Today's Mortgage Rates -- September 16, 2021: All Rates Except 20-Year Drop

If you're in the market to buy a home, you might be interested to know that most mortgage rates dropped today.

Average mortgage rates mostly fell today, with only the 20-year fixed seeing a slight increase. Keeping an eye on rates is a good idea if you're thinking about buying a home so you can spot the best time to lock in your loan.

Here are average mortgage rates for Thursday, Sept. 16:

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

30-year mortgage rates

The average 30-year mortgage rate today is 3.072%, down 0.009% from yesterday's average of 3.081%. Borrowing $100,000 at today's average rate would leave you with a monthly principal and interest payment of $426. Total interest costs over the life of the loan would amount to $53,178 for each $100,000 borrowed.

20-year mortgage rates

The average 20-year mortgage rate today is 2.755%, up 0.006% from yesterday's average of 2.749%. You'd be looking at a principal and interest payment of $543 per $100,000 borrowed at today's average rate. The total costs of interest would add up to $30,239 per $100,000 borrowed.

Even though the 20-year loan is up a bit from yesterday and you'd have to make monthly mortgage payments that are $117 higher than with the 30-year, this loan is still one to consider. You'd pay off your mortgage 10 whole years sooner and would save a substantial $22,939 in total interest.

15-year mortgage rates

The average 15-year mortgage rate today is 2.323%, down 0.016% from yesterday's average of 2.339%. A mortgage loan at today's average interest rate would cost you $659 per month in principal and interest for each $100,000 borrowed. Over the life of the loan, you'd pay total interest costs of $18,570 per $100,000 borrowed.

This loan comes with the shortest payoff time and the highest monthly payment. If you can swing the higher monthly cost, however, you stand to save a whopping $34,608 in interest over the life of the loan compared with the 30-year.

5/1 ARMs

The average 5/1 ARM rate is 2.969%, down 0.024% from yesterday's average of 2.993%. ARM stands for adjustable-rate mortgage, meaning that after the initial five-year period is up, the loan can begin adjusting annually with a financial index. You'd lock in a lower rate today with a 5/1 ARM than with the 30-year loan, but unless you plan to sell before that five years is up, then it's best not to take the risk of your rate and mortgage costs rising down the road.

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 specific offers are available to you, it's best to shop around and compare the best mortgage lenders before deciding on your loan. Your individual financial credentials will impact the rates you're eligible for, so it pays to work on improving your credit score and debt to income ratio before applying. Also, make sure to take a look at closing costs when you compare offers, as sometimes what appears to be the best rate might actually come with higher costs all-in.