by Maurie Backman | March 5, 2021
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Here's what mortgage rates look like today. Are you ready to apply for a home loan?
Today's mortgage rates are lower than they were yesterday. Here's what they look like:
|Mortgage Type||Today's Interest Rate|
|30-year fixed mortgage||3.157%|
|20-year fixed mortgage||2.808%|
|15-year fixed mortgage||2.434%|
The average 30-year mortgage rate today is 3.157%, down 0.007% from yesterday. At today's rate, you'll pay principal and interest of $430.06 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 2.808%, down 0.027% from yesterday. At today's rate, you'll pay principal and interest of $545.04 for every $100,000 you borrow. Though your monthly payment will go up by $114.98 with a 20-year, $100,000 loan versus a 30-year loan of the same amount, you'll save $24,015.89 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 2.434%, down 0.015% from yesterday. At today's rate, you'll pay principal and interest of $663.78 for every $100,000 you borrow. Compared to the 30-year loan, your monthly payment will be $233.72 higher per $100,000 in mortgage principal. Your interest savings, however, will amount to $35,343.28 over the life of your repayment period per $100,000 of mortgage debt.
The average 5/1 ARM rate is 2.818%, down 0.004% from yesterday. With a 5/1 ARM, you lock in your initial interest rate for five years, but once that period ends, your rate can adjust once a year -- either upward or downward, depending on market conditions. The 5/1 ARM rate has fallen a lot compared to where it was in February, and right now, it's a lot lower than the 30-year mortgage. As such, you could end up saving some money on your mortgage payments with a 5/1 ARM, but before you get one, make sure you fully understand the risks involved.
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 pretty 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 still pretty competitive, we don't know if rates will go up or down over the next few months. As such, it pays to:
Though mortgage rates have been rising in recent weeks, you can still get a great deal on a home loan. This especially holds true if you have a high credit score -- one in the mid-700s or better -- and a low debt-to-income ratio. It pays to shop around for a loan with different mortgage lenders so you can compare offers and walk away with the lowest interest rate and closing costs possible.
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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