Rate increase for fixed rate loans
Thinking of buying a house? Check out today’s average mortgage rates.
If you’re hoping to own a home at the start of the New Year, it’s a good idea to pay attention to average mortgage rates. Here are today’s average rates for December 31, 2021 so you can get a feel for what homeownership could cost.
30-year mortgage rates
The 30-year average mortgage rate today stands at 3.367%, up 0.001% from yesterday’s average of 3.366%. If you borrow at today’s average rate, you would have a monthly principal and interest payment of $ 442 for every $ 100,000 borrowed. The total interest charge would be $ 58,995 per $ 100,000 borrowed over the term of the loan.
20-year mortgage rates
The 20-year average mortgage rate today stands at 3.104%, up 0.036% from yesterday’s average of 3.068%. You would consider a principal and interest payment of $ 560 per $ 100,000 borrowed at today’s average rate. Over the life of the loan, your total interest charges would be $ 34,356 per $ 100,000 borrowed.
This is a cheaper term loan than the 30-year loan. You reduce the time that you pay interest with this loan, and you also pay interest at a lower rate. However, since you are making a lot less payments, you should be aware that each one has to be higher and that could put a strain on your budget.
15-year mortgage rates
The 15-year average mortgage rate today stands at 2.542%, up 0.006% from yesterday’s average of 2.536%. For every $ 100,000 borrowed at today’s average rate, your monthly principal and interest payment would be $ 669. The total interest charge would be $ 20,378 per $ 100,000 borrowed at today’s average rate.
The monthly payments are very high with this loan because your repayment period is very short. But you save a lot over time, and you’ll get rid of your debt pretty quickly. So, if you want to own your home ASAP and can afford higher monthly fees, then this loan may be right for you.
The average 5/1 ARM rate is 2.945%, down 0.032% from yesterday’s average of 2.977%. Since this is an adjustable rate mortgage, you won’t necessarily pay that rate for the life of the loan. It is guaranteed for five years and can be changed afterwards. If the financial index that the loan is tied to goes up, you will end up with higher loan costs and higher monthly payments.
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 seven 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.