Todays' Mortgage Refinance Rates -- July 13, 2021: Rates Down for Most Loans

Are today's average mortgage refinance rates lower than the rate on your current home loan?

If you have a current home loan and can drop your interest rate by refinancing, it may be worth doing so. It depends if the savings from refinancing will cover upfront closing costs before you sell the home. It's helpful to look at current mortgage refinance rates to see if you could save on interest.

Check out average mortgage refinance rates for Tuesday, July 13, to see if getting a new loan is a good idea:

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 3.200%, up 0.002% from yesterday's average of 3.198%. For each $100,000 refinanced at today's average rate, your monthly principal and interest payment would add up to $432. Your total interest costs over the life of the refinance loan would equal $55,688 per $100,000 borrowed.

20-year mortgage refinance rates

The average 20-year mortgage refinance loan rate today is 2.934%, up 0.004% from yesterday's average of 2.930%. If you refinance at today's average rate, you'd have a monthly principal and interest payment of $551 per $100,000 borrowed. Over the life of the refinance loan, your total interest costs would add up to $32,312 per $100,000 borrowed.

This refinance loan will cost less over time than the 30-year refinance loan because you pay interest for a shorter amount of time so you don't pay as much total interest. Since you have fewer payments in which to repay your loan balance, each monthly payment must be higher with the 20-year loan than with the 30-year loan.

15-year mortgage refinance rates

The average 15-year mortgage refinance loan rate today is 2.524%, down 0.002% from yesterday's average of 2.526%. At today's average rate, the monthly principal and interest payment would add up to $668 per $100,000 in refinanced mortgage debt. The total costs of interest would add up to $20,226 per $100,000 refinanced at today's average rate.

A 15-year refinance loan saves more on interest than the 20-year or 30-year loan because of the shortened payoff time, but it also comes with higher monthly 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.