On Saturday, January 16, 2021, according to Bankrate’s latest survey of the nation’s largest mortgage lenders, the average 20-year fixed mortgage rate is 2.780% with an APR of 3.100%. The average 20-year fixed refinance rate is 2.870% with an APR of 3.140%.
The table below brings together a comprehensive national survey of mortgage lenders to help you know what are the most competitive 20-year mortgage rates. This interest rate table is updated daily to give you the most current rates when choosing a 20-year fixed mortgage loan.
|30-Year Fixed VA||3.130%||3.400%|
|30-Year Fixed FHA||2.640%||3.510%|
|30-Year Fixed-Rate Jumbo||2.930%||3.050%|
|15-Year Fixed Jumbo||2.400%||2.460%|
|7/1 ARM Jumbo||2.990%||3.840%|
|5/1 ARM Jumbo||2.980%||3.930%|
Rates as of Saturday, January 16, 2021 at 6:30 AM
Bankrate has been the authority in personal finance since it was founded in 1976 as the “Bank Rate Monitor,” a print publication for the banking industry. Bankrate has been surveying and collecting mortgage rate information from the nation’s largest lenders for more than 30 years. Hundreds of top publications, such as The New York Times, Wall Street Journal, CNBC and others, depend on Bankrate as a trusted source of financial information, so you know you’re getting information you can trust.
Lenders nationwide provide weekday mortgage rates to our comprehensive national survey to bring you the most current rates available. Here you can see the latest marketplace average rates for a wide variety of purchase loans. The interest rate table below is updated daily to give you the most current purchase rates when choosing a home loan. APRs and rates are based on no existing relationship or automatic payments. For these averages, the customer profile includes a 740 FICO score and a single family residence. To learn more, see understanding Bankrate rate averages.
A 20-year fixed-rate mortgage is a loan where your balance is paid off over 20 years at a fixed interest rate.
The 20-year mortgage is often overlooked by borrowers and lenders, but this unusual loan term comes with a distinct advantage. Compared to the more popular 30-year mortgage, a 20-year loan lets the homeowner shave a decade off the term — and save significantly on interest payments over the life of the mortgage. A 20-year mortgage is a middle ground between the longer, standard term and other short-term options like the popular15-year mortgage or the more aggressive 10-year mortgage.
“A 20-year-fixed is likely [good] for someone who is refinancing for a lower rate and doesn’t want to extend their term back to 30 years. This way, if they are five to 10 years into payments on their current mortgage, they can continue making payments with the hopes of paying off the loan within their target time period,” says David Reiling, CEO of Sunrise Banks, based in Saint Paul, Minnesota. “In a purchase situation, if a client has a goal of paying off their home in less than 30 years, a 20-year fixed is a good alternative that offers lower monthly payments, [as opposed to] a 15-year mortgage.”
To determine if a 20-year mortgage is right for you, do the math using the Bankrate Mortgage Calculator. Get the latest interest rates for 20-year fixed-rate mortgages above. Be sure to check back regularly, as rates do change.
While much depends on the individual mortgage terms, in general, 20-year mortgages have a “shorter term than the traditional 30-year mortgage— which means a faster payoff — and a lower rate than the 30-year option,” Reiling says. He adds that it’s important to carefully consider your household income and whether the monthly payments — including any additional expenses like HOA dues, homeowner’s insurance, property taxes and fees — fit comfortably into your budget.
Though you’ll pay off the mortgage at a faster clip than with a longer term, the payments should be more manageable than an even shorter mortgage. A 10-year term, for example, would require a much higher monthly payment than a 20-year mortgage -- even though the shorter-term loan would cost less in interest over time.
Here’s how monthly payments for principal and interest would compare for a $300,000 mortgage:
|Loan Type||Interest Rate||Total Cost||Monthly Payment||Total Interest Paid|
If you’re choosing between a 30-year mortgage and a 20-year mortgage, the most significant disadvantage to a 20-year is that the monthly payments will be higher. “With a higher payment, you may need to opt for a more modest house than you would with a 30-year term,” Reiling notes.
On the other hand, if you’re deciding between a 10-year, 15-year mortgage or 20-year mortgage, the drawback of the 20-year is that you’ll pay interest on the loan for either five or 10 more years. However, if you choose a 20-year mortgage with no early repayment penalty (which most mortgages don't have), you could choose to pay the mortgage off even faster, either with additional principal payments each month or with a lump sum to close the mortgage out early.
The point is, the choice of paying more each month is yours with a longer-term loan. But if you lock yourself into a 10-, 15- or 20-year mortgage, you must pay the agreed amount each month. There’s generally no provision to send less money when your budget is tight, although if you find yourself in particularly dire financial straits, you can talk to your lender about forbearance options.
The costs and fees with a 20-year mortgage are similar to those of mortgages with other repayment terms. Expect to pay an average of about 2 to 4 percent of the loan’s principal amount at closing in fees, including origination fees and third-party costs like title insurance. It’s possible to wrap these fees into the loan, but doing so will cost you in the long run because you'll wind up paying more in interest.
Once you’ve settled on the length of the mortgage, it’s time to do your research to find the best mortgage for you (see these five kinds of mortgages to consider). This due diligence will mean comparing mortgage rates from several lenders, which might include mortgage brokers, traditional banks and online lenders. It’s smart to prepare for your mortgage search by reviewing your credit report to confirm it’s correct and evaluating your financial landscape to determine how much you can afford to put toward a home each month. “The key is to make sure the client is comfortable with their budget and payment,” says Reiling.
While there is no official “best season” to shop for a mortgage since rates are driven by the market and overall economic landscape, Reiling says, “Banks are much more competitive on rates when business is slow, which tends to be in the dead of winter around January or February.”
|Loan Type||Purchase Rates||Refinance Rates|
|The table above links out to loan-specific content to help you learn more about rates by loan type.|
|30-Year Loan||30-Year Mortgage Rates||30-Year Refinance Rates|
|20-Year Loan||20-Year Mortgage Rates||20-Year Refinance Rates|
|15-Year Loan||15-Year Mortgage Rates||15-Year Refinance Rates|
|10-Year Loan||10-Year Mortgage Rates||10-Year Refinance Rates|
|FHA Loan||FHA Mortgage Rates||FHA Refinance Rates|
|30-Year FHA Loan||30-Year FHA Loan Rates||30-Year FHA Refinance Rates|
|VA Loan||VA Mortgage Rates||VA Refinance Rates|
|ARM Loan||ARM Mortgage Rates||ARM Refinance Rates|
|5/1 ARM||5/1 ARM Rates||5/1 Refinance Rates|
|7/1 ARM||7/1 ARM Rates||7/1 Refinance Rates|
|10/1 ARM||10/1 ARM Rates||10/1 Refinance Rates|
|Jumbo Loan||Jumbo Mortgage Rates||Jumbo Refinance Rates|
|30-Year Jumbo Loan||30-Year Jumbo Loan Rates||30-Year Jumbo Refinance Rates|