Today's Mortgage Rates -- January 29, 2021: Rates Declined

Thinking of borrowing to buy a home? Mortgage rates fell on Jan. 29, 2021.

On Jan. 29, 2021, mortgage rates were down. If you're considering buying a home, it's important to understand how rates are trending. Here's what you need to know about average mortgage interest rates as the month draws to a close.

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

30-year mortgage rates

The average 30-year mortgage rate today is 2.800%, down .008% from yesterday's average of 2.808%. A loan at today's average rate would come with a monthly principal and interest payment of $411 per $100,000 borrowed. Over the life of the loan, your total interest costs would add up to $47,922 per $100,000 borrowed.

20-year mortgage rates

The average 20-year mortgage rate today is 2.611%, down 0.001% from yesterday's average of 2.612%. At today's average rate, the monthly principal and interest payment would add up to $535 per $100,000 in mortgage debt. During your entire loan repayment period, you'd pay total interest costs of $28,478 per $100,000 borrowed.

Both your interest rate and repayment timeline play a huge role in the amount you'll pay for your mortgage each month and over time. A 20-year loan has a slightly lower interest rate than a 30-year mortgage but has a shorter repayment timeline. Monthly payments are higher as a result, but total interest costs are lower.

15-year mortgage rates

The average 15-year mortgage rate today is 2.208%, down 0.039% from yesterday's average of 2.247%. If you borrow at today's average rate, you'd have a monthly principal and interest payment of $653 per $100,000 borrowed. Total interest costs would be $17,564 per $100,000 in mortgage debt over the life of the loan.

Because of the lower interest rate and very short repayment timeline, a 15-year mortgage comes at a far lower cost than the 30-year or 20-year loan options. Monthly payments, however, are much higher.

5/1 ARMs

The average 5/1 ARM rate is 3.184%, down 0.002% from yesterday's average of 3.186%. ARMs aren't a good loan choice right now due to the fact that starting interest rates are already above the average rates on fixed-rate alternatives. These rates will almost inevitably go up even more once they begin adjusting, since rates are near record lows now.

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.