Rates Down Slightly for Most Loans

Mortgage rates have been moving up. Has that trend continued?

On Feb. 21, 2022, average mortgage rates declined a bit for most loans, except the 15-year fixed-rate mortgage. Despite a slight decline today, rates have been trending up recently. But the good news is, by historical standards, home loans remain affordable.

Check out today’s average mortgage rates for fixed and adjustable-rate loans to see how much the typical borrower would pay for a home loan now:

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30-year mortgage rates

The average 30-year mortgage rate today is 4.151%, down 0.001% from Friday’s average of 4.152%. A loan at today’s average rate would come with a monthly principal and interest payment of $486 per $100,000 borrowed. Over the life of the loan, your total interest costs would add up to $75,018 per $100,000 borrowed.

20-year mortgage rates

The average 20-year mortgage rate today is 3.788%, down 0.003% from Friday’s average of 3.791%. If you borrow at today’s average rate, your monthly principal and interest payment would be $595 per $100,000 borrowed. Your total interest costs over the life of the loan would equal $42,768 per $100,000 borrowed.

With its shorter payoff time, a 20-year mortgage will cost less over the life of the loan than a 30-year mortgage. The lower interest rate also helps to reduce its costs. But since you make payments for a decade less time, each monthly payment must be higher.

15-year mortgage rates

The average 15-year mortgage rate today is 3.355%, up 0.01% from Friday’s average of 3.345%. For each $100,000 borrowed at today’s average rate, your monthly principal and interest payment would add up to $708. You’d be looking at total interest costs of $27,401 per $100,000 in mortgage debt over the life of the loan.

This loan comes with very high monthly payments due to its short payoff time. But it is cheaper over time than either the 30-year or 20-year loan because its low rate and the limited time you pay interest significantly reduce the cost of borrowing. It’s important to weigh the tradeoff between low monthly payments and high total loan costs and vice versa.

5/1 ARMs

The average 5/1 ARM rate is 3.312%, down 0.015% from Friday’s average of 3.327%. Because this is an adjustable-rate mortgage, your loan rate will be locked in just for the first five years. It can go up after that, leaving you with a loan that costs more every month and over time.

Should I lock my mortgage rate now?

A mortgage rate lock guarantees you a certain interest rate for a specified 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 in case rates climb between now and when you actually close on your mortgage.

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 still relatively competitive. 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 mortgage if rates fall prior to your closing, and while today’s rates are still quite 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

To find out what rates are available to you, compare rates from at least three of the best mortgage lenders before locking in.