Current Mortgage Rates -- May 21, 2021: Rates Down for Most Loans

What happened to average mortgage rates on May 21, 2021?

Average mortgage rates declined a bit for most loans today. A mortgage is the largest debt most people take on in their lifetime. Comparing rates and terms is essential before applying for a home loan.

Check out average mortgage rates for Friday, May 21, to get an idea of what it might cost you to borrow for a house:

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

30-year mortgage rates

The average 30-year mortgage rate today is 3.164%, down 0.003% from yesterday's average of 3.167%. If you borrow at today's average rate, your monthly principal and interest payment would be $431 per $100,000 borrowed. Total interest costs would add up to $54,980 per $100,000 borrowed over the life of the loan.

20-year mortgage rates

The average 20-year mortgage rate today is 2.960%, up 0.002% from yesterday's average of 2.958%. A loan at today's average rate would cost you $553 per month in principal and interest for each $100,000 you borrow. Over the life of the loan, you'd pay total interest costs of $32,623 per $100,000 borrowed.

Interest is lower over time with this loan compared with the 30-year because you aren't paying it for as long of a time. But each monthly payment is higher since you make 120 fewer payments.

15-year mortgage rates

The average 15-year mortgage rate today is 2.413%, down 0.006% from yesterday's average of 2.419%. If you borrow at today's average rate, you'd have a monthly principal and interest payment of $664 per $100,000 borrowed. You'd be looking at total interest costs of $19,286 per $100,000 in mortgage debt over the life of the loan.

By cutting your payoff time in half compared with the 30-year loan, you'll make each monthly payment a lot higher. Of course, you will also reduce total borrowing costs substantially. Think about whether lower monthly payments or lower total costs are most important to you.

5/1 ARMs

The average 5/1 ARM rate is 2.951%, down 0.02% from yesterday's average of 2.971%. You are guaranteed this rate just for the first five years. Since it could change -- and potentially adjust upward -- your monthly payments could go up after that. Since the 30-year fixed-rate loan guarantees your rate for the life of the loan and it isn't much more expensive currently, decide whether you really want to risk rising rates by locking in a 5/1 ARM instead.

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 pretty 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, historically speaking, 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.