Best Mortgage Rates in 2020

Best Mortgage Rates in 2020

Once you’ve made the important decision to buy a home, it’s time to shop around for the best mortgage rates. Mortgage rates will vary depending on several factors, with the most obvious being the lending company where you choose to borrow.

There is an ever-increasing number of lenders where to borrow a mortgage. Banking institutions are popular choices because most people have brick-and-mortar branches nearby and may also have accounts open with them already. 

After learning about what mortgage rates are as well as the different types, continue reading to see a comparison of best mortgage rates from US Bank, Bank of America and Wells Fargo.

What are mortgage rates?

A mortgage rate is the amount of interest paid on a mortgage loan. These are determined by the lender and are also affected by the credit profile. Borrower’s down payment is a significant factor as well. Other factors, like the state in which you’re borrowing from, or the general condition of the economy, can also change mortgage rates.

Similar to other types of loans, mortgage rate estimates include the interest as well as the annual percentage rate (APR). The APR includes other factors along with the interest rate to paint a broader picture of the long-term costs of loans. Lenders will often display both metrics when calculating rates.

Fixed-Rate vs. ARM

When researching mortgage rates, homebuyers are usually presented with two types of mortgage rates. One is referred to as a fixed-rate mortgage. Put simply; a fixed-rate mortgage is a rate that will not change for the entirety of your loan term. These types of rates are usually higher than what is known as an adjustable-rate mortgage (ARM).

Conversely, an ARM is a rate that is subject to change at some point during the term agreement. Often there will be a grace period before the rate changes. As a result, ARMs usually start lower than fixed-rate mortgages but can end up becoming higher. ARMs may either decrease or regularly increase, depending on certain factors. Most lenders will put a cap on how high an ARM can get, so make sure to ask about the ARM cap when consulting.

Note: ARMs will sometimes be denoted as “5/1,” “7/1,” “10/1,” etc. The first number shows how long the fixed-rate portion of the interest charges will last. For example, 5/1 means that the first five years of the loan will have a fixed-rate, and then will change annually for the remainder of the loan term.

National Averages

Current mortgage rates are relatively low, with a reported average of 3.70% in 2020 so far. This is compared to the low average rate of 3.49% in the middle of 2019 and a high of 4.94% in late 2018. For another comparison, the average mortgage rate during the inflationary period between 1973 and 1974 was over 7%!

Comparing Best Mortgage Rates

Below is a summary of the best mortgage rates from three well-known lenders. Keep in mind that these rates may vary depending on location, credit score, and loan amount:

US Bank Mortgage Rates

30-year fixed: 3.750% Interest; 3.821% APR

20-year fixed: 3.500% Interest; 3.597% APR

10-year ARM: 3.750% Interest; 4.149% APR

5-year ARM: 3.875% Interest; 4.500% APR

US Bank mortgage rates are around the national average for 2020. They also offer government-backed loans and loans for borrowers that need a substantially larger amount, otherwise known as jumbo loans. 

Additional benefits include their digital amenities such as a smartphone app and digital applications, which are meant to expedite the borrowing process.

Bank of America Mortage Rates

30-year fixed: 3.625% Interest; 3.817% APR

20-year fixed: 3.375% Interest; 3.634% APR

15-year fixed: 2.875% Interest; 3.211% APR

10/1 ARM: 3.125% Interest; 3.760% APR

7/1 ARM: 3.125% Interest; 3.901% APR

5/1 ARM: 2.875% Interest; 3.946% APR

Being one of the biggest and most well-known banking institutions out there, Bank of America is well-equipped to help borrowers pull out loans in the most modern way possible. The entire loan approval can be facilitated digitally through their native smartphone app. After being approved, the whole underwriting and document uploading process can be done through the smartphone app. 

Bank of America also offers government-backed loans, jumbo loans, and special benefits for existing customers. And as the above numbers show, Bank of America mortgage rates are much lower than the national average for 2020.

You can use the mortgage rate calculator on Bank of America’s website to generate a personalized estimate of your rate based on credit score, location, and loan amount.

Wells Fargo Mortgage Rates

30-year fixed: 3.750% Interest; 3.834% APR

20-year fixed: 3.490% Interest; 3.635% APR

15-year fixed: 3.000% Interest; 3.148% APR

7/1 ARM: 3.125% Interest; 3.835% APR

5/1 ARM: 3.125% Interest; 3.951% APR

Wells Fargo mortgage rates are competitive and are just below the national average for 2020. Not only that, but they have some of the lowest down-payment requirements starting at just 3%. They also have educational programs dedicated to assisting first-time homebuyers every step of the way. 

On par with other large banking institutions, Wells Fargo offers a variety of loan types, including government-backed FHA and VA loans, jumbo loans, and programs for large companies. Despite recent setbacks and controversies, Wells Fargo remains one of the best banks for acquiring mortgage loans.


Again, it’s important to note that mortgage rates are ever-changing and will vary depending on location, credit profile, and loan amount. Taking a look at the average mortgage rates during any period of time will let you know whether a company is charging competitive rates or not. 

When comparing and looking for the best mortgage rates at the largest banking institutions, it’s smart to compare their rates to the national average. Between the three banks listed above, Bank of America appears to have the lowest mortgage rates and most extensive borrower benefits. However, the best company to borrow from might depend on personal circumstances.

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