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Today's Mortgage Refinance Rates -- July 21, 2021: Rates Fall Again

The Motley Fool logo The Motley Fool 7/21/2021 Maurie Backman
a sign in front of a house: Today's Mortgage Refinance Rates -- July 21, 2021: Rates Fall Again © Provided by The Motley Fool Today's Mortgage Refinance Rates -- July 21, 2021: Rates Fall Again

Mortgage refinance rates are lower today across the board. Refinance rates tend to be a bit higher than the rates you'll see for a new purchase mortgage, but right now they're quite competitive, historically speaking. Here's what they look like on Wednesday, July 21:

Mortgage Refinance Type Today's Interest Rate
30-year fixed refinance 3.115%
20-year fixed refinance 2.879%
15-year fixed refinance 2.432%

Data source: The Ascent's national mortgage interest rate tracking.

30-year mortgage refinance rates

The average 30-year refinance rate today is 3.115%, down 0.053% from yesterday. At today's rate, you'll pay principal and interest of $428.00 for every $100,000 you borrow. That doesn't include added expenses like property taxes and homeowners insurance premiums.

20-year mortgage refinance rates

The average 20-year refinance rate today is 2.879%, down 0.049% from yesterday. At today's rate, you'll pay principal and interest of $549.00 for every $100,000 you borrow. Though your monthly payment will go up by $121.00 with a 20-year, $100,000 loan versus a 30-year loan of the same amount, you'll save $22,452.00 in interest over the course of your repayment period for every $100,000 you borrow.

15-year mortgage refinance rates

The average 15-year refinance rate today is 2.432%, down 0.050% from yesterday. At today's rate, you'll pay principal and interest of $664.00 for every $100,000 you borrow. Compared to the 30-year loan, your monthly payment will be $236.00 higher per $100,000 in mortgage principal. Your interest savings, however, will amount to $34,637.00 over the life of your repayment period per $100,000 of mortgage debt.

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 with a new home loan. However, there are a few important things to think about before you refinance.

First, if you extend your loan repayment term, you could end up paying a higher amount of total interest 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 period. You can avoid this 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'll need 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 specific amount of your mortgage, your location, and your lender.

You should eventually make up for these closing costs with your lower monthly payments -- but that can take time. If you save $200 per month by refinancing and pay $6,000 in closing costs, it would take 2.5 years to break even. It's important to run the numbers and consider whether you'll stay in your home long enough for refinancing to pay off.

Generally speaking, refinancing can make a lot of sense if you don't intend to move within the next few years and you're able to reduce the interest rate on your home loan by at least 1% (or somewhere close). And the higher a credit score you have when you apply to refinance, the greater your chances of lowering your interest rate substantially.

If you're ready to get a new mortgage, reach out to different refinance lenders and see what rates they offer you. Shopping around is important even when rates are low in general, especially when you consider that closing costs can vary from one lender to another. There's no need to get stuck paying higher fees than necessary when a little bit of research could prevent that.

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Video: Mortgage rates likely to remain low from a historical perspective: Analyst (Yahoo! Finance)

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A historic opportunity to potentially save thousands on your mortgage

Chances are, interest rates won't stay put at multi-decade lows for much longer. That's why taking action today is crucial, whether you're wanting to refinance and cut your mortgage payment or you're ready to pull the trigger on a new home purchase. 

Our expert recommends this company to find a low rate - and in fact he used them himself to refi (twice!). Click here to learn more and see your rate.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.
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