Today’s Mortgage Rates — March 17, 2021: Rates Up for Fixed-Rate Loans | The Motley Fool

On March 17, 2021, mortgage rates rose slightly for fixed-rate loan options. If you are buying a home, the good news is that these rates still remain competitive by historical standards even though they are up from recent record lows. Here’s what you need to know about mortgage interest rates today:

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

30-year mortgage rates

The average 30-year mortgage rate today is 3.230%, up 0.024% from yesterday’s average of 3.206%. A mortgage loan at today’s average interest rate would cost you $434 per $100,000 borrowed. This doesn’t include insurance or property taxes. Over the life of the loan, your total interest costs would add up to $56,279 per $100,000 borrowed.

20-year mortgage rates

The average 20-year mortgage rate today is 2.934%, up 0.035% from yesterday’s average of 2.899%. You’d be looking at a principal and interest payment of $551 per $100,000 borrowed at today’s average rate. Total interest costs would add up to $32,312 per $100,000 borrowed over the life of the loan.

Your mortgage loan term and interest rate both play a role in how much your monthly payments and total borrowing costs are. The 20-year loan has a lower interest rate than the 30-year, but higher monthly payments due to the short timeline for repaying your debt. You save considerably on interest compared with the 30-year loan though, which makes sense both because you’re paying a lower borrowing cost and you’re paying interest for less time.

15-year mortgage rates

The average 15-year mortgage rate today is 2.486%, up 0.006% from yesterday’s average of 2.480%. If you borrow at today’s average rate, you’d have a monthly principal and interest payment of $666 per $100,000 borrowed. During your entire loan repayment period, you’d pay total interest costs of $19,903 per $100,000 borrowed.

Due to its low interest rate and short payoff time, the 15-year loan has considerably lower total costs over time than the 20-year or 30-year loan. However, even though the interest rate is well below the rate on the other two fixed-rate options, your monthly payment is still very high since you have to pay your balance in full in far less time.

5/1 ARMs

The average 5/1 ARM rate is 2.927%, down 0.016% from yesterday’s average of 2.943%. This rate is just slightly below the interest rate on the 30-year fixed-rate loan. But unlike the 30-year fixed-rate option, which guarantees your rate will never change, this rate can fluctuate after five years. Since there’s a good chance it will go up, and the initial rate is only a little bit lower than the 30-year alternative, most borrowers are better off with the guarantee that comes with a fixed-rate loan.

Should I lock my mortgage rate now?

A mortgage rate lock guarantees you a certain interest rate for a specified 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 since they’re so competitive. 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 still quite low, 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

To find out what rates are available to you, compare rates from at least three of the best mortgage lenders before locking in.

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