Today's Mortgage Rates -- September 8, 2020: The 30-Year Is Still Under 3%

Mortgage rates are still very low, so it could be a great time to apply for a home loan.

Mortgage rates change constantly, so if you're planning to buy a new home, it's important that you pay attention to how rates are trending. And today, they're trending low. Here's an overview:

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

30-year mortgage rates

The average 30-year mortgage rate today is 2.932%, which is a slight decrease from last week. For a $200,000 mortgage, you'll be looking at a monthly payment of $835.46 for principal and interest on your loan. Keep in mind, though, that this number doesn't include property taxes, homeowners insurance, HOA fees, or the other recurring expenses you might face once you close on your mortgage.

20-year mortgage rates

The average interest rate for a 20-year fixed mortgage is 2.978%, which is also a decrease from last week. For a $200,000 mortgage, this rate will give you a monthly payment of $1,106.79 for principal and interest on your loan. Now one thing you'll note is that rates for the 30-year and 20-year mortgage are quite comparable. Usually, there's a bit more of a discount to be had by going with a loan whose term is 10 years shorter. But if you can swing the higher monthly payment that comes with a 20-year loan, you'll save about $35,000 in interest over the life of your repayment period.

15-year mortgage rates

The average interest rate for a 15-year fixed mortgage is 2.49%, which is a small increase from last week but a competitive rate nonetheless. For a $200,000 mortgage, today’s rate gives you a monthly payment of $1,333.20 for principal and interest. Clearly, that's a lot more than what your monthly payment would be with a 30-year mortgage, or even a 20-year loan. But with a 15-year loan, you'll pay over $25,000 less in interest than you will for a 20-year mortgage.

5/1 ARMs

The average interest rate for a 5/1 ARM is 3.388%. While that's a decrease from last week, now's still not a good time to get an adjustable-rate mortgage because you can snag a lower rate on a 30-year loan that's fixed. The whole point of an ARM is to get a lower interest rate in exchange for taking on the risk of that rate climbing over time. But if you're not getting a lower rate up front, why assume all of that risk?

Should I lock in a mortgage right now?

A mortgage rate lock guarantees you a certain 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 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 with a 30-year mortgage still available below 3% and the 15-year mortgage staying at under 2.5%. 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 extremely competitive, 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're thinking of applying for a mortgage to snag today's rates, call around to different mortgage lenders first to solicit offers. And if the idea of that sounds overwhelming, enlist the help of a mortgage broker to do it for you. Lenders set their own standards for approving applicants and offering up rates, and they also charge their own closing costs, so getting multiple offers will help you determine where the best deal really lies.