Here’s what the current refinance rates look like. Are you ready to get a new mortgage?
Mortgage refinance rates have come down a bit overnight. While the refinance rates tend to be a bit higher than the rates you’ll see for a new purchase mortgage, they are still fairly competitive, even though they have climbed in the last couple of months. Here’s what the rates look like on April 7:
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30-year mortgage refinancing rate
The 30-year average refinancing rate today stands at 3.424%, down 0.011% from yesterday. At the current rate, you will pay principal and interest of $ 445.00 for every $ 100,000 borrowed. This does not include additional expenses like property taxes and home insurance premiums.
20-year mortgage refinancing rate
The 20-year average refinancing rate today stands at 3.144%, down 0.004% from yesterday. At the current rate, you will pay principal and interest of $ 562.00 for every $ 100,000 borrowed. Although your monthly payment increases by $ 117.00 with a 20 year loan and $ 100,000 compared to a 30 year loan of the same amount, you will save $ 25,212.00 in interest over your repayment period for every 100,000 $ borrowed.
15-year mortgage refinancing rate
The 15-year average refinancing rate today is 2.696%, down 0.003% from yesterday. At the current rate, you will pay principal and interest of $ 676.00 for every $ 100,000 borrowed. Compared to the 30-year loan, your monthly payment will be $ 231.00 higher for every $ 100,000 of mortgage principal. However, your interest savings will amount to $ 38,329.00 over the duration of your repayment period per $ 100,000 of mortgage debt.
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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 lower your monthly payments with a new home loan. However, there are a few important things to consider before refinancing.
First, if you extend the repayment term on your loan, you could end up paying a higher total interest amount over time than with your current mortgage. This can happen even if you qualify for a lower interest rate because you will 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 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 closing costs, which are the upfront costs that you will be charged when you refinance a mortgage. Ascent’s research found that the closing costs for a refinance loan for a mid-value home totaled between $ 5,000 and $ 12,500. However, your closing costs will depend on your specific mortgage amount, location, and lender.
You might have to offset those closing costs due to 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 2.5 years to break even. It’s important to run the numbers and determine if you’ll be staying in your home long enough for the refinancing to pay off.
Generally speaking, refinancing can make a lot of sense if you don’t plan to move in the next few years and are able to reduce your mortgage interest rate by at least 1% ( or at a nearby location). You may have noticed that refinance rates are higher than they were at the start of the year, but that doesn’t mean current rates aren’t competitive on their own. And while there’s a good chance they’ll stay low for the rest of the year, we can’t know for sure. As such, you may want to consider refinancing as soon as possible.
If you are interested in getting a new home loan, contact a few mortgage refinance lenders so you can compare the offers you receive. Examining the different options might help you come away with a better deal.