by Maurie Backman | May 6, 2021
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Here's what today's mortgage rates are averaging. Are you ready to apply for a home loan?
Today's mortgage rates are mixed compared to yesterday. Here's what they look like on May 6, 2021:
|Mortgage Type||Today's Interest Rate|
|30-year fixed mortgage||3.140%|
|20-year fixed mortgage||2.956%|
|15-year fixed mortgage||2.415%|
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The average 30-year mortgage rate today is 3.140%, down 0.004% from yesterday. At today's rate, you’ll pay principal and interest of $429.00 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 2.956%, down 0.016% from yesterday. At today's rate, you’ll pay principal and interest of $552.00 for every $100,000 you borrow. Though your monthly payment will go up by $123.00 with a 20-year, $100,000 loan versus a 30-year loan of the same amount, you'll save $22,061.00 in interest over the course of your repayment period for every $100,000 you borrow.
The average 15-year mortgage rate today is 2.415%, up 0.014% from yesterday. At today's rate, you’ll pay principal and interest of $663.00 for every $100,000 you borrow. Compared to the 30-year loan, your monthly payment will be $232.00 higher per $100,000 in mortgage principal. Your interest savings, however, will amount to $35,310.00 over the life of your repayment period per $100,000 of mortgage debt.
The average 5/1 ARM rate is 2.804%, down 0.041% from yesterday. With a 5/1 ARM, you can snag a discount on your loan's interest rate for the next five years. In exchange, you take on the risk of having your rate adjust once a year after that. While it may creep downward in time, it can also move upward, thereby making your monthly mortgage payments cost more. If you're going to get an adjustable-rate mortgage, make sure you 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 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:
If you're ready to apply for a mortgage, you'll want to first make sure you're a solid candidate. That means having a good credit score (you'll need a minimum of 620 for a conventional mortgage, but it's best to aim higher), a low debt-to-income ratio, funds for a down payment, and a steady, reliable income source. If you can check off these boxes, be sure to apply with a few different mortgage lenders rather than just one. Each lender sets its own rates and closings costs, and comparing offers will help you land the best deal.
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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