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Current Mortgages -- October 20, 2020: Rates Holding at Record Lows

Large, two story home with Today's Mortgage Rates graphic.

Image source: Getty Images.

Mortgage rates are holding steady at record lows, with both the 30- and 20-year loan coming in at well under 3% and the 15-year loan at well under 2.5%. This is what today's rates are averaging:

Mortgage Type

Today's Interest Rate

30-year fixed mortgage

2.877%

20-year fixed mortgage

2.709%

15-year fixed mortgage

2.387%

5/1 ARM

3.220%

Data source: The Ascent's national mortgage interest rate tracking.

30-year mortgage rates

The average 30-year mortgage rate today is 2.877%, down 0.007% from yesterday. At today's rate, you'll pay principal and interest of $415.16 for every $100,000 you borrow. That doesn't include added expenses like property taxes and homeowners insurance premiums.

Check out The Ascent's mortgage calculator to see what your monthly payment might be and how much your loan will ultimately cost. Also learn how much money you'd save by snagging a lower interest rate, making a larger down payment, or choosing a shorter loan term.

20-year mortgage rates

The average 20-year mortgage rate today is 2.709%, down 0.02% from yesterday. At today's rate, you'll pay principal and interest of $540.29 for every $100,000 you borrow. Though your monthly payment will go up by $125.13 with a 20-year, $100,000 loan versus a 30-year loan of the same amount, you'll save $19,787.53 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 2.387%, up 0.005% from yesterday. At today's rate, you'll pay principal and interest of $661.53 for every $100,000 you borrow. Compared to the 30-year loan, your monthly payment will be $246.37 higher per $100,000 in mortgage principal. Your interest savings, however, will amount to $30,382.17 over the life of your repayment period per $100,000 of mortgage debt.

5/1 ARMs

The average 5/1 ARM rate is 3.220%, up 0.005% from yesterday. With a 5/1 ARM, you're guaranteed your initial interest rate for a five-year period. From there, your rate will increase once a year -- either upward or downward, depending on market conditions. An ARM makes sense when you can score a discount on your interest rate and enjoy it for your first five years of payments. Since that's not the case right now, with the 30-year mortgage being available at a lower rate, an ARM is not the most economical choice at present.

Should I lock 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 still very low. 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

If you think the time is right to get a mortgage, be sure to shop around with different lenders rather than accept the first offer you receive. And also, be sure to compare closing costs. It could be that two lenders offer you a comparable rate, only one charges much lower fees to finalize your loan. If that's the case, you might as well enjoy all of the savings you can.

Methodology

The Ascent team partners with market-leading data provider Optimal Blue to track the seven-day average of daily mortgage rates that actual borrowers are locking in nationwide. Learn more about our mortgage rates tracking methodology.

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