Today's Mortgage Rates -- January 4, 2021: Rates See Little Change

Mortgage rates remain competitive on Jan. 4. Find out more about today's average rates.

On Jan. 4, average mortgage rates were relatively stable, with some ticking slightly up or down and the 30-year rate remaining unchanged since Friday. Interest rates on fixed-rate loans are still near record lows, so those considering purchasing a home should consider shopping for a home loan now and exploring the possibility of locking in their rate.

Here's what you need to know about average rates today.

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

30-year mortgage rates

The average 30-year mortgage rate today is 2.765%, unchanged from Friday's average of 2.765%. For each $100,000 borrowed at today's average rate, your monthly principal and interest payment would add up to $409. This doesn't include property taxes and insurance. Total interest costs would add up to $47,253 per $100,000 borrowed over the life of the loan.

20-year mortgage rates

The average 20-year mortgage rate today is 2.699%, down 0.001% from Friday's average of 2.700%. At today's average rate, the monthly principal and interest payment would add up to $540 per $100,000 in mortgage debt. Borrowing at today's average rate would leave you with total interest costs of $29,516 per $100,000 in mortgage debt.

Your total interest costs are much lower on the 20-year loan than the 30-year loan even though the difference in interest rates is negligible. That's because you're paying interest for a decade less time. Of course, monthly payments are much higher since you're making so many fewer payments to get your debt paid off.

15-year mortgage rates

The average 15-year mortgage rate today is 2.206%, up 0.003% from Friday's average of 2.203%. You'd be looking at a principal and interest payment of $653 per $100,000 borrowed at today's average rate. Over the life of the loan, your total interest costs would add up to $17,547 per $100,000 borrowed.

The average interest rate on the 15-year loan is well below the average rate on the 20-year or 30-year option. However, monthly payments are still much higher for this loan since you're paying it off so much faster. Of course, as you can see, the total interest savings is considerable.

5/1 ARMs

The average 5/1 ARM rate is 3.088%, down 0.055% from Friday's average of 3.143%. ARMs, or adjustable-rate mortgages, can be a good loan option in situations where you get a lower starting rate and you are confident you're going to refinance or move before rates begin adjusting upward. Right now, you can secure a 30-year fixed-rate mortgage for a lower rate than the 5/1 ARM is offering and you won't have to worry about your rate changing. As a result, the fixed-rate loan option is a better choice.

Should I lock my mortgage rate now?

A mortgage rate lock guarantees you a certain interest rate for a specified 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 in case rates climb between now and when you actually close on your mortgage.

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 so 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 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

To find out what rates are available to you, compare rates from at least three of the best mortgage lenders before locking in.