What's a Good Mortgage Refinance Rate Today?

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Mortgage refinance rates have reached historic lows during the ongoing COVID-19 crisis, which has many homeowners wondering if they should refinance their mortgages.  But what’s a good mortgage refinance rate today?  To break it down, let’s start by taking a look at the recent trends in U.S. mortgage rates over the last four months or so.

Source: Nerdwallet

The rates provided to NerdWallet by Zillow show a gradual decrease in the average annual percentage rate (APR) for new mortgages over late 2020 and into the start of 2021, although things are starting to balance out. As of Wednesday, January 13th, 2021, the average APR on a 30-year fixed-rate mortgage is 3.047%. If we consider a “good” rate to be average or better...

You should be looking for a mortgage rate of:

3.047% or lower*

*for a 30-year fixed-rate mortgage

So If I’m Offered 3%, I Should Go For It?

That depends! While a rate of 3.047% (or just below it) may be a “good” rate for a new mortgage, that doesn’t necessarily mean it’s worth pursuing a refinance for your current mortgage. The decision to refinance your home must also consider the long-term savings of the new rate vs. the additional closing costs of the new loan.

WEB Demystify the Mortgage Refinancing Process

A good rule of thumb is to look for a rate that’s about 1-2% lower than the rate of your current mortgage, to ensure that the savings will add up to more than the new round of closing costs.  The size of the loan, current equity, term length, and value of your home may also impact your decision, making it profitable to refinance at a rate that’s potentially less than 1% below than your current rate, or even requiring a rate that’s more than 2% lower before it makes sense to refinance.

Check out this mortgage refinance rate calculator to get a better sense of how your costs and savings could line up in your particular situation. Fox Business suggests that a good mortgage refinance rate today should be a bit lower than the 3.047% figure above. Their data shows that, as of January 13, 2021, the average rate for refinancing is more in the range of 2.750%.

You should be looking for mortgage refinance rate of:


*for a 30-year fixed-rate refinance

This lower average rate makes sense when you consider that homeowners are unlikely to refinance unless they’re saving enough money vs. their original mortgage. The best rate on 15 year mortgage refinance programs could be even lower still, although it may require larger monthly payments (since you might be paying the mortgage off more quickly).

Compare Quotes to Get the Best Mortgage Refinance Rate Today

Rates will differ from lender to lender. The only way to guarantee that you’re really getting a good mortgage refinance rate is to call around and compare quotes from multiple lenders. This takes a little bit of time up front, but it can save you a lot of money in the long run. 

However, keep in mind that the lowest rate may not always be the best rate. The other details of the refinance (length of term, fixed vs. adjustable, closing costs, etc.) can impact the net benefits of refinancing your mortgage.

Timing Matters, But So Does Location

While national mortgage refinance rates will generally trend up or down together, the location of the home you plan to refinance can impact the precise rates you’ll have available. As of January 13, 2021, the average mortgage refinance rate in Washington, DC is just barely lower than it is in Massachusetts, for example.

If you’re interested in refinancing your mortgage, contact Poli Mortgage to learn more about the average mortgage refinance rate today, right in your area, and whether or not mortgage refinancing now could actually help you save big in the long term.

BLOG Demystify the Mortgage Refinancing Process