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Average mortgage rates for Oct. 21 remain very competitive. With rates repeatedly hitting new lows in recent months, well-qualified borrowers can secure affordable fixed-rate home loans to keep monthly payments and interest costs extremely low for the life of the loan.
Here's what you need to know about today's average rates.
|
Mortgage Type |
Today's Interest Rate |
|---|---|
|
30-year fixed mortgage |
2.876% |
|
20-year fixed mortgage |
2.693% |
|
15-year fixed mortgage |
2.394% |
|
5/1 ARM |
3.215% |
Data source: The Ascent's national mortgage interest rate tracking.
30-year mortgage rates
The average 30-year mortgage rate today is 2.876%, down .001% compared with yesterday's average rate of 2.877%. At today's average rate, the monthly principal and interest payment would total $415 per $100,000 borrowed. For each $100,000 in debt you take on, you would pay $49,381 in interest for the life of the loan.
Check out The Ascent's mortgage calculator to see what your monthly payment might be and how much your loan will ultimately cost. Also learn how much money you'd save by snagging a lower interest rate, making a larger down payment, or choosing a shorter loan term.
20-year mortgage rates
The average 20-year mortgage rate today is 2.693%, down .016% compared with yesterday's average rate of 2.709%. For each $100,000 you borrowed at today's average rate, your monthly principal and interest payment would total $539. Over the life of the loan, you'd owe $29,445 in interest per $100,000 borrowed.
Despite having a lower interest rate than 30-year fixed-rate loans, 20-year mortgages come with higher payments. Since you'll be making payments for 10 fewer years, you have to pay more each month to repay your loan on time. But because you do pay interest for a decade less time, your total interest costs are much lower.
15-year mortgage rates
The average 15-year mortgage rate today is 2.394%, up .007% compared with yesterday's average rate of 2.387%. At today's average rate, your monthly principal and interest costs would total $676 per $100,000 borrowed and total interest costs would add up to $21,664 per $100,000 in mortgage debt.
A 15-year mortgage takes another five years off your repayment time compared with a 20-year loan. Of course, this again translates to higher monthly payments but much lower total interest costs. If you can afford to pay more each month and want to become debt-free ASAP while saving substantially on interest, a 15-year loan may be your best option.
5/1 ARMs
The average 5/1 ARM rate is 3.215%, down .005% compared with yesterday's average rate of 3.220%. ARM stands for adjustable-rate mortgage and the "5" in 5/1 ARM signifies that your initial starting rate is fixed for the first five years. After that, your rate can start to adjust annually.
Since interest rates are very low right now, there's a good chance your rate would end up adjusting upwards in five years. It makes little sense to take that chance now since you can lock in at a lower rate for the life of your loan using a 15-, 20-, or 30-year fixed-rate mortgage. ARMs are often chosen when they have a lower starting rate than their fixed-rate alternatives, but that's not the case right now so there's no reason to gamble on how rates will trend in the future.
Should I lock my mortgage rate now?
A mortgage rate lock guarantees you a certain interest rate for a specified period of time -- usually 30 days, but you may be able to secure your rate for up to 60 days. You'll generally pay a fee to lock in your mortgage rate, but that way, you're protected in case rates climb between now and when you actually close on your mortgage.
If you plan to close on your home within the next 30 days, then it pays to lock in your mortgage rate based on today's rates -- especially since they're so competitive. But if your closing is more than 30 days away, you may want to choose a floating rate lock instead for what will usually be a higher fee, but one that could save you money in the long run. A floating rate lock lets you secure a lower rate on your mortgage if rates fall prior to your closing. While today's rates are still quite low, we don't know if rates will go up or down over the next few months. As such, it pays to:
- LOCK if closing in 7 days
- LOCK if closing in 15 days
- LOCK if closing in 30 days
- FLOAT if closing in 45 days
- FLOAT if closing in 60 days
With mortgage rates so low right now, most qualified borrowers will be able to get a great deal on a home loan. But that doesn't mean you shouldn't shop around and compare rates and terms, which can vary from one lender to the next. Check out some of the best mortgage lenders and get quotes from at least three to make sure you're getting the most affordable mortgage for you.
Methodology
The Ascent team partners with market-leading data provider Optimal Blue to track the seven-day average of daily mortgage rates that actual borrowers are locking in nationwide. Learn more about our mortgage rates tracking methodology.
