As we approach the middle of the month, mortgage rates increase slightly for most loans on January 13, 2021. If you’re considering applying for a loan to buy a home, here’s what you need to know about average mortgage rates today. .
The data source: The Ascent National Mortgage Interest Rate Tracker.
30-year mortgage rates
The 30-year average mortgage rate today stands at 2.844%, up 0.032% from yesterday’s average of 2.812%. If you borrow at today’s average rate, you would have a monthly principal and interest payment of $ 413 for every $ 100,000 borrowed. Property taxes and insurance would cost more. The total interest charge would be $ 48,765 per $ 100,000 borrowed over the term of the loan.
20-year mortgage rates
The 20-year average mortgage rate today stands at 2.611%, up 0.038% from yesterday’s average of 2.573%. For every $ 100,000 borrowed at today’s average rate, your monthly principal and interest payment would be $ 535. Over the life of the loan, your total interest charges would be $ 28,478 per $ 100,000 borrowed.
The 30-year average rate is a bit higher than the 20-year average rate, but you will notice that the monthly payments are lower on the longer term loan. When you have 10 more years to pay off your loan, you don’t have to pay that much every month. But of course, your total interest charges are higher with the 30 year option since you will be paying interest for an additional decade.
15-year mortgage rates
The 15-year average mortgage rate today stands at 2.266%, up 0.046% from yesterday’s average of 2.220%. You would consider a principal and interest payment of $ 656 per $ 100,000 borrowed at today’s average rate. The total interest charge would be $ 18,049 per $ 100,000 borrowed.
A 15 year loan has a much lower interest rate than a 30 or 20 year loan. But that is not enough to prevent the monthly payments from being much higher on the 15 year loan because your repayment term is much shorter. As you pay off your loan so quickly, you will definitely save a lot on interest, as you can see.
5/1 arm
The average 5/1 ARM rate is 3.132%, down 0.169% from yesterday’s average of 3.301%. When an ARM has a lower starting interest rate than a 30-year fixed rate loan, sometimes it can be a good idea to take out an adjustable rate mortgage to save on payments initially. This is especially true if you plan to refinance your loan or sell your home before the possibility of a rate hike. But since it isn’t right now, there is no reason to bet on what rates will do in the future – especially since they will almost certainly rise.
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 within 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.
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