Mortgage Refinance Rate Today – February 26, 2021: Rates Keep Rising
Refinancing rates have been climbing higher all week. Should you take out a new mortgage?
Mortgage refinancing rates have jumped since yesterday. While refinance rates tend to be a bit higher than the rates you’ll see for a new mortgage purchase, they are still very competitive, despite a recent increase. Here’s what today’s rates look like:
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30-year mortgage refinancing rate
The 30-year average refinancing rate today stands at 3.187%, up 0.050% from yesterday. At today’s rate, you’ll pay principal and interest of $ 432.03 for every $ 100,000 you borrow. This does not include additional expenses like property taxes and home insurance premiums.
20-year mortgage refinancing rate
The 20-year average refinancing rate is 2.926% today, up 0.033% from yesterday. At today’s rate, you’ll pay principal and interest of $ 551.00 for every $ 100,000 you borrow. Although your monthly payment increases by $ 118.97 with a 20-year loan of $ 100,000 compared to a 30-year loan of the same amount, you will save $ 23,290.56 in interest over your repayment period for every $ 100,000 you borrow.
15-year mortgage refinancing rate
The 15-year average refinancing rate today stands at 2.541%, up 0.031% from yesterday. At today’s rate, you’ll pay principal and interest of $ 668.86 for every $ 100,000 you borrow. Compared to the 30-year loan, your monthly payment will be $ 236.83 higher for every $ 100,000 of mortgage principal. However, your interest savings will amount to $ 35,135.21 over the duration of your repayment period per $ 100,000 of mortgage debt.
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 monthly payments with a new home loan. However, there are a few important things to consider before refinancing.
First, if you extend your loan repayment term, you could end up paying a higher total amount of interest over time than with your current mortgage. This can happen even if you qualify for a lower interest rate since you would 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’ll need to factor in closing costs, which are the upfront fees 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 are between $ 5,000 and $ 12,500. However, your closing costs will depend on your specific mortgage amount, location, and lender.
You might need to offset these closing costs because of 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 will take you 2.5 years to break even. It is important to calculate the numbers and determine if you will 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 almost). And even though refinance rates rose during the latter part of February, they are still very competitive, historically speaking. If you have a good credit score – one in your mid-700s or higher – along with a low debt-to-income ratio and income that can easily support your loan amount, you’ll be even more likely to score a rate. attractive on your refinancing.
If you’re ready to give up your existing home loan and get a new one on better terms, contact a group of mortgage refinance lenders and see what deals they have. Be sure to look at the closing costs as well as the interest rates, as both will have a financial impact on you during the refinancing.