Current mortgage refinancing rates – February 2, 2021: rates are mixed

Mortgage refinancing rates show mixed results on February 2, 2021, with average 30- and 20-year rates rising slightly and 15-year rates falling. It’s always a great time to refinance your mortgage, as rates remain near their all-time low and many borrowers could save a lot of money by getting a new home loan. Here’s what you need to know about average mortgage refinance rates today.

The data source: The Ascent National Mortgage Interest Rate Tracker.

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Secure access to The Ascent’s free guide that reveals how to get the lowest mortgage rate on your new home purchase or when refinancing. Rates are still at their lowest for decades, so act today to avoid missing out.

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30-year mortgage refinancing rate

The 30-year average mortgage refinance rate today is 2.888%, up 0.002% from yesterday’s average of 2.886%. At today’s average rate, you would pay $ 416 per month in principal and interest for every $ 100,000 borrowed to refinance your loan. Over the life of the refinance loan, your total interest charges would be $ 49,612 per $ 100,000 borrowed.

20-year mortgage refinancing rate

The 20-year average mortgage refinance rate today is 2.670%, up 0.001% from yesterday’s average of 2.669%. You would consider a principal and interest payment of $ 538 per $ 100,000 borrowed at today’s average rate. The total interest charge would amount to $ 29,174 per $ 100,000 borrowed over the life of the refinance loan.

A 20-year refinance loan offers a much lower total interest cost than a 30-year loan, but the trade-off is that you face higher monthly payments since you pay off your loan much faster.

15-year mortgage refinancing rate

The 15-year mortgage refinance average rate today is 2.360%, down 0.005% from yesterday’s average of 2.365%. A refinance loan at the current average interest rate would cost you $ 660 per $ 100,000 borrowed. The total interest charge on your refinance loan would be $ 18,839.

A 15 year refinance loan also comes with higher monthly payments than the 30 or 20 year alternatives, but even more interest savings. Remember, if you take the 15-year loan over the 30-year mortgage, you’ll pay off your debt in half the time.

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 by getting a new home loan. However, there are a few key things to consider before refinancing.

First, if you extend your loan repayment term, you could end up paying higher total interest charges 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 problem 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 will need to factor in the closing costs. There are upfront fees to pay when you refinance your 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 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 would take you 2.5 years to break even. It’s important to do the math and determine if you’ll be staying in your home long enough for the refinancing to pay off.

In general, it’s a good idea to refinance if you don’t plan to move in the next few years and can lower your mortgage interest rate by 1% or more. With mortgage refinancing rates nearing their all-time low, many borrowers will find it a good time to refinance. Compare the rates of the best mortgage refinance lenders for personalized offers and decide if getting a new mortgage is right for you now.

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