Several key mortgage rates decreased today. The average rates on 30-year fixed and 15-year fixed mortgages both declined. The average rate on 5/1 adjustable-rate mortgages, or ARMs, the most popular type of variable rate mortgage, also decreased.
RATE SEARCH: Compare mortgage rates in your area now.
30-year fixed mortgages
The average 30-year fixed-mortgage rate is 4 percent, down 5 basis points over the last week. A month ago, the average rate on a 30-year fixed mortgage was lower, at 3.98 percent.
At the current average rate, you’ll pay principal and interest of $477.42 for every $100,000 you borrow. That’s a decline of $2.88 from last week.
You can use Bankrate’s mortgage calculator to estimate your monthly payments and see the effect of 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 3.15 percent, down 8 basis points since the same time last week.
Monthly payments on a 15-year fixed mortgage at that rate will cost around $698 per $100,000 borrowed. The bigger payment may be a little harder to find room for in your monthly budget than a 30-year mortgage payment would, but it comes with some big advantages: You’ll come out several thousand dollars ahead over the life of the loan in total interest paid and build equity much more rapidly.
The average rate on a 5/1 ARM is 3.28 percent, falling 11 basis points from a week ago.
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 3.28 percent would cost about $437 for each $100,000 borrowed over the initial five years, but could climb hundreds of dollars higher afterward, depending on the loan’s terms.
Where rates are headed
To see where Bankrate’s panel of experts expect rates to go from here, check out our Rate Trend Index.
RATE SEARCH: Want to see where rates are right now? See local mortgage rates.
Last updated: 1/10/2017
Methodology: The rates you see above are Bankrate.com Site Averages. These calculations are run after the close of the previous business day and include rates and/or yields we have collected that day for a specific banking product. Bankrate.com site averages tend to be volatile — they help consumers see the movement of rates day to day. The institutions included in the “Bankrate.com Site Average” tables will be different from one day to the next, depending on which institutions’ rates we gather on a particular day for presentation on the site.
To learn more about the different rate averages Bankrate publishes, see “Understanding Bankrate’s Rate Averages.”