Today's Mortgage Refinance Rates -- May 18, 2021: Rates Up Again

Check out how much a 30-year, 20-year, or 15-year fixed-rate refinance loan might cost you today.

Check out how much a 30-year, 20-year, or 15-year fixed-rate refinance loan might cost you.

On May 18, 2021, mortgage refinance rates rose a bit compared with yesterday. If you own a home, refinancing your current mortgage loan could potentially save you money if you can drop your interest rate on your existing mortgage debt.

Check out today's average mortgage refinance rates to learn more:

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 3.273%, up 0.014% from yesterday's average of 3.259%. If you refinance at today's average rate, your monthly principal and interest payment would be $436 per $100,000 borrowed. Over the life of the refinance loan, your total interest costs would add up to $57,129 per $100,000 borrowed.

20-year mortgage refinance rates

The average 20-year mortgage refinance loan rate today is 3.083%, up 0.008% from yesterday's average of 3.075%. A refinance loan at today's average rate would come with a monthly principal and interest payment of $559 per $100,000 borrowed. During your entire loan repayment period, you'd pay total interest costs of $34,103 per $100,000 refinanced.

When refinancing, the loan term and interest rate both matter in terms of how your new loan affects your finances. The 20-year loan comes with more interest savings than the 30-year, but higher monthly payments. Both are due to the shortened payoff time.

15-year mortgage refinance rates

The average 15-year mortgage refinance loan rate today is 2.572%, up 0.011% from yesterday's average of 2.561%. For each $100,000 refinanced at today's average rate, your total monthly principal and interest payment would be $670. Total interest costs would be $20,633 per $100,000 in mortgage debt over the life of the refinance loan.

If your goal is to save the most money over time by refinancing, the 15-year loan could be the right choice due to its short payoff time and low total costs. The tradeoff, though, is that the monthly payments are much higher since you are making so few of them.

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 have 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.