Here’s what refinance rates look like today. Should you take out a new mortgage?
Some mortgage refinancing rates have increased since yesterday. While the refinance rates tend to be a bit higher than the rates you’ll see for a new mortgage purchase, they are still very competitive, despite having increased over the past few weeks. Here’s what today’s rates look like:
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30-year mortgage refinancing rate
The 30-year average refinancing rate today stands at 3.263%, up 0.007% from yesterday. At today’s rate, you’ll pay principal and interest of $ 435.98 for every $ 100,000 you borrow. This does not include additional expenses like property taxes and home insurance premiums.
20-year mortgage refinancing rate
The 20-year average refinancing rate today is 2.972%, down 0.004% from yesterday. At today’s rate, you’ll pay principal and interest of $ 553.40 for every $ 100,000 you borrow. Although your monthly payment increases by $ 117.42 with a loan of $ 100,000 over 20 years versus a loan of the same amount over 30 years, you will save $ 24,134.75 in interest over your repayment period for every 100 $ 000 that you borrow.
15-year mortgage refinancing rate
The 15-year average refinancing rate today stands at 2.590%, up 0.005% from yesterday. At today’s rate, you’ll pay principal and interest of $ 671.13 for every $ 100,000 you borrow. Compared to the 30-year loan, your monthly payment will be $ 235.15 higher for every $ 100,000 of mortgage principal. However, your interest savings will amount to $ 36,146.74 over the duration of your repayment period per $ 100,000 of mortgage debt.
Should You Refinance Your Mortgage Now?
Refinancing your mortgage can be a smart financial move if you are able to lower your interest rate and monthly payments with a new home loan. However, there are a few important things to consider before refinancing.
First, if you extend your loan repayment term, you could end up paying a higher total amount of interest over time than with your current mortgage. This can happen even if you qualify for a lower interest rate since you would be paying interest over a longer period. You can avoid this by choosing a refinance loan with a shorter repayment term. Or you may decide that you are willing to pay more interest over the life of your loan in exchange for a lower monthly payment.
Second, you’ll need to factor in closing costs, which are the upfront fees you will be charged when you refinance a mortgage. Ascent’s research found that the closing costs for a refinance loan for a mid-value home are between $ 5,000 and $ 12,500. However, your closing costs will depend on your specific mortgage amount, location, and lender.
You might need to offset these closing costs because of your lower monthly payments, but it can take time. If you save $ 200 per month by refinancing and pay $ 6,000 in closing costs, it will take you 2.5 years to break even. It is important to calculate the numbers and determine if you will be staying in your home long enough for the refinancing to pay off.
Generally speaking, refinancing can make a lot of sense if you don’t plan to move in the next few years and are able to reduce your mortgage interest rate by at least 1% ( or almost). Now one thing to note is that refinance rates have risen a lot since mid-February, and we don’t know if they will continue to rise, so if you are considering getting a new mortgage you might want to be act quickly. You are more likely to get a competitive rate on your refinance if you have a good credit rating and a low debt-to-income ratio.
If you’re ready to get a new mortgage, collect offers from different mortgage refinance lenders and see which offers you qualify for. You may find that one lender offers a more competitive interest rate while another offers lower closing costs. Take a close look at all the details in order to make the right choice.