Current mortgage rates – January 7, 2020: rates remain attractive
Mortgage rates remain at competitive levels. Here’s what they look like today:
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30-year mortgage rates
The 30-year average mortgage rate today stands at 2.761%, up 0.004% from yesterday. At today’s rate, you’ll pay principal and interest of $ 408.77 for every $ 100,000 you borrow. This does not include additional expenses like property taxes and home insurance premiums.
20-year mortgage rates
The 20-year average mortgage rate today stands at 2.576%, down 0.044% from yesterday. At today’s rate, you’ll pay principal and interest of $ 533.81 for every $ 100,000 you borrow. Although your monthly payment increases by $ 125.04 with a loan of $ 100,000 over 20 years compared to a loan of the same amount over 30 years, you will save $ 19,043.62 in interest over your repayment period for every $ 100,000 you borrow.
15-year mortgage rates
The 15-year average mortgage rate today stands at 2.192%, up 0.001% from yesterday. At today’s rate, you’ll pay principal and interest of $ 652.57 for every $ 100,000 you borrow. Compared to the 30-year loan, your monthly payment will be $ 243.80 higher for every $ 100,000 of mortgage principal. However, your interest savings will amount to $ 29,694.30 over the duration of your repayment period per $ 100,000 of mortgage debt.
The average 5/1 ARM rate is 3.451%, down 0.030% from yesterday. With an ARM 5/1, you lock in your initial interest rate for only five years, which means your rate can go up or down over time depending on market conditions. A variable rate mortgage can be a good deal when you get a lower interest rate than a fixed loan. But given today’s fixed loan rates, an ARM doesn’t make sense.
Should I lock in my mortgage rate now?
A mortgage rate freeze guarantees you a specific interest rate for a certain period of time – typically 30 days, but you may be able to guarantee your rate for up to 60 days. You’ll usually pay a fee to lock in your mortgage rate, but that way you’re protected if rates go up by the time 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 still insanely low. 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 loan if rates drop before your mortgage closes, and while rates today are quite competitive, we don’t know if rates will go up. or will decrease over the next few months. As such, it is beneficial to:
- LOCK if closing 7 days
- LOCK if the closure 15 days
- LOCK if the closure 30 days
- FLOAT if the closure 45 days
- FLOAT if the closure 60 days
If you are ready to apply for a mortgage, contact different lenders to see what rates you qualify for and what closing costs you will need to pay to finalize your loan. Keep in mind that factors like your credit score and debt-to-income ratio will help you determine what rates you qualify for. If you are not happy with the offers you receive, you can increase your credit and pay off some existing debt to become a more attractive loan candidate and get a better deal.