Several benchmark mortgage rates decreased today. The average rates on 30-year fixed and 15-year fixed mortgages both receded. On the variable-mortgage side, the average rate on 5/1 adjustable-rate mortgages, or ARMs, also dropped.
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30-year fixed mortgages
The average 30-year fixed-mortgage rate is 3.99 percent, down 9 basis points from a week ago. 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 a combined $476.84 per month in principal and interest for every $100,000 you borrow. That’s $5.20 lower, compared with last week.
You can use Bankrate’s mortgage calculator to get a handle on what your monthly payments would be 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 3.14 percent, down 10 basis points over the last seven days.
Monthly payments on a 15-year fixed mortgage at that rate will cost around $697 per $100,000 borrowed. That may put more pressure on your monthly budget than a 30-year mortgage would, but it comes with some big advantages: You’ll save thousands of dollars over the life of the loan in total interest paid and build equity much faster.
The average rate on a 5/1 ARM is 3.34 percent, falling 5 basis points over the last seven days.
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 3.34 percent would cost about $440 for each $100,000 borrowed over the initial five years, but could ratchet higher by hundreds of dollars 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.
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Last updated: 1/11/2017
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.”