Today's Mortgage Refinance Rates -- October 5, 2021: Rates Fall for All Loans

by Christy Bieber | Published on Oct. 5, 2021

Many or all of the products here are from our partners that pay us a commission. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.
Large, modern-style home with Today's Mortgage Refinance Rates graphic.

Image source: Getty Images

Could you save money by refinancing? Check out average mortgage refinance rates to find out.

Does refinancing your home make financial sense? It depends if you can reduce the interest rate on your current loan and if you'll be in your home long enough to cover the upfront closing costs you pay when refinancing. Check out today's average mortgage refinance rates for Oct. 5, 2021 to see if refinancing could save you money compared with your current loan:

Mortgage Type Today's Interest Rate
30-year fixed refinance loan 3.253%
20-year fixed refinance loan 2.951%
15-year fixed refinance loan 2.486%

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 3.253%, down 0.004% from yesterday's average of 3.257%. At today's average rate, the monthly principal and interest payment would add up to $435 per $100,000 in refinanced mortgage debt. During your entire loan repayment period, you'd pay total interest costs of $56,734 per $100,000 refinanced.

20-year mortgage refinance rates

The average 20-year mortgage refinance loan rate today is 2.951%, down 0.014% from yesterday's average of 2.965%. For each $100,000 refinanced at today's average rate, your monthly principal and interest payment would add up to $553. The total costs of interest would add up to $32,683 per $100,000 refinanced at today's average rate.

Chances are you've been paying on your current loan for a while so you need to think carefully about the repayment timeline on your new loan. If you choose another 30-year loan, you'll probably add on to the time it takes to repay what you owe. The 20-year refinance loan could allow you to be debt free sooner and pay less interest over time, but it does necessitate higher monthly payments than the 30-year refinance loan would.

15-year mortgage refinance rates

The average 15-year mortgage refinance loan rate today is 2.486%, down 0.009% from yesterday's average of 2.495%. A loan at today's average rate would cost you $666 per month in principal and interest for each $100,000 you refinance. Your total interest costs over the life of the refinance loan would equal $19,903 per $100,000 borrowed.

This loan has a very short payoff time, so it maximizes the total amount of money you can save by refinancing. It does have high payments, despite the low interest rate, simply because you're paying off your loan so quickly. Be sure you're comfortable with the payments in your monthly 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 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.

About the Author