by Maurie Backman | Jan. 12, 2021
Mortgage rates have risen since yesterday but remain competitive nonetheless.
Mortgage rates rose for fixed loans. This is what they look like today:
|Mortgage Type||Today's Interest Rate|
|30-year fixed mortgage||2.812%|
|20-year fixed mortgage||2.573%|
|15-year fixed mortgage||2.220%|
The average 30-year mortgage rate today is 2.812%, up 0.027% from yesterday. At today's rate, you'll pay principal and interest of $411.32 for every $100,000 you borrow. That doesn't include added expenses like property taxes and homeowners insurance premiums.
The average 20-year mortgage rate today is 2.573%, up 0.022% from yesterday. At today's rate, you'll pay principal and interest of $533.22 for every $100,000 you borrow. Though your monthly payment will go up by $121.90 with a 20-year, $100,000 loan versus a 30-year loan of the same amount, you'll save $20,101.72 in interest over the course of your repayment period for every $100,000 you borrow.
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The average 15-year mortgage rate today is 2.220%, up 0.006% from yesterday. At today's rate, you'll pay principal and interest of $653.69 for every $100,000 you borrow. Compared to the 30-year loan, your monthly payment will be $242.37 higher per $100,000 in mortgage principal. Your interest savings, however, will amount to $30,411.16 over the life of your repayment period per $100,000 of mortgage debt.
The average 5/1 ARM rate is 3.301%, down 0.018% from yesterday. A 5/1 ARM will let you lock in your initial interest rate for five years, but from there, it can rise or fall with market conditions. A 5/1 ARM makes sense when the interest rate you get to start with is lower than what you'll get with a fixed-rate loan, but since that's not the case today, you're better off with a 30-year mortgage.
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 if rates climb between now and when you 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 loan if rates fall before you close on your mortgage, and while today's rates are quite competitive, 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 apply for a mortgage, reach out to different lenders to see what rates you're eligible for and what closing costs you'll pay to finalize your loan. Keep in mind that while one lender may offer a lower interest rate, another may be able to keep its fees lower. Of course, the offers you get will hinge on your credit score, income, and existing level of debt, so it pays to shop around and see what lenders come back with.
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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