Current Mortgage Rates -- January 22, 2021: Rates Mixed and Still Competitive

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:

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

30-year mortgage rates

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.

20-year mortgage rates

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.

15-year mortgage rates

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.

5/1 ARMs

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.

Should I lock in my mortgage rate now?

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:

• 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

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.