Thinking of buying a house soon? If so, you should keep an eye out for average mortgage rates, as the national average rate can affect how much a lender can charge you to borrow for a home.
Here are the average mortgage rates of the day for fixed and adjustable rate loans:
30-year mortgage rates
The 30-year average mortgage rate today stands at 3.304%, down 0.005% from Friday’s average of 3.309%. A mortgage at the current average interest rate would cost you $ 438 per $ 100,000 borrowed. Over the life of the loan, your total interest charges would be $ 57,743 for every $ 100,000 borrowed.
20-year mortgage rates
The 20-year average mortgage rate today stands at 3.015%, up 0.005% from Friday’s average of 3.010%. If you borrow at today’s average rate, you would have a monthly principal and interest payment of $ 555 per $ 100,000 borrowed. Your total interest charges over the term of the loan would equal $ 33,284 per $ 100,000 borrowed.
If you’d rather pay less over time and are okay with a higher monthly payment, you might prefer the 20-year loan over the 30-year loan. When you shorten your repayment period, you end up increasing each payment you make, but you also qualify for a lower rate and pay interest for less time.
15-year mortgage rates
The 15-year average mortgage rate today stands at 2.579%, up 0.018% from Friday’s average of 2.561%. You would consider a principal and interest payment of $ 671 per $ 100,000 borrowed at today’s average rate. The total interest charge would be $ 20,693 per $ 100,000 of mortgage debt over the term of the loan.
This loan has an even shorter repayment term than the 20 year loan, so you end up with even higher monthly payments, but you also save a lot more over the life of the loan. Think carefully about the opportunity cost of committing to such high monthly payments and make sure they are affordable for you.
The average 5/1 ARM rate is 3.019%, up 0.09% from Friday’s average of 3.109%. ARM stands for Variable Rate Mortgage, and as the name suggests, the rate adjusts. It is blocked for the first five years and can then move with a financial index. If the rates do eventually adjust, then you might consider higher monthly payments and higher total costs over time.
Should I lock in my mortgage rate now?
A mortgage rate freeze guarantees you a certain interest rate for a specified period of time, usually 30 days, but you may be able to guarantee your rate for up to 60 days. You will usually pay a fee to lock in your mortgage rate, but this way you are protected in the event of a rate hike before your mortgage closes.
If you plan to close your home in the next 30 days, it pays to lock in your mortgage rate based on today’s rates, especially since they are very competitive. But if your close is more than 30 days away, you might want to choose an adjustable rate lock instead for what will usually be a higher fee, but could save you money in the long run. A variable rate lock allows you to get a lower rate on your mortgage if rates drop before you close, and while rates today are still quite low, we don’t know if rates will go up or down. over the next few months. As such, it is beneficial to:
- LOCK if closing 7 days
- LOCK if closing 15 days
- LOCK if closing 30 days
- FLOAT if closing 45 days
- FLOAT if closing 60 days
To find out what rates are available to you, compare the rates of at least three of the top mortgage lenders before committing.