Today's Mortgage Rates -- March 3, 2021: Rates Mixed

Mortgage rates crept up for some loans on Wednesday, but many homeowners can still get affordable loans.

On March 3, 2021, mortgage rates continued their upward climb for some loans. After repeatedly hitting record lows last year, rates have been moving up slightly in recent weeks. Although homeowners may be unhappy they missed out on rock-bottom rates, today's rates are still competitive and home buyers shouldn't be dissuaded from applying for a loan.

Here's what you need to know about average mortgage rates for Wednesday March 3, 2021 if you're considering purchasing a property.

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

30-year mortgage rates

The average 30-year mortgage rate today is 3.157%, up 0.007% from yesterday's average of 3.150%. If you borrow at today's average rate, you'd have a monthly principal and interest payment of $430 per $100,000 borrowed. Property tax payments and insurance payments aren't included in this monthly payment and would be extra. A mortgage loan at today's average interest rate would cost you $54,843 in interest per $100,000 borrowed over the life of the loan.

20-year mortgage rates

The average 20-year mortgage rate today is 2.844%, up 0.026% from yesterday's average of 2.818%. If you borrow at today's average rate, your monthly principal and interest payment would be $547 per $100,000 borrowed. You'd be looking at total interest costs of $31,237 per $100,000 in mortgage debt over the life of the loan.

Interest costs for this loan option are higher than with the 15-year fixed-rate mortgage but lower than with the 30-year loan. The repayment timeline and interest rate both determine how much interest you'll pay over the life of the loan. A shorter repayment timeline means less interest paid over time, so lower total interest costs. A longer loan term means you pay interest for a longer period, so your costs are higher.

By contrast, a 20-year mortgage has a lower monthly payment than the 15-year loan but a higher monthly payment than the 30-year option. That's because the fewer payments you make, the larger each one needs to be.

15-year mortgage rates

The average 15-year mortgage rate today is 2.459%, down 0.013% from yesterday's average of 2.472%. For each $100,000 borrowed at today's average rate, your monthly principal and interest payment would add up to $665. Over the life of the loan, you'd pay total interest costs of $19,675 per $100,000 borrowed.

With a shorter repayment timeline than either the 30-year or 20-year loan options, a 15-year fixed-rate loan would come with high monthly payments but the lowest total interest costs.

5/1 ARMs

The average 5/1 ARM rate is 2.947%, down 0.071% from yesterday's average of 3.018%. An adjustable-rate mortgage is riskier than a fixed-rate mortgage because the rate adjusts. If rates go up after five years when your initial rate expires, you could see higher monthly payments. If an ARM starts at a lower rate than fixed-rate alternatives or if you think rates are likely to fall once they begin adjusting, this loan makes sense. But right now, with rates still very low and with the 5/1 ARM's starting rate just barely below the rate on the 30-year fixed-rate loan, there's no reason to get an ARM.

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.