Fixed mortgage rates are higher today than they were yesterday. Here’s what they look like on October 14, 2021:
6 simple tips to get a 1.75% mortgage rate
Secure access to The Ascent’s free guide on how to get the lowest mortgage rate when buying your new home or refinancing. Rates are still at their lowest for decades, so act today to avoid missing out.
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30-year mortgage rates
The 30-year average mortgage rate today stands at 3.264%, up 0.007% from yesterday. At today’s rate, you’ll pay principal and interest of $ 436.00 for every $ 100,000 you borrow. This does not include additional expenses like property taxes and home insurance premiums.
20-year mortgage rates
The 20-year average mortgage rate today stands at 2.918%, up 0.006% from yesterday. At today’s rate, you will pay principal and interest of $ 550.00 for every $ 100,000 you borrow. Although your monthly payment increases by $ 114.00 with a loan of $ 100,000 over 20 years compared to a loan of the same amount over 30 years, you will save $ 24,853.00 in interest over your repayment period for every $ 100,000 you borrow.
15-year mortgage rates
The 15-year average mortgage rate today stands at 2.493%, up 0.023% from yesterday. At today’s rate, you’ll pay principal and interest of $ 667.00 for every $ 100,000 you borrow. Compared to the 30 year loan, your monthly payment will be $ 231.00 higher for every $ 100,000 of mortgage principal. However, your interest savings will amount to $ 36,962.00 over the duration of your repayment period per $ 100,000 of mortgage debt.
The average 5/1 ARM rate is 2.968%, down 0.114% from yesterday. With an ARM 5/1, you’re only guaranteed your initial rate for five years, and from there, it can go up (or down) depending on market conditions. Since today’s fixed rate loans are so competitive, it might be beneficial to go this route for a home that you plan to live in for many years. But if you are buying a starter home that you don’t plan on keeping very long, then an ARM 5/1 may be a reasonable loan to sign, as you could be moving out before your rate starts to change.
Should I lock in my mortgage rate now?
A mortgage rate freeze guarantees you a specific interest rate for a certain period of time – typically 30 days, but you may be able to guarantee your rate for up to 60 days. You’ll usually pay a fee to lock in your mortgage rate, but that way you’re protected if rates go up by the time 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 attractive historically speaking. 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 loan if rates drop before your mortgage closes. While the rates today are quite low, we don’t know if the rates will go up or down in the next few months. As such, it is beneficial to:
- LOCK if the closure 7 days
- LOCK if the closure 15 days
- LOCK if closing 30 days
- FLOAT if the closure 45 days
- FLOAT if closing 60 days
If you are ready to apply for a mortgage, be sure to contact different lenders to find out about the rates and closing costs they are offering you. One lender may be able to do better on rates while another offers more competitive closing costs to finalize your loan. You will need to calculate a few numbers to see which lender it makes sense to work with.