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Today's Mortgage Rates -- February 22, 2021: Rates Up on Fixed-Rate Loans

The Motley Fool logo The Motley Fool 2 days ago Christy Bieber
Person typing on calculator and using laptop while small model home sits nearby. © Getty Images Person typing on calculator and using laptop while small model home sits nearby.

As we move towards the end of February, average mortgage rates went up a bit today for fixed-rate loans. Although still near historic lows, rates have been trending up recently. Borrowers may wish to consider locking in their loan while interest rates remain competitive. Here's what you need to know about average mortgage rates on Feb. 22, 2021.

Mortgage Type Today's Interest Rate
30-year fixed mortgage 2.955%
20-year fixed mortgage 2.681%
15-year fixed mortgage 2.305%
5/1 ARM 2.808%

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

30-year mortgage rates

The average 30-year mortgage rate today is 2.955%, up 0.031% from Friday's average of 2.924%. A loan at today's average rate would cost you $419 per month in principal and interest for each $100,000 you borrow. You'd also have to pay for insurance and property taxes. Total interest costs would add up to $50,905 per $100,000 borrowed over the life of the loan.

20-year mortgage rates

The average 20-year mortgage rate today is 2.681%, up 0.026% from Friday's average of 2.655%. If you borrow at today's average rate, your monthly principal and interest payment would be $539 per $100,000 borrowed. Your total interest costs over the life of the loan would equal $29,304 per $100,000 borrowed.

When you shorten your repayment timeline by a decade compared with the 30-year loan, you will need to commit to higher monthly payments. Of course, since you pay interest for 10 fewer years, you can see that the total interest costs are considerably lower. This means your mortgage costs you less over time, although you must be prepared for higher payments during your 20-year payoff timeline.

15-year mortgage rates

The average 15-year mortgage rate today is 2.305%, up 0.009% from Friday's average of 2.296%. If you borrow at today's average rate, you'd have a monthly principal and interest payment of $658 per $100,000 borrowed. During your entire loan repayment period, you'd pay total interest costs of $18,377 per $100,000 borrowed.

With an even shorter timeline for payment, monthly costs are higher with the 15-year loan than with the 20-year or 30-year alternative. The amount of total interest you save over time is considerable, though, so you may find opting for these higher payments to be well worth it if you can find them in your budget.

5/1 ARMs

The average 5/1 ARM rate is 2.808%, down 0.057% from Friday's average of 2.865%. This initial starting rate is only locked in for the first five years with an adjustable-rate mortgage. After that, it could adjust begin to adjust once annually, either upward or downward.

In recent months, the starting rate on the 5/1 ARM has been above the rate on fixed-rate alternatives. While this is no longer the case, there's not enough of a difference in the initial rates to take a chance of your interest cost rising over time. That's especially true since rates will almost definitely increase once they begin adjusting as they're still so close to record lows right now.

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.

The Motley Fool owns and recommends MasterCard and Visa, and recommends American Express. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team. The Motley Fool has a Disclosure Policy. The Author and/or The Motley Fool may have an interest in companies mentioned. SPONSORED:

A historic opportunity to potentially save thousands on your mortgage

Chances are, interest rates won't stay put at multi-decade lows for much longer. That's why taking action today is crucial, whether you're wanting to refinance and cut your mortgage payment or you're ready to pull the trigger on a new home purchase. 

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