Current Mortgage Rates -- October 6, 2020: The Low Rates Keep on Coming

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Today's mortgage rates are extremely appealing. Should you lock in?

Mortgage rates are staying quite competitive, with both the 30- and 20-year loan coming in at well under 3% and the 15-year loan well under 2.5%. Here's what today's rates look like:

Mortgage Type Today's Interest Rate
30-year fixed mortgage 2.899%
20-year fixed mortgage 2.731%
15-year fixed mortgage 2.379%
5/1 ARM 3.389%

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

30-year mortgage rates

The average 30-year mortgage rate today is 2.899%, unchanged 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 added 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.

20-year mortgage rates

The average 20-year mortgage rate today is 2.731%, down 0.017% from yesterday. At today's rate, you'll pay principal and interest of $541.48 for every $100,000 you borrow. Though your monthly payment will go up by $125.04 with a 20-year, $100,000 loan versus a 30-year loan of the same amount, you'll save $19,967.23 in interest over the course of your repayment period for every $100,000 you borrow.

15-year mortgage rates

The average 15-year mortgage rate today is 2.379%, down 0.001% from yesterday. At today's rate, you'll pay principal and interest of $660.97 for every $100,000 you borrow. Compared to the 30-year loan, your monthly payment will be $244.53 higher per $100,000 in mortgage principal. Your interest savings, however, will total $30,946.74 over the life of your repayment period per $100,000 of mortgage debt.

5/1 ARMs

The average 5/1 ARM rate is 3.389%, down 0.071% from yesterday. With a 5/1 ARM, you're guaranteed your initial interest rate for a five-year period, after which your rate will adjust once a year. That rate could go up or it could go down, but either way, adjustable-rate mortgages carry risk, and generally, that risk is only worth taking if you'll get a discount on your rate initially. Since the 30-year fixed loan is currently available at a much lower rate than the 5/1 ARM, the former makes more sense today.

Should I lock my mortgage rate now?

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 very low and appealing, 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

If you're convinced that it's time to lock in a mortgage, be sure to shop around with different lenders to see what offers you can snag. Each lender sets its own rules and fees, so you may get a better offer from one than another. And also, try reviewing your credit report before applying for a home loan and make sure it's free of errors. The last thing you want is to get stuck with a less favorable mortgage rate because of mistaken information.

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