Mortgage rates are down today, giving borrowers an opportunity to reap some savings on a home loan. Here’s what they look like on May 27, 2021:
Data source: The Ascent’s national mortgage interest rate tracking.
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30-year mortgage rates
The average 30-year mortgage rate today is 3.137%, down 0.018% from yesterday. At today’s rate, you’ll pay principal and interest of $429.00 for every $100,000 you borrow. That doesn’t include added expenses like property taxes and homeowners insurance premiums.
20-year mortgage rates
The average 20-year mortgage rate today is 2.895%, down 0.020% from yesterday. At today’s rate, you’ll pay principal and interest of $549.00 for every $100,000 you borrow. Though your monthly payment will go up by $120.00 with a 20-year, $100,000 loan versus a 30-year loan of the same amount, you’ll save $22,542.00 in interest over the course of your repayment period for every $100,000 you borrow.
15-year mortgage rates
The average 15-year mortgage rate today is 2.401%, down 0.020% from yesterday. At today’s rate, you’ll pay principal and interest of $662.00 for every $100,000 you borrow. Compared to the 30-year loan, your monthly payment will be $233.00 higher per $100,000 in mortgage principal. Your interest savings, however, will amount to $35,174.00 over the life of your repayment period per $100,000 of mortgage debt.
The average 5/1 ARM rate is 2.913%, down 0.029% from yesterday. With a 5/1 ARM, the rate you lock in will stay in place for five years, but then it will adjust once a year, either upward or downward. There’s risk involved in getting an adjustable-rate mortgage despite the potential savings involved. As such, you may want to choose a fixed-rate mortgage, even if it means locking in a slightly higher rate.
Should I lock in my mortgage rate now?
A mortgage rate lock guarantees you a specific interest rate for a certain 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 if rates climb between now and when you close on your home loan.
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 very attractive, historically speaking. 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 loan if rates fall before you close on your mortgage. While today’s rates are pretty 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
If you’re ready to apply for a mortgage, make sure to reach out to a few different mortgage lenders to see what offers they make you. You may find that one lender is more competitive with regard to your loan’s interest rate while another offers lower closing costs. You’ll need to weigh your options to make sure you end up happy with the offer you accept.
View more information: https://www.fool.com/the-ascent/mortgages/articles/current-mortgage-rates-may-27-2021-rates-are-lower/