Today's Mortgage Rates -- September 15, 2020: There Are Still Great Deals to Be Had

Mortgage rates are still quite competitive. Lock in today to snag a low monthly payment on your home.

Mortgage rates are constantly changing, and while they may just fluctuate modestly from one day to the next, it still helps to keep tabs on how they're trending. Applying for a loan one day versus another could mean snagging a lower rate, and monthly savings to follow. With that in mind, here's what today's rates look like:

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

30-year mortgage rates

The average 30-year mortgage rate today is 2.927%. For a $200,000 mortgage, you'll be looking at a monthly payment of $835.46 for principal and interest on your loan. Your total monthly costs will be higher, however, because you'll need to account for expenses like property taxes and homeowners insurance at a minimum. And you may have other fees, like private mortgage insurance, which applies when you don't put down 20% of your home's purchase price at closing.

20-year mortgage rates

The average interest rate for a 20-year fixed mortgage is 2.993%, which is comparable to where the 20-year loan was toward the end of last week. For a $200,000 mortgage, this rate will give you a monthly payment of $1,107.99 for principal and interest on your loan. Now you'll notice that right now, the 30-year mortgage actually has a lower average rate than the 20-year. That's unusual, but make no mistake about it: A 20-year mortgage at under 3% is still a fantastic deal. And if you opt for a 20-year loan, you'll save money on interest and be debt-free sooner.

15-year mortgage rates

The average interest rate for a 15-year fixed mortgage is 2.440%. For a $200,000 mortgage, today’s rate gives you a monthly payment of $1,327.56 for principal and interest. Clearly, that's a much higher monthly payment than what you'll have with a 30- or 20-year loan. But you'll also pay off your mortgage sooner and spend much less on interest. Specifically, you'll reap about $62,000 in interest savings compared to a 30-year loan at today's rate, and about $27,000 in interest savings compared to today's 20-year loan.

5/1 ARMs

The average interest rate for a 5/1 ARM is 3.408%. Now you'll notice that that's higher than the average rate for a 30-year mortgage, which means a 5/1 ARM makes little sense right now. WIth a 5/1 ARM, you're guaranteed the same rate for five years only, but after that, your rate will be subject to change annually. And while your rate could go down in time, it could also go up. Therefore, if you're not reaping savings up front, there's no reason to get an ARM and take on that risk.

Should I lock in a mortgage right 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

If you think now's the right time to apply for a home loan, be sure to talk to different mortgage lenders before accepting an offer. And also, don't just look at the rate you're presented with. Rather, look at the big picture. If one lender offers much lower closing costs on your loan than another, but its mortgage rate is slightly higher, that lender's offer could still make sense. Spend some time reviewing all of your options carefully to help ensure that you walk away with the best deal.