by Maurie Backman | Jan. 22, 2021
The Ascent is reader-supported: we may earn a commission from offers on this page. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation.
Image source: Getty Images
Mortgage rates have fluctuated this week but remain competitive. Should you apply for a home loan now?
Mortgage rates are mixed today compared to yesterday, with some up and some down. This is what they look like now:
Mortgage Type | Today's Interest Rate |
---|---|
30-year fixed mortgage | 2.839% |
20-year fixed mortgage | 2.613% |
15-year fixed mortgage | 2.296% |
5/1 ARM | 2.960% |
Data source: The Ascent's national mortgage interest rate tracking.
The average 30-year mortgage rate today is 2.839%, up 0.001% from yesterday. At today's rate, you'll pay principal and interest of $413.24 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 2.613%, down 0.013% from yesterday. At today's rate, you'll pay principal and interest of $535.57 for every $100,000 you borrow. Though your monthly payment will go up by $122.33 with a 20-year, $100,000 loan versus a 30-year loan of the same amount, you'll save $20,227.42 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 2.296%, up 0.021% from yesterday. At today's rate, you'll pay principal and interest of $657.04 for every $100,000 you borrow. Compared to the 30-year loan, your monthly payment will be $243.80 higher per $100,000 in mortgage principal. Your interest savings, however, will amount to $30,497.30 over the life of your repayment period per $100,000 of mortgage debt.
The average 5/1 ARM rate is 2.960%, down 0.071% from yesterday. Though this is the lowest the 5/1 ARM has been in quite some time, it still pays to lock in a fixed loan instead. The reason? With a 5/1 ARM, your initial interest rate only stays in effect for five years, after which it can fluctuate, and while it could go down over time, it could also rise. If the 5/1 ARM continues to drop so that it falls below the 30-year rate, it may be worth considering at that point, but we're not there yet.
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, reach out to a few different lenders and see what rates they come back with. Lenders take different factors into consideration, like your credit score, income, and existing debt, when deciding what rate they can offer. If you come across as more of a credit risk, you'll get stuck with a lower rate, whereas if you come off as a more trustworthy borrower, you'll be more likely to snag the best offers available. But either way, know that lenders can make their own decisions, so getting multiple offers will increase your chances of walking away with the best deal you can qualify for.
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.
By submitting your email address, you consent to us sending you money tips along with products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Statement and Terms & Conditions.