Lowered rates for most of the loans
Average mortgage rates were down a bit on most loans at the end of the week. Most people need to take out loans to buy a home. If you are considering buying a property, understanding how mortgage rates are going is helpful.
This is what the average mortgage rates look like for April 9, 2021:
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30 year mortgage interest
The average 30-year mortgage rate today is 3.283%, 0.008% less than yesterday’s average of 3.291%. At today’s average rate, you would borrow $ 437 per month in principal and interest per $ 100,000. Over the life of the loan, your total interest cost would be $ 57,327 per $ 100,000.
20 year mortgage interest
The average 20-year mortgage rate is 2.987% today, unchanged from yesterday’s average. At today’s average rate, the monthly principal and interest payment would add up to $ 554 per $ 100,000 in mortgage debt. Over the life of the loan, you would pay a total of $ 32,947 in interest cost per $ 100,000 loan amount borrowed.
You will find that the interest cost on this loan is lower over time than the 30 year loan, but each monthly payment is higher. If you’ve been making payments for a decade less, that’s the result.
Mortgage rates for 15 years
The average 15-year mortgage rate is 2.539% today, down 0.008% from yesterday’s average of 2.547%. For every $ 100,000 borrowed at today’s average interest rate, your monthly principal and interest payments would total $ 669. The total interest cost is $ 20,353 for every $ 100,000 borrowed at today’s average interest rate.
A 15 year mortgage cuts the repayment time in half compared to a 30 year loan. Shortening the payout period by so much explains why the interest cost is so much lower over time, but the monthly payment is so much higher.
The average 5/1 ARM rate is 2.874%, 0.06% less than yesterday’s average of 2.934%. You only have this rate for the first five years, after which it can move up or down along with a financial index to which it is tied. This is in contrast to a fixed rate loan, the interest rate of which never changes. Since your interest rate could move upwards after five years, causing your monthly mortgage payment to go up, ARMs are risky. Take this risk into account, even though the starting rate is currently below the 30-year rate.
Should I lock my mortgage rate now?
A mortgage lock guarantees you a specific interest rate for a specific period of time – usually 30 days, but you may be able to secure your interest rate for up to 60 days. You generally pay a fee to fix your mortgage interest rate, but that way you are protected in the event that interest rates rise between now and when you actually close your mortgage.
If you plan to close your home within the next 30 days, it pays to fix your mortgage rate based on today’s rates – especially since they are still pretty competitive. However, if your graduation is more than 30 days away, you may want to choose a floating rate lock instead, for a typically higher fee, but which can save you money in the long run. With a floating rate lock, you can secure a lower rate on your mortgage if rates fall before you close, and while rates are still quite low today, we don’t know if rates will go up or down in the next few months. So it’s worth it:
- LOCK when close in 7th Days
- LOCK when close in fifteen Days
- LOCK when close in 30th Days
- HOVER when close in 45 Days
- HOVER when close in 60 Days
To find out what rates are available to you, compare rates from at least three of the best mortgage lenders before you log on.