Current Mortgage Rates -- January 3, 2022: Rates Down for Most Loans

Average mortgage rates affect what you'll pay for a home loan. Here are average rates for Jan. 3, 2022.

On the first Monday in January, average mortgage rates are down for most loans, except the 30-year fixed-rate mortgage. It's important to pay attention to trends in the national average rate. These trends, along with your own personal financial credentials such as your credit score, will determine how costly a home loan is.

Check out today's average mortgage rates for Jan. 3, 2022:

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

30-year mortgage rates

The average 30-year mortgage rate today is 3.369%, up 0.002% from Friday's average of 3.367%. You'd be looking at a principal and interest payment of $442 per $100,000 borrowed at today's average rate. Your total interest costs over the life of the loan would equal $59,035 per $100,000 borrowed.

20-year mortgage rates

The average 20-year mortgage rate today is 3.101%, down 0.003% from Friday's average of 3.104%. At today's average rate, the monthly principal and interest payment would add up to $560 per $100,000 in mortgage debt. Over the life of the loan, you'd pay total interest costs of $34,320 per $100,000 borrowed.

The interest rate is lower on the 20-year mortgage than on the 30-year loan and you don't pay interest for as many years, so you save over time with this loan. However, the tradeoff is that each monthly payment must be higher because you don't make as many monthly payments before your loan must be fully paid off.

15-year mortgage rates

The average 15-year mortgage rate today is 2.537%, down 0.005% from Friday's average of 2.542%. For each $100,000 borrowed at today's average rate, your total monthly principal and interest payment would be $669. During your entire loan repayment period, you'd pay total interest costs of $20,336 per $100,000 borrowed.

This loan will save you a lot of money over time compared to mortgages with a longer repayment period. It has a low interest rate, and you pay interest for a very short time. The problem is, the monthly payments are considerably higher since you aren't making many of them, so it could be difficult to afford it.

5/1 ARMs

The average 5/1 ARM rate is 2.943%, down 0.002% from Friday's average of 2.945%. After five years, this rate can change because this is an adjustable-rate mortgage. The rate is tied to a financial index. If it moves up, your loan becomes more costly both each month and over time. Be sure to consider this potential risk.

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.