Today's Mortgage Rates - August 19, 2020

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Now may be a good time to lock in a mortgage, and these are the rates you'd be looking at today.

Homebuyers should shop around for a loan as one of the first steps in the buying process. The good news is, mortgage rates remain near record lows, which can make purchasing a new home much more affordable. Although rates have ticked up slightly in recent days, it may still be a great time to lock in as today's rates are still well below historical averages. Check them out below to get a better idea of what a mortgage loan might cost you.

Term Today's Rate APR
30-Year Fixed Mortgage Rate 3.050% 3.215%
20-Year Fixed Mortgage Rate 3.059% 3.204%
15-Year Fixed Mortgage Rate 2.617% 2.826%
5/1 ARM 3.270% 3.327%

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

30-year mortgage rates

For most buyers, 30-year mortgages are the default option and are a good choice because they provide affordable monthly payments due to a long repayment timeline. Fixed-rate 30-year mortgages provide certainty for the life of the loan, as the rate never changes. And today's average rate of 3.050% is one of the most affordable in recent history. A $200,000 loan locked in at that rate would give you a monthly payment of just $849 for principal and interest, but that figure does not include taxes and insurance. Total costs of the loan would be $305,500.

20-year mortgage rates

A 20-year mortgage allows you to become debt-free 10 years ahead of when you'd pay off your 30-year loan. However, because you make far fewer payments, your monthly payments are higher. Right now, the average interest rate on a 20-year loan of 3.059% is a little bit above the average rate on a 30-year loan. That means these loans may not be the most cost-effective option -- instead, you could opt for a 30-year mortgage instead and simply make extra payments if you want to become debt-free in less time.

15-year mortgage rates

Because a 15-year fixed-rate mortgage has a lower interest rate than a 30-year loan, as well as a shorter repayment timeline, total costs of this loan will be much less. However, monthly payments will be higher since you're making fewer of them. The good news is, with today's low interest rates, payments should still be very affordable. If you lock in at today's average rate of 2.617%, a $200,000 loan over 15 years would provide a monthly payment of $1,345, but your total loan costs would be just $242,032. That's more than $63,000 less than a 30-year fixed-rate mortgage.

5/1 ARMs

As the name suggests, an adjustable-rate mortgage has a rate that changes over the life of the loan. With a 5/1 ARM, the five means the starting rate will be fixed for the first five years while the one means the loan rate can change once annually after that. With the average interest rate for a 5/1 ARM above the average rate on a 30-year fixed loan, many borrowers would be better off with the predictable low rates the fixed-rate loan provides during the entire repayment period.

Should I lock in a mortgage right now?

A mortgage rate lock guarantees you a specific rate for a preset period of time -- usually 30 days, but you may be able to lock in your rate for up to 60 days. You'll generally pay a fee for a mortgage rate lock, but in exchange you're protected in the event that there's a substantial jump in rates between now and your loan closing date.

If you plan to close on your home within the next month, then it could pay to lock in your rate based on how today's numbers look, and also based on recent rate fluctuations. Today's rates are actually quite competitive across the board, so no matter what loan term you're interested in, you have a chance to lock in a good deal.

However, if your closing is more than a month away, you may want to choose a floating rate lock instead for what will generally be a higher fee, but a potentially worthwhile one. A floating rate lock allows you to snag a lower rate on your mortgage if rates fall prior to your closing, and given the way rates have moved in recent weeks, there's a chance they could go lower in time.

  • 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

Whether you decide to lock in your rate or float your rate, you should first get quotes from several mortgage lenders before deciding which loan to take out. There are different credit score requirements and qualifying criteria, and some lenders may provide much more affordable loans than others. Comparing loan costs from at least three lenders will help ensure you find the best possible rate for your mortgage.

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