by Christy Bieber | May 5, 2021
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Today, mortgage rates are a mix. See how rates are trending and learn about what that means for your ability to borrow to buy a home.
On May 5, 2021, mortgage rates were mixed, with some up and others down. Although your personalized rate is determined by your financial situation, it's still important to know how average rates are trending.
Take a look at average mortgage rates for May 5, 2021.
|Mortgage Type||Today's Interest Rate|
|30-year fixed mortgage||3.144%|
|20-year fixed mortgage||2.972%|
|15-year fixed mortgage||2.401%|
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The average 30-year mortgage rate today is 3.144%, down 0.012% from yesterday's average of 3.156%. At today's average rate, you'd pay $429 per month in principal and interest per $100,000 borrowed. Over the life of the loan, your total interest costs would add up to $54,588 per $100,000 borrowed.
The average 20-year mortgage rate today is 2.972%, up 0.013% from yesterday's average of 2.959%. For each $100,000 borrowed at today's average rate, your total monthly principal and interest payment would be $553. You'd be looking at total interest costs of $32,767 per $100,000 in mortgage debt over the life of the loan.
Although you save money over time with the 20-year loan versus the 30-year loan, you will end up having to make much higher monthly payments. This happens because you make many fewer payments since you'll end up debt-free a decade sooner.
The average 15-year mortgage rate today is 2.401%, up 0.004% from yesterday's average of 2.397%. If you borrow at today's average rate, you'd have a monthly principal and interest payment of $662 per $100,000 borrowed. Total interest costs would be $19,185 per $100,000 in mortgage debt over the life of the loan.
By shortening your repayment timeline further with a 15-year loan, you maximize your interest savings but your monthly payments will be very high. Make sure this is affordable for you without compromising other key financial goals.
The average 5/1 ARM rate is 2.763%, down 0.009% from yesterday's average of 2.772%. Your interest rate is locked in only for the first five years with this loan. So although it starts lower than the 30-year fixed rate loan, you need to be aware of the risk that rates could go up over time. This could make payment costs and total interest costs higher.
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:
To find out what rates are available to you, compare rates from at least three of the best mortgage lenders before locking in.
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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