Today's Mortgage Rates -- July 29, 2021: Fixed Rates Drop

Here's a snapshot of what mortgage rates look like today. Should you apply for a home loan?

Mortgage rates dropped from yesterday for fixed-rate products. Here's what they look like on July 29, 2021:

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

30-year mortgage rates

The average 30-year mortgage rate today is 3.046%, down 0.010% from yesterday. At today's rate, you'll pay principal and interest of $424.00 for every $100,000 you borrow. That doesn't include added expenses like property taxes and homeowners insurance premiums.

20-year mortgage rates

The average 20-year mortgage rate today is 2.787%, down 0.008% from yesterday. At today's rate, you'll pay principal and interest of $544.00 for every $100,000 you borrow. Though your monthly payment will go up by $120.00 with a 20-year, $100,000 loan versus a 30-year loan of the same amount, you'll save $22,187.00 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 2.319%, down 0.017% from yesterday. At today's rate, you'll pay principal and interest of $658.00 for every $100,000 you borrow. Compared to the 30-year loan, your monthly payment will be $234.00 higher per $100,000 in mortgage principal. Your interest savings, however, will amount to $34,241.00 over the life of your repayment period per $100,000 of mortgage debt.

5/1 ARMs

The average 5/1 ARM rate is 3.008%, down 0.122% from yesterday. If you take out a 5/1 ARM, you're guaranteed the same interest rate for five years, but from there, it'll adjust once annually. While it's possible for your loan's interest rate to go down, it can also go up, making your monthly payments increase as well. Since you can lock in a 30-year loan at a rate that's not much higher than the 5/1 ARM right now, the 30-year loan makes more sense.

Should I lock in 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 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 very attractive, historically speaking. 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. While today's rates are pretty 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

If you think the time is right to apply for a mortgage, reach out to a few different lenders to see what rates they come back with. And don't forget to ask about closing costs. It could be that one lender offers a lower rate on a home loan but charges much higher fees to finalize it. Look at the big picture when making your decision.