Rates drop for most loans
As of early November, average mortgage rates are down for most loans. If you’re thinking about buying a home, take a look at the current average rates for fixed and variable rate loans, plus some tips on how to decide which mortgage is right for you.
6 simple tips to get a 1.75% mortgage rate
Secure access to The Ascent’s free guide that reveals how to get the lowest mortgage rate on your new home purchase or when 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 3.304%, down 0.006% from Friday’s average of 3.310%. A mortgage at the current average interest rate would cost you $ 438 for every $ 100,000 you borrow. Over the life of the loan, your total interest charges would be $ 57,743 for every $ 100,000 borrowed.
20-year mortgage rates
The 20-year average mortgage rate today stands at 3.010%, up 0.042% from Friday’s average of 2.968%. If you borrow at today’s average rate, you would have a monthly principal and interest payment of $ 555 per $ 100,000 borrowed. For every $ 100,000 you borrow at today’s average rate, the total interest charge would be $ 33,224.
Over time, this loan is less expensive than the 30 year loan due to the lower interest rate and the reduced time to pay the interest charges. But since the repayment time is shorter, each monthly payment is higher with the 20-year loan than with the 30-year loan since you do not make as many payments.
15-year mortgage rates
The 15-year average mortgage rate today stands at 2.541%, down 0.009% from Friday’s average of 2.550%. You would consider a principal and interest payment of $ 669 for every $ 100,000 borrowed at today’s average rate. Interest expense would total $ 20,370 per $ 100,000 of mortgage debt over the term of the loan.
As you can see, this loan is the cheapest of the fixed rate options over time but has the highest monthly payments. The very short repayment term explains both the low total costs and the high monthly expenses associated with a 15-year loan.
The average 5/1 ARM rate is 2.826%, down 0.174% from Friday’s 3,000% average. After five years, this rate begins to adjust. It is likely to rise, as rates currently remain relatively low based on historical standards. You should know that you are taking a risk if you choose this loan because the rising rates will increase your monthly payments and your total costs.
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 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 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.