Today's Mortgage Refinance Rates -- September 9, 2021: Rates Up for All Loans

Is refinancing a smart financial move? Check out today's average mortgage rates to help you decide.

On Sept. 9, 2021, average mortgage refinance rates rose for all loans. If you are a homeowner and the interest rate on your current home loan is higher than the current rates, you may want to think about refinancing.

Check out today's average rates to see how they compare to what you're currently paying:

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 3.121%, up 0.003% from yesterday's average of 3.118%. For each $100,000 refinanced at today's average rate, your monthly principal and interest payment would add up to $428. Over the life of the refinance loan, total interest costs would be $54,137 per $100,000 in mortgage debt.

20-year mortgage refinance rates

The average 20-year mortgage refinance loan rate today is 2.832%, up 0.013% from yesterday's average of 2.819%. At today's average rate, the monthly principal and interest payment would add up to $546 per $100,000 in refinanced mortgage debt. Your total interest costs over the life of the refinance loan would equal $131,094 per $100,000 borrowed.

When refinancing, consider whether your priority is reducing monthly payments or reducing total payoff costs. If you choose a loan with a shorter repayment time, such as the 20-year versus the 30-year, your monthly payments will be higher since you aren't making as many payments. But by shortening the time you pay interest, you'll reduce total borrowing costs.

15-year mortgage refinance rates

The average 15-year mortgage refinance loan rate today is 2.381%, up 0.003% from yesterday's average of 2.378%. You'd be looking at a principal and interest payment of $661 per $100,000 refinanced at today's average rate. Total interest costs would add up to $19,016 per $100,000 borrowed over the life of the refinance loan.

This loan provides the most total savings over time because of its shortened payoff time, but the monthly payments are much higher. Be sure you can easily afford those payments before committing to a refinance loan with such a short payoff period.

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 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.