Current Mortgage Refinance Rates -- February 16, 2021: Rates Up Slightly

Thinking about refinancing? Mortgage refinance rates moved a bit higher on Feb. 16, but still remain near record lows.

On Feb. 16, 2021, mortgage refinance rates went up slightly. Refinance rates are still very low right now, as they have been for months. This is good news for homeowners who want to save money on their monthly payments.

If you're considering refinancing, here's what you need to know about average rates today:

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 2.935%, up 0.003% from yesterday's average of 2.932%. At today's average rate, you'd pay $418 per month in principal and interest per $100,000 refinanced. You'd also have property taxes and insurance to pay. Over the life of the loan, your total interest costs would add up to $50,518 per $100,000 refinanced.

20-year mortgage refinance rates

The average 20-year mortgage refinance loan rate today is 2.691%, up 0.002% from yesterday's average of 2.689%. Refinancing at today's average rate would leave you with a monthly principal and interest payment of $539 per $100,000 in mortgage debt. Over the life of the refinance loan, your total interest costs would add up to $29,422 per $100,000 borrowed.

When choosing the term of your refinance loan, you'll have to decide if you want to lower your monthly payment as much as possible or reduce your total interest costs as much as you can. As you can see, when you choose a shorter repayment timeline -- such as a 20-year versus a 30-year loan -- you'll end up with higher monthly payments but less total interest paid.

15-year mortgage refinance rates

The average 15-year mortgage refinance loan rate today is 2.365%, up 0.004% from yesterday's average of 2.361%. At today's average rate, the monthly principal and interest payment would add up to $660 per $100,000 in mortgage debt. During your entire loan repayment period, you'd pay total interest costs of $18,882 per $100,000 refinanced.

With an even shorter repayment timeline than the 20-year loan, the 15-year refinance loan will save you considerably on interest compared with loan options that have longer terms. Of course, monthly payments will be much higher.

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. There are upfront fees to 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.