Several key mortgage rates dropped today. The average rates on 30-year fixed and 15-year fixed mortgages both tapered off. The average rate on 5/1 adjustable-rate mortgages, or ARMs, the most popular type of variable rate mortgage, also declined.
Mortgage rates change daily, but, overall, they are very low by historical standards. If you’re in the market for a mortgage, it could make sense to go ahead and lock if you see a rate you like. Just make sure you shop around first.
30-year fixed mortgages
The average rate for a 30-year fixed mortgage is 4.27 percent, down 3 basis points over the last seven days. A month ago, the average rate on a 30-year fixed mortgage was higher, at 4.35 percent.
At the current average rate, you’ll pay principal and interest of $493.11 for every $100,000 you borrow. That represents a decline of $1.76 over what it would have been last week.
You can use Bankrate’s mortgage calculator to estimate your monthly payments and see how much you’ll save by adding extra payments. It will also help you calculate how much interest you’ll pay over the life of the loan.
15-year fixed mortgages
The average 15-year fixed-mortgage rate is 3.69 percent, down 3 basis points from a week ago.
Monthly payments on a 15-year fixed mortgage at that rate will cost around $724 per $100,000 borrowed. That may squeeze your monthly budget than a 30-year mortgage would, but it comes with some big advantages: You’ll save thousands of dollars over the life of the loan in total interest paid and build equity much more quickly.
The average rate on a 5/1 ARM is 3.98 percent, falling 7 basis points over the last week.
These types of loans are best for those who expect to sell or refinance before the first or second adjustment. Rates could be substantially higher when the loan first adjusts, and thereafter.
Monthly payments on a 5/1 ARM at 3.98 percent would cost about $476 for each $100,000 borrowed over the initial five years, but could increase by hundreds of dollars afterward, depending on the loan’s terms.