Mortgage rates were higher at the end of the week than at the start, with the average 30-year fixed-rate purchase loan rate rising to 3.256%. Mortgage refinancing rates are also higher, with the 30-year rate standing at 3.386%.
Even so, the rates remain very attractive and borrowers with good credit should be able to secure favorable rates and comfortable monthly payments for a new mortgage or loan refinance.
- The last rate on a 30 year fixed rate mortgage is 3.256%.
- The last rate for a 15 year fixed rate mortgage is 2.348%.
- The latest rate on a Jumbo ARM 5/1 is 2.22%.
- The latest rate on a 7/1 compliant ARM is 4.067%.
- The latest rate on a 10/1 compliant ARM is 3.868%.
Money’s daily mortgage rates reflect what a borrower with a 20% down payment and a 700 credit score – roughly the national average – could pay if they applied for a home loan right now. Daily rates are based on the average rate of 8,000 lenders offered to applicants on the previous business day. Freddie Mac’s weekly rates will generally be lower, as they measure the rates offered to borrowers with a higher credit rating.
Current mortgage rates: 30-year fixed rate mortgage rates
- The 30-year rate is 3.256%.
- It’s a day infold by 0.042 percentage point. ??
- It’s a month infold by 0.005 percentage point. ??
Fixed rate loans are the choice of most home loan borrowers because of the predictable interest rates and regular monthly payments. The 30-year loan is the loan of choice for many because the long payback period means that monthly payments will be lower than shorter-term loans. The interest rate, on the other hand, tends to be higher on a 30-year loan, so you’ll pay more over the life of the loan.
Current mortgage rates: 15 years fixed rate mortgage rates
- The 15-year rate is 2.348%.
- It’s a day infold by 0.039 percentage point. ??
- It’s a month offold 0.008 percentage point. ??
A shorter term loan like a 15 year will have higher monthly payments compared to a 30 year mortgage of the same amount because the loan is paid off faster. The good news is that the interest rate tends to be lower, so you’ll save money by not having to pay so much interest.
Current mortgage rates: jumbo variable rate mortgage rates 5/1
- The ARM 5/1 rate is 2.22%.
- It’s a day infold by 0.024 percentage point. ??
- It’s a month infold by 0.052 percentage point. ??
Another type of loan is variable rate mortgages. The interest rate will be fixed initially but will then become variable, reset at regular intervals. The monthly payments will also be fixed initially, but will then change whenever the rate changes. For example, a 5/1 ARM will have a fixed rate for five years and then the rate will reset to market conditions on an annual basis. Other common terms include an ARM 7/1 and an ARM 10/1.
Current mortgage rates: VA, FHA and jumbo loan rates
The average rates for FHA, VA and jumbo loans are:
- The rate on a 30-year FHA mortgage is 2.979%. ??
- The rate for a 30-year VA mortgage is 2.983%. ??
- The rate for a 30-year jumbo mortgage is 3.381%. ??
Current mortgage refinancing rates
The average rates for 30-year, 15-year and 5/1 jumbo ARM loans are:
- The refinancing rate on a 30 year fixed rate refinance is 3.386%. ??
- The refinance rate on a 15 year fixed rate refinance is 2.462%. ??
- The refinance rate on a Jumbo ARM 5/1 is 2.497. ??
- The refinancing rate on a 7/1 compliant ARM is 4.508%. ??
- The refinancing rate on a 10/1 compliant ARM is 3.833%. ??
Where Are Mortgage Rates Going This Year?
Mortgage rates fell through 2020. Millions of homeowners responded to low mortgage rates by refinancing existing loans and taking out new ones. Many people have bought homes that they might not have been able to afford if the rates were higher.
In January 2021, rates briefly dropped to all-time low levels, but tended to rise throughout the month and into February.
Looking ahead, experts believe that interest rates will rise further in 2021, but modestly. Factors that could influence the rates include how quickly COVID-19 vaccines are distributed and when lawmakers can agree on another cost-effective relief package. More vaccinations and government stimulus could lead to improved economic conditions, which would increase rates.
Although mortgage rates are likely to rise this year, experts say the increase will not happen overnight and it will not be a dramatic jump. Rates are expected to stay near their historically low levels throughout the first half of the year, rising slightly later in the year. Even with rates rising, this will still be a good time to finance a new home or refinance a mortgage.
Factors that influence mortgage rates include:
- The Federal Reserve. The Fed took swift action when the pandemic hit the United States in March 2020. The Fed announced its intention to move money through the economy by lowering the Federal Fund’s short-term interest rate between 0% and 0.25%, which is as low as they go. The central bank has also committed to buying mortgage-backed securities and treasury bills, thereby supporting the housing finance market. The Fed has reaffirmed its commitment to these policies for the foreseeable future on several occasions, most recently at a policy meeting in late January.
- The 10-year Treasury note. Mortgage rates move at the same pace as the yields on 10-year government treasury bills. Yields fell below 1% for the first time in March 2020 and have slowly risen since then. Currently, yields have hovered above 1% year-to-date, pushing interest rates up slightly. On average, there is typically a 1.8 point “spread” between Treasury yields and benchmark mortgage rates.
- The economy in the broad sense. Unemployment rates and changes in gross domestic product are important indicators of the overall health of the economy. When employment and GDP growth are low, it means the economy is weak, which can lower interest rates. Thanks to the pandemic, unemployment levels hit historic highs early last year and have yet to recover. GDP has also been affected, and although it has rebounded somewhat, there is still a lot of room for improvement.
Tips for getting the lowest mortgage rate possible
There is no universal mortgage rate that all borrowers receive. Qualifying for the lowest mortgage rates takes a bit of work and will depend on both personal financial factors and market conditions.
Check your credit score and your credit report. Mistakes or other red flags that can lower your credit score. The borrowers with the highest credit scores will get the best rates, so it’s essential to check your credit report before you begin the home search process. Taking action to correct mistakes will help increase your score. If you have high credit card balances, paying them off can also give you a quick boost.
Save money for a large down payment. This will lower your loan-to-value ratio, which means how much of the home’s price the lender has to finance. A lower LTV usually results in a lower mortgage rate. Lenders also like to see money that has been saved in an account for at least 60 days. It tells the lender that you have the money to finance the purchase of the house.
Shop around for the best rate. Don’t settle for the first interest rate a lender offers you. Check with at least three different lenders to see who is offering the lowest interest rate. Also consider the different types of lenders, such as credit unions and online lenders, in addition to traditional banks.
Also take the time to learn about the different types of loans. While the 30-year fixed-rate mortgage is the most common type of mortgage, consider a shorter-term loan such as a 15-year loan or an adjustable rate mortgage. These types of loans often have a lower rate than a conventional 30-year mortgage. Compare everyone’s costs to see which one best suits your needs and your financial situation. Government loans – such as those backed by the Federal Housing Authority, the Department of Veterans Affairs, and the Department of Agriculture – may be more affordable options for those who qualify.
Finally, lock in your rate. Locking in your rate once you find the right rate, the right loan product, and the lender will help ensure that your mortgage rate does not increase until the loan closes.
Our mortgage rate methodology
Money’s Daily Mortgage Rates show the average rate offered by over 8,000 lenders in the United States for which the most recent rates are available. Today, we are posting the prices for Thursday, September 16, 2021. Our rates reflect what a typical borrower with a credit score of 700 can expect to pay on a home loan right now. These rates were offered to people contributing 20% and include discount points.