Current Mortgage Refinance Rates -- May 28, 2021: Rates Are Mixed

Did refinance rates go up or down today?

With the month of May drawing to a close, mortgage refinance rates are mixed on May 28, 2021. For homeowners who can reduce their current rate by refinancing, securing a new home loan to pay off your existing mortgage may be a smart choice.

Check out today's average rates to see how they compare to the interest you're paying now:

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 3.254%, down 0.004% from yesterday's average of 3.258%. For each $100,000 refinanced at today's average rate, your total monthly principal and interest payment would be $435. Over the life of the refinance loan, your total interest costs would add up to $56,753 per $100,000 borrowed.

20-year mortgage refinance rates

The average 20-year mortgage refinance loan rate today is 3.075%, up 0.004% from yesterday's average of 3.071%. If you refinance at today's average rate, you'd have a monthly principal and interest payment of $558 per $100,000 borrowed. Your total interest costs over the life of the refinance loan would equal $34,006 per $100,000 borrowed.

As you can see, the 20-year loan has higher monthly payments than the 30-year loan. When you cut off a decade of payments, each remaining payment must be larger. Since you pay interest for a decade less time, the total savings in interest over time is substantial.

15-year mortgage refinance rates

The average 15-year mortgage refinance loan rate today is 2.550%, down 0.005% from yesterday's average of 2.555%. You'd be looking at a principal and interest payment of $669 per $100,000 refinanced at today's average rate. Over the life of the refinance loan, total interest costs would be $20,446 per $100,000 in mortgage debt.

This loan option is the least expensive over time but has the highest payments each month. Decide if the tradeoff is worth it, or if you'd prefer to pay higher total costs but have more financial flexibility by not committing to such large mortgage payments.

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 pay 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.