Rates drop for most loans
If you are buying a home, you should check today’s average mortgage rates to see what you could be paying for your loan.
On December 17, 2021, average mortgage rates are down for most loans. Take a look at today’s average mortgage rates for fixed and variable rate mortgages to find out what a loan could cost you if you borrowed to buy a home today.
30-year mortgage rates
The 30-year average mortgage rate today stands at 3.333%, down 0.003% from yesterday’s average of 3.336%. A loan at today’s mid-rate would have a monthly principal and interest payment of $ 440 per $ 100,000 borrowed. You would have a total interest charge of $ 58,319 per $ 100,000 of mortgage debt over the term of the loan.
20-year mortgage rates
The 20-year average mortgage rate today stands at 3.092%, down 0.032% from yesterday’s average of 3.124%. If you borrow at today’s average rate, your monthly principal and interest payments would be $ 559 for every $ 100,000 borrowed. During the entire repayment period of your loan, you would pay a total interest charge of $ 34,211 for every $ 100,000 borrowed.
As you can see, this loan will save you money over time compared to the 30 year loan option. However, it will cost more each month. If you cut the repayment time by a decade, each payment must be much higher than it would be on a loan with a longer repayment period. But this loan has a lower rate, and you don’t pay interest for that long, so your total interest charges are much lower.
15-year mortgage rates
The 15-year average mortgage rate today stands at 2.578%, up 0.001% from yesterday’s average of 2.577%. At today’s average rate, you would pay $ 670 per month in principal and interest for $ 100,000 borrowed. For every $ 100,000 you borrow at today’s average rate, the total interest charge would be $ 20,684.
This loan saves the most over time, but the monthly payments are the highest. Many people find that a 15-year mortgage is too expensive to pay each month or too difficult to obtain. But if you can afford the payments and want to get rid of your debt as soon as possible, then you may decide this loan is right for you.
The average 5/1 ARM rate is 2.681%, down 0.19% from yesterday’s average of 2.871%. Because ARM stands for Variable Rate Mortgage, you cannot rely on this rate to stay the same for the life of the loan. This rate is only guaranteed for the first five years. After that, the rate adjusts with a financial index and might increase. This would leave you with both higher monthly payments and a more expensive loan over time.
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.