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Interest rates on home loans have seen little variation in recent weeks and today is no exception. Mortgage rates for Wednesday Oct. 28 remain near record lows, providing an opportunity to borrow for a home at a very affordable cost.
Here's what you need to know about today's mortgage rates.
| Mortgage Type | Today's Interest Rate |
|---|---|
| 30-year fixed mortgage | 2.893% |
| 20-year fixed mortgage | 2.764% |
| 15-year fixed mortgage | 2.402% |
| 5/1 ARM | 3.462% |
30-year mortgage rates
The average 30-year mortgage rate today is 2.893%, down .001% from yesterday's average rate of 2.894%. If you borrow at today's average rate, you would pay $416 per $100,000 borrowed. This is for principal and interest only and does not include property taxes and insurance. Total interest costs over the life of the loan would add up to $49,708 per $100,000 borrowed.
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 2.764%, up .018% from yesterday's average rate of 2.746%. When borrowing at today's average rate, monthly principal and interest costs total $543 per month for each $100,000 borrowed and total interest costs are $30,286 per $100,000 in debt over the life of the loan.
Your monthly payment on a 20-year loan is higher than on a 30-year loan, even though your interest rate is a bit lower. That's because you are making payments for 10 fewer years so they necessarily must be higher in order to pay off your loan on time. This accelerated repayment schedule is why your total interest costs are so much lower over the life of your loan.
15-year mortgage rates
The average 15-year mortgage rate today is 2.402%, unchanged from yesterday's average rate of 2.402%. You would have a monthly payment of $662 in principal and interest per $100,000 borrowed if you secure a loan at today's average rate. Your total interest costs would add up to $19,193 per $100,000 in debt over the life of the loan.
Again, monthly payments are higher for a 15-year loan despite the fact you're borrowing at a much lower interest rate. When you take another five years off your repayment time, you save even more on total interest costs but you face higher monthly payments in exchange for the short payoff time.
5/1 ARMs
The average 5/1 ARM rate is 3.462%, up .012% from yesterday's average rate of 3.450%. Because ARM stands for adjustable-rate mortgage, you are only guaranteed this rate for the first five years, after which time rates can adjust once a year.
Since rates are near record lows right now, the chances of your rate adjusting lower after five years are very small. Since the average interest rate on a 30-year fixed-rate loan is lower than the starting rate on an ARM, borrowers are better off with a fixed-rate loan. This provides savings up front, as well as a predictable monthly payment throughout the life of the loan.
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, though 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, and 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
Before locking in, you should get rate quotes from at least three of the best mortgage lenders to ensure you're getting a loan at the most competitive possible rate.
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.
