Today's Mortgage Rates -- August 18, 2021: Rates Fall for Fixed-Rate Loans

Buying a home? Here's what you can expect for average mortgage rates on Aug. 18, 2021.

Home buyers will find that they can still qualify for a competitive rate on a loan, despite the fact that rates are up compared with record lows during the heart of the pandemic. Here are average mortgage rates for Aug. 18, 2021 to help you determine how much the typical borrower would pay for a home loan:

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

30-year mortgage rates

The average 30-year mortgage rate today is 3.078%, down 0.011% from yesterday's average of 3.089%. If you borrow at today's average rate, your monthly principal and interest payment would be $426 per $100,000 borrowed. The total costs of interest would add up to $53,296 per $100,000 borrowed at today's average rate.

20-year mortgage rates

The average 20-year mortgage rate today is 2.831%, down 0.012% from yesterday's average of 2.843%. You'd be looking at a principal and interest payment of $546 per $100,000 borrowed at today's average rate. During your entire loan repayment period, you'd pay total interest costs of $31,082 per $100,000 borrowed.

As you can see, you have to pay more each month if you choose a 20-year loan rather than a 30-year loan. When you shorten your payoff time, each monthly payment is higher since you have to pay your loan in full more quickly. You save a lot of money over time on interest, though, since you aren't paying interest for as long.

15-year mortgage rates

The average 15-year mortgage rate today is 2.326%, down 0.007% from yesterday's average of 2.333%. For each $100,000 borrowed at today's average rate, your total monthly principal and interest payment would be $659. Over the life of the loan, your total interest costs would add up to $18,545 per $100,000 borrowed.

A low interest rate and a short payoff time make this loan very affordable over time. Of course, you do need to be prepared to cope with considerably higher monthly payments during the 15 years that you're paying back the loan.

5/1 ARMs

The average 5/1 ARM rate is 2.989%, up 0.027% from yesterday's average of 2.962%. ARM stands for adjustable-rate mortgage, and after five years, this rate can begin adjusting along with a financial index that it's tied to. Rates are likely to rise over time, since they are currently near record lows. This would make both your monthly payments and total costs of borrowing more expensive.

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 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:

• 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.