Today's Mortgage Refinance Rates -- July 29, 2021: Rates Fall for All Loans

How are mortgage refinance rates trending on July 29?

On July 29, 2021, mortgage refinance rates are down for all loans. You should get individual quotes from several mortgage lenders to find out what rate you would pay to refinance as your financial credentials can impact your rate. However, keeping tabs on how rates are trending can help you determine if refinancing is likely to save you money.

Here's what happened with average mortgage refinance rates 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 3.063%, down 0.004% from yesterday's average of 3.067%. If you refinance at today's average rate, your monthly principal and interest payment would be $425 per $100,000 borrowed. Total interest costs would add up to $53,003 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 2.820%, down 0.002% from yesterday's average of 2.822%. If you refinance at today's average rate, you'd have a monthly principal and interest payment of $546 per $100,000 borrowed. Over the life of the refinance loan, you'd pay total interest costs of $30,951 per $100,000 borrowed.

This loan is cheaper over time than the 30-year refinance loan. But as you can see, each monthly payment is higher. When you reduce your payment time, your monthly payment must go up -- but your costs over time go down since you don't pay interest for as long.

15-year mortgage refinance rates

The average 15-year mortgage refinance loan rate today is 2.348%, down 0.004% from yesterday's average of 2.352%. A mortgage refinance loan at today's average interest rate would cost you $655 per $100,000 borrowed. You'd be looking at total interest costs of $17,898 per $100,000 in refinanced mortgage debt over the life of the loan.

With its short payoff time and low rate, the 15-year refinance loan is very affordable over time. However, the interest savings comes at the price of much higher monthly payments during the life of the loan. Think about the opportunity cost of this and whether you want to put the extra strain on your budget.

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 can be 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.