by Maurie Backman | Feb. 9, 2021
Mortgage rates are up a bit today. Should you apply for a home loan?
Today's mortgage rates are mostly up from yesterday, but remain competitive. This is what they look like now:
|Mortgage Type||Today's Interest Rate|
|30-year fixed mortgage||2.831%|
|20-year fixed mortgage||2.585%|
|15-year fixed mortgage||2.234%|
The average 30-year mortgage rate today is 2.831%, up 0.005% from yesterday. At today's rate, you'll pay principal and interest of $412.60 for every $100,000 you borrow. That doesn't include added expenses like property taxes and homeowners insurance premiums.
The average 20-year mortgage rate today is 2.585%, down 0.027% from yesterday. At today's rate, you'll pay principal and interest of $533.81 for every $100,000 you borrow. Though your monthly payment will go up by $121.21 with a 20-year, $100,000 loan versus a 30-year loan of the same amount, you'll save $20,420.58 in interest over the course of your repayment period for every $100,000 you borrow.
This is one of the top lenders we've used personally to secure big savings. No commissions, no origination fee, low rates. Get a loan estimate instantly and $150 off closing costs.
The average 15-year mortgage rate today is 2.234%, up 0.020% from yesterday. At today's rate, you'll pay principal and interest of $654.25 for every $100,000 you borrow. Compared to the 30-year loan, your monthly payment will be $241.65 higher per $100,000 in mortgage principal. Your interest savings, however, will amount to $30,770.31 over the life of your repayment period per $100,000 of mortgage debt.
The average 5/1 ARM rate is 3.135%, down 0.083% from yesterday. A 5/1 ARM makes sense when it gives you a lower interest rate than what you'll get with a fixed loan. But right now, that's not the case, and so an adjustable-rate mortgage doesn't pay -- especially since you run the risk of your rate climbing over time. You're better off signing a 30-year fixed-rate mortgage at today's rates.
A mortgage rate lock guarantees you a specific interest rate for a certain 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 if rates climb between now and when you close on your home loan.
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 still very low. 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 loan if rates fall before you close on your mortgage, and while today's rates are extremely competitive, we don't know if rates will go up or down over the next few months. As such, it pays to:
If you're ready to apply for a mortgage, gather offers from a few different lenders to see what you qualify for. It could be that one lender offers a lower rate or less expensive closing costs than another. You can also use different offers to negotiate the best deal. For example, if one lender has a lower rate than others but slightly higher closing costs, you can ask that lender to reduce its fees to finalize your loan. Spending a week or so doing your research could help you land the best possible deal.
Chances are, interest rates won't stay put at multi-decade lows for much longer. That's why taking action today is crucial, whether you're wanting to refinance and cut your mortgage payment or you're ready to pull the trigger on a new home purchase.
Our expert recommends this company to find a low rate - and in fact he used them himself to refi (twice!). Click here to learn more and see your rate. While it doesn't influence our opinions of products, we do receive compensation from partners whose offers appear here. We're on your side, always. See our full advertiser disclosure here.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
Copyright © 2018 - 2021 The Ascent. All rights reserved.