Current Mortgage Rates -- May 3, 2021: Rates Are Mixed

What happened to average mortgage rates on May 3, 2021?

On May 3, 2021, mortgage rates were mixed, with some trending up and others down. Anyone who is considering purchasing a home should be aware of how mortgage rates are trending, as this can affect their costs of borrowing.

Here's what happened with average mortgage rates today.

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

The average 30-year mortgage rate today is 3.156%, up 0.003% from Friday's average of 3.153%. You'd be looking at a principal and interest payment of $430 per $100,000 borrowed at today's average rate. Total interest costs would add up to $54,823 per $100,000 borrowed over the life of the loan.

20-year mortgage rates

The average 20-year mortgage rate today is 2.989%, down 0.003% from Friday's average of 2.992%. If you borrow at today's average rate, you'd have a monthly principal and interest payment of $554 per $100,000 borrowed. The total costs of interest would add up to $32,971 per $100,000 borrowed at today's average rate.

The repayment timeline makes a big difference in terms of both monthly payment and total costs over time. As you can see, when you take a decade less time to pay off your loan, each payment must be much higher but you won't pay nearly as much over the life of the loan.

15-year mortgage rates

The average 15-year mortgage rate today is 2.405%, up 0.015% from Friday's average of 2.390%. A mortgage loan at today's average interest rate would cost you $662 per $100,000 borrowed. Over the life of the loan, total interest costs would be $19,219 per $100,000 in mortgage debt.

With a 15-year mortgage, you're halving your payment time compared with a 30-year loan. The cost savings over time is considerable but each monthly payment is much higher, so be sure you can afford the monthly payments before considering this loan.

5/1 ARMs

The average 5/1 ARM rate is 2.872%, up 0.059% from Friday's average of 2.813%. Your initial starting rate is guaranteed for only five years with this type of loan. So although the average rate is below the 30-year fixed rate option, you're taking on the risk of rates and payments rising if you choose an adjustable rate loan.

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 you'll be 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, 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. This will usually come with a higher fee, but it 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:

1. LOCK if closing in 7 days
2. LOCK if closing in 15 days
3. LOCK if closing in 30 days
4. FLOAT if closing in 45 days
5. 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 your choice.