by Maurie Backman | Oct. 13, 2020
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Today's mortgage rates are still quite appealing. Should you lock in?
Mortgage rates are staying quite competitive as we inch into mid-October, with both the 30- and 20-year loan coming in at well under 3% and the 15-year loan at well under 2.5%. This is what today's rates look like:
|Mortgage Type||Today's Interest Rate|
|30-year fixed mortgage||2.909%|
|20-year fixed mortgage||2.784%|
|15-year fixed mortgage||2.369%|
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The average 30-year mortgage rate today is 2.909%, up 0.001% from yesterday. At today's rate, you'll pay principal and interest of $416.44 for every $100,000 you borrow. That doesn't include additional expenses like property taxes and homeowners insurance premiums.
Check out The Ascent's mortgage calculator to see what your monthly payment might be and how much your loan will ultimately cost. Also learn how much money you'd save by snagging a lower interest rate, making a larger down payment, or choosing a shorter loan term.
The average 20-year mortgage rate today is 2.784%, up 0.026% from yesterday. At today's rate, you'll pay principal and interest of $543.85 for every $100,000 you borrow. Though your monthly payment will go up by $127.41 with a 20-year, $100,000 loan versus a 30-year loan of the same amount, you'll save $19,397.76 in interest over the course of your repayment period for every $100,000 you borrow.
The average 15-year mortgage rate today is 2.369%, down 0.005% from yesterday. At today's rate, you'll pay principal and interest of $660.41 for every $100,000 you borrow. Compared to the 30-year loan, your monthly payment will be $243.97 higher per $100,000 in mortgage principal. Your interest savings, however, will amount to $31,047.84 over the life of your repayment period per $100,000 of mortgage debt.
The average 5/1 ARM rate is 3.411%, up 0.075% from yesterday. With a 5/1 ARM, you're only guaranteed your initial interest rate for a five-year period. Once that period is over, your rate will adjust once a year -- either upward or downward, depending on market conditions. Since you won't be getting a discount on your interest rate by opting for a 5/1 ARM, a 30-year fixed loan makes a lot more sense right now due to its much lower rate.
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 in case rates climb between now and when you actually 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 very 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 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:
If you're ready to lock in a mortgage, make sure to get quotes from different lenders to see what offers you're eligible for based on your credit score, income, and existing level of debt. And also, pay attention to the closing costs each lender wants to charge you. You may get two or more comparable offers as far as rates go, and so your closing costs could sway you to choose one lender over another.
The Ascent team partners with market-leading data provider Optimal Blue to track the seven-day average of daily mortgage rates that actual borrowers are locking in nationwide. Learn more about our mortgage rates tracking methodology.
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.
The Ascent's in-house mortgages expert recommends this company to find a low rate - and in fact he used them himself to refi (twice!). Click here to learn more and see your rate. While it doesn't influence our opinions of products, we do receive compensation from partners whose offers appear here. We're on your side, always. See The Ascent's full advertiser disclosure here.
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