by Maurie Backman | March 4, 2021
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Here's what mortgage rates look like today. Should you apply for a home loan?
Today's mortgage rates are mixed compared to yesterday. This is what they look like:
|Mortgage Type||Today's Interest Rate|
|30-year fixed mortgage||3.164%|
|20-year fixed mortgage||2.835%|
|15-year fixed mortgage||2.449%|
The average 30-year mortgage rate today is 3.164%, up 0.007% from yesterday. At today's rate, you'll pay principal and interest of $430.72 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 2.835%, down 0.009% from yesterday. At today's rate, you'll pay principal and interest of $546.23 for every $100,000 you borrow. Though your monthly payment will go up by $116.22 with a 20-year, $100,000 loan versus a 30-year loan of the same amount, you'll save $23,964.63 in interest over the course of your repayment period for every $100,000 you borrow.
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The average 15-year mortgage rate today is 2.449%, down 0.010% from yesterday. At today's rate, you'll pay principal and interest of $664.34 for every $100,000 you borrow. Compared to the 30-year loan, your monthly payment will be $236.06 higher per $100,000 in mortgage principal. Your interest savings, however, will amount to $35,476.33 over the life of your repayment period per $100,000 of mortgage debt.
The average 5/1 ARM rate is 2.822%, down 0.125% from yesterday. With a 5/1 ARM, you lock in your initial interest rate for five years, but beyond that point, your rate can adjust once a year, either upward or downward. The 5/1 ARM rate has dropped substantially compared to where it was in February, and right now, there's a significant discount to be had with this loan product compared to a 30-year fixed loan. Just make sure you understand the risks of getting an adjustable-rate mortgage if you decide to go this route.
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 pretty 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 pretty attractive, we don't know if rates will go up or down over the next few months. As such, it pays to:
Though mortgage rates may be higher these days than they were a month ago, they're still quite competitive on a historical basis. If you're ready to apply for a mortgage, reach out to a few different lenders so you can compare offers. Each lender sets its own requirements when it comes to things like credit score and debt-to-income ratio, so it makes sense to shop around for the best deal possible.
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.
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