Current Mortgage Rates for August 17, 2020

Thinking about becoming a homeowner or refinancing your mortgage? Here are the average mortgage rates for Aug. 17, 2020.

Homebuyers need to shop for an affordable home loan, comparing rates from several lenders. The good news for well-qualified buyers is that mortgage rates have repeatedly hit record lows in recent weeks.

While they have ticked up slightly for some loans in recent days, they still remain very affordable and many would-be buyers will find that locking in a loan is a smart choice. Here are today's average mortgage rates for Aug. 17 so you can decide if securing a home loan now is a good choice for you.

Data source: The Ascent's national mortgage interest rate tracking.

30-year mortgage rates

A 30-year fixed-rate mortgage gives you a rate and monthly payment guaranteed for the entire life of your loan. With today's 30-year loans averaging 3.054%, this is an extremely affordable rate to lock in. Not including taxes and insurance, monthly payments on a $200,000 home loan would be just $849 and the total cost of the mortgage would come in at $305,656. Many buyers who prefer low payments and the predictability a fixed-rate mortgage provides will benefit from rates that are considerably lower than they were just a year ago.

20-year mortgage rates

A 20-year mortgage comes with an interest rate that's even more affordable than a 30-year one, with the average rate for Aug. 17 coming in at just 3.041%. However, while rates are a bit lower, monthly payment costs are about $264 higher than for a 30-year loan with the cost coming in at $1,113. These higher monthly payments may be worth making as you'll be mortgage-free 10 years sooner and incur total loan costs of just $267,193. Paying such a low interest rate makes your interest very affordable, so locking in now could be a smart financial move.

15-year mortgage rates

Borrowers who want the lowest possible loan cost should opt for a 15-year loan, as this loan means you pay interest for half the time of a 30-year loan. With extremely low average rates of just 2.612% on Aug. 17, borrowers who lock in at this rate could see monthly payments of $1,344 and total loan costs of just $241,947. Although your monthly payment is much higher due to the short timeline for repayment, you will save $63,709 on the life of your loan compared with a 30-year fixed-rate mortgage.

5/1 ARMs

An adjustable-rate mortgage has a rate that can fluctuate after a period of time -- in this case, five years (which is what the 5 stands for in 5/1). Rates will adjust annually after your introductory five-year period. That means the starting interest rate, which averages 3.270% as of Aug. 17, could change after just half a decade. ARMs can make sense if you qualify for a low starting rate, or if you believe interest rates will fall. But with 30-year fixed-rate loans averaging lower than those for 5/1 ARMs and with current rates near record lows, an ARM likely wouldn't be the best choice for buyers right now.

Should I lock in a mortgage right now?

A mortgage rate lock guarantees you a specific rate for a preset period of time -- usually 30 days, but you may be able to lock in your rate for up to 60 days. You'll generally pay a fee for a mortgage rate lock, but in exchange, you're protected in the event that there's a substantial jump in rates between now and your loan closing date.

If you plan to close on your home within the next month, then it could pay to lock in your rate based on how today's numbers look, and also based on recent rate fluctuations. Today's rates are actually quite competitive across the board, so no matter what loan term you're interested in, you have a chance to lock in a good deal.

However, if your closing is more than a month away, you may want to choose a floating rate lock instead for what will generally be a higher fee, but a potentially worthwhile one. A floating rate lock allows you to snag a lower rate on your mortgage if rates fall prior to your closing, and given the way rates have moved in recent weeks, there's a chance they could go lower in time.

• 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 you decide to lock in, you should comparison shop among several different mortgage lenders to make sure you're getting the best interest rate and loan terms possible. Lenders all have their own requirements with regards to credit score, income, and other qualifying factors, so it pays to see who offers the best price given your financial credentials.