Today's Mortgage Rates -- December 29, 2020: Rates Remain Competitive Late in the Month

Mortgage rates are very competitive today. Should you apply?

Mortgage rates are still attractive as 2020 winds to a close. This is what rates look like today:

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

30-year mortgage rates

The average 30-year mortgage rate today is 2.785%, up 0.003% from yesterday. At today's rate, you'll pay principal and interest of $410.04 for every $100,000 you borrow. That doesn't include added expenses like property taxes and homeowners insurance premiums.

20-year mortgage rates

The average 20-year mortgage rate today is 2.668%, up 0.053% from yesterday. At today's rate, you'll pay principal and interest of $537.93 for every $100,000 you borrow. Though your monthly payment will go up by $127.89 with a 20-year, $100,000 loan versus a 30-year loan of the same amount, you'll save $18,514.00 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 2.200%, down 0.005% 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 $242.53 higher per $100,000 in mortgage principal. Your interest savings, however, will amount to $30,153.50 over the life of your repayment period per $100,000 of mortgage debt.

5/1 ARMs

The average 5/1 ARM rate is 3.328%, up 0.013% from yesterday. An adjustable-rate mortgage makes little sense right now because you can get a lower rate with a fixed mortgage. And that way, you're locking in the same rate over time and don't have to worry about your rate adjusting upward every year beyond that initial five-year period.

Should I lock in 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 competitive. 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 loan if rates fall before you close on your mortgage, and while today's rates are still nice and 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're ready to get a mortgage, reach out to at least a few different lenders to see what rates you're eligible for and what closing costs they want to charge you. You can also try negotiating those fees with a lender that offers you a competitive rate to begin with. Your goal should be to snag the most affordable mortgage possible, and that includes keeping your closing costs to a minimum.