As March draws to a close, average mortgage rates for fixed rate lending options fell on Friday, March 26, 2021. Potential homeowners should research rates carefully. Although rates have risen from recent lows, there are still plenty of opportunities to qualify for an affordable home loan, especially with rates falling a bit today.
Here’s what you need to know about today’s average mortgage rates if you’re buying a home.
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 3.306%, down 0.015% from yesterday’s average of 3.321%. A loan at the current average rate would cost you $ 438 per month in principal and interest for every $ 100,000 you borrow. The total interest charge would be $ 57,783 per $ 100,000 borrowed over the term of the loan.
20-year mortgage rates
The 20-year average mortgage rate today stands at 2.996%, down 0.022% from yesterday’s average of 3.018%. If you borrow at today’s average rate, you would have a monthly principal and interest payment of $ 554 for every $ 100,000 borrowed. During the entire repayment period of your loan, you would pay a total interest charge of $ 33,055 per $ 100,000 borrowed.
Both your interest rate and your repayment schedule affect your monthly payment and the total interest owed over time. Although the 20-year loan has a lower average rate than the 30-year loan, its shorter repayment term means monthly payments are more expensive, but the total interest charges are lower.
15-year mortgage rates
The 15-year average mortgage rate today stands at 2.583%, down 0.011% from yesterday’s average of 2.594%. For every $ 100,000 borrowed at today’s average rate, your monthly principal and interest payment would be $ 671. Your total interest charges over the life of the loan would equal $ 20,727 per $ 100,000 borrowed.
A 15-year loan has a shorter repayment period than a 20 or 30-year loan, so it comes with higher monthly payments but substantial interest savings over the life of the loan.
The average 5/1 ARM rate is 3.133%, up 0.047% from yesterday’s average of 3.066%. While this starting interest rate is lower than the 30-year fixed rate loan, it is only guaranteed for five years. You are taking a big risk by accepting this type of loan, as the interest rates on the loans could increase after this initial five-year period, which would increase your monthly payments. Take this into account when deciding if an ARM is right for you.
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 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 you lock in.