 refinanced.

If you opt for this refinance loan, you will make your payment time much shorter and your costs much lower than with the 30-year or 20-year refinance loan. Of course, you need to be prepared for much higher monthly payments.

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'll need to consider closing costs, which are the upfront fees you'll be charged when you refinance a 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.