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On February 26, 2021, mortgage rates increased on fixed rate loans. Rates have repeatedly hit record lows over the past year, and although they have risen in recent days, they are still competitive. Take a look at today’s average mortgage rates to see how they’re going.
|Mortgage type||Interest rate of the day|
|30-year fixed mortgage||3.090%|
|20-year fixed mortgage||2.792%|
|15-year fixed mortgage||2.425%|
30-year mortgage rates
The 30-year average mortgage rate today stands at 3.090%, up 0.047% from yesterday’s average of 3.043%. For every $ 100,000 borrowed at today’s average rate, your monthly principal and interest payment would be $ 426. The total interest charge would be $ 53,530 per $ 100,000 borrowed over the term of the loan.
20-year mortgage rates
The 20-year average mortgage rate today stands at 2.792%, up 0.041% from yesterday’s average of 2.751%. At today’s average rate, the monthly principal and interest payment would be $ 544 per $ 100,000 of mortgage debt. During the entire repayment period of your loan, you would pay a total interest charge of $ 30,618 per $ 100,000 borrowed.
Shortening your 10-year repayment schedule compared to the 30-year loan results in both higher monthly payments as well as lower total interest charges over time. This makes sense, since you reduce your interest payment time and make significantly fewer payments.
15-year mortgage rates
The 15-year average mortgage rate today stands at 2.425%, up 0.043% from yesterday’s average of 2.382%. A loan at the current average rate would cost you $ 553 per month in principal and interest for every $ 100,000 you borrow. You would have a total interest charge of $ 19,388 per $ 100,000 of mortgage debt over the term of the loan.
Since a 15-year loan has a very short repayment period, the monthly payments are much higher than with the 20-year or 30-year loan. But since you’re also paying interest for a very short period of time, you’ll save a lot of money over the life of the loan.
The average 5/1 ARM rate is 3.261%, down 0.055% from yesterday’s average of 3.316%. An ARM only makes sense if the starting interest rate is significantly lower than the rate on fixed-rate loans. This is not currently the case. This is because the starting rate on the ARM is higher than the 30-year fixed rate loan. Since your rates will likely adjust upwards once they start to adjust, it’s not a good idea to bet on an adjustable rate mortgage right now.
Should I lock in my mortgage rate now?
A mortgage rate freeze guarantees you a certain interest rate for a specified period of time – typically 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 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 rates are available to you, compare the rates of at least three of the top mortgage lenders before you lock in.
A historic opportunity to potentially save thousands on your mortgage
There is a good chance that interest rates will not stay at multi-decade lows any longer. That’s why it’s crucial to act today, whether you want to refinance and lower your mortgage payments or are ready to pull the trigger to buy a new home.
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