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Current Mortgage Rates -- Dec. 16: Most Rates Decline

By Christy Bieber - Dec 16, 2020 at 8:10AM

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Find out average mortgage rates as we move into the second half of December.

A set of house keys hangs on a key rack on the wall, with Today's Mortgage Rates graphic in lower left corner.

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Mortgage rates on Dec. 16 are down on the 30-year and 15-year fixed-rate loan as well as on the 5/1 ARM. Because rates remain near record lows, borrowers may wish to consider locking in. Take a look at today's average rates to help you decide.

Mortgage Type Today's Interest Rate
30-year fixed mortgage 2.779%
20-year fixed mortgage 2.603%
15-year fixed mortgage 2.258%
5/1 ARM 3.210%

DATA SOURCE: THE ASCENT'S NATIONAL MORTGAGE INTEREST RATE TRACKING.

30-year mortgage rates

The average 30-year mortgage rate today is 2.779%, down 0.003% from yesterday's average of 2.782%. Borrowing at today's average rate would leave you with a monthly principal and interest payment of $410 per $100,000 in mortgage debt. Over the life of the loan, your total interest costs would add up to $47,520 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 2.603%, up .004% from yesterday's average of 2.599%. A loan at today's average rate would come with a monthly principal and interest payment of $535 per $100,000 borrowed. Total interest costs would be $28,384 per $100,000 in mortgage debt over the life of the loan. 

You may be surprised that the monthly payment is so much higher for the 20-year loan than on the 30-year loan even though rates are slightly lower. Remember, though, that you'll be repaying your loan in a decade less time -- which is also why your total interest costs are lower. 

15-year mortgage rates

The average 15-year mortgage rate today is 2.258%, down .017% from yesterday's average of 2.275%. For each $100,000 borrowed at today's average rate, your monthly principal and interest payment would add up to $655. The total costs of interest would add up to $17,982 per $100,000 borrowed at today's average rate. 

Again, the monthly payments are higher than with the 20-year or 30-year despite the lower rate. This is also explained by the shortened repayment timeline. The bright spot is, total interest costs are even lower. 

5/1 ARMs

The average 5/1 ARM rate is 3.210%, down 0.112% from yesterday's average of 3.322%. An adjustable-rate mortgage means your rate is guaranteed only for a short time -- five years in this case. Since rates are so low right now, your rate and payment would likely go up after five years. Because the 30-year rate is lower than the 5/1 ARM rate right now, you'd probably be better off locking in at this lower fixed rate for 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 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.

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