Current Mortgage Rates -- January 15, 2021: Rates Up Again

On Jan. 15, mortgage rates went up on fixed-rate loans. If you're considering purchasing a home, here's what you need to know about rates today.

As the middle of January arrives, mortgage rates have been steadily rising in recent days but still remain very low. If you're thinking about taking out a loan to buy a home, here's what you need to know about average interest rates today.

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

30-year mortgage rates

The average 30-year mortgage rate today is 2.857%, up 0.001% from yesterday's average of 2.856%. You'd be looking at a principal and interest payment of $414 per $100,000 borrowed at today's average rate. Total interest costs would add up to $49,015 per $100,000 borrowed over the life of the loan.

20-year mortgage rates

The average 20-year mortgage rate today is 2.651%, up .021% from yesterday's average of 2.630%. A mortgage loan at today's average interest rate would cost you $537 per $100,000 borrowed. For each $100,000 you borrow at today's average rate, total interest costs would add up to $28,950.

When you opt for a 20-year loan over a 30-year one, you trade higher monthly payments for lower total interest costs. Paying off your loan a decade sooner means you pay interest for far less time, but each month's payment must be higher.

15-year mortgage rates

The average 15-year mortgage rate today is 2.267%, up 0.001% from yesterday's average of 2.266%. For each $100,000 borrowed at today's average rate, your monthly principal and interest payment would add up to $656. Your total interest costs over the life of the loan would equal $18,058 per $100,000 borrowed.

A 15-year loan, like a 20-year loan, means paying much higher monthly payments than you would on a 30-year loan. But since your loan is repaid in half the time, the interest savings is even greater. You'll need to think carefully about whether you want to commit so much money to a monthly payment in order to save on interest over time.

5/1 ARMs

The average 5/1 ARM rate is 3.269%, down 0.086% from yesterday's average of 3.355%. ARM stands for adjustable-rate mortgage, and in the case of a 5/1 ARM, rates will begin adjusting after five years. Since rates are pretty close to record lows right now, the most likely outcome is that they'd go up once they begin adjusting -- and your loan payments would go up with them.

You should likely opt for a 30-year fixed-rate loan instead, since the starting interest rate on 30-year loans is below the initial rate on an ARM and you won't have to worry about it changing over time.

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, 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

To find out what rates are available to you, compare rates from at least three of the best mortgage lenders before locking in.