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A few benchmark mortgage rates shrank today. The averages for both 30-year fixed and 15-year fixed mortgages were slashed. The most common type of variable-rate mortgage is the 5/1 adjustable-rate mortgage (ARM) also fell.
The average mortgage rates are as follows:
- The average 30-year fixed-rate mortgage currently sits at 3.21%
- Today’s 15-year fixed mortgage rate is 2.48%
- 5/1 ARM rate: 3.07%
Today’s Mortgage Refinance Rates
There’s good news if you’ve been considering a refinance, because the mean rates for 15-year fixed and 30-year fixed refinance loans shrank. If you’ve been considering a 10-year refinance loan, just know average rates also trailed off.
Today’s refinance rates are:
- 30-year fixed refinance rates are averaging: 3.30%
- 15-year fixed refinance rates are averaging 2.56%
- 10-year fixed-rate refinance: 2.46%
30-Year Fixed-Rate Mortgages
For a 30-year fixed-rate mortgage, the average rate you’ll pay is 3.21%, which is a decline of 6 basis points from seven days ago.
You can use NextAdvisor’s mortgage payment calculator to work out what your monthly payments would be and calculate what you’ll save with additional payments. The mortgage calculator can also show you the total interest you’ll pay over the life of the loan
15-Year Fixed-Rate Mortgages
The median rate for a 15-year fixed mortgage is 2.48%, which is a decrease of 3 basis points from the same time last week.
A 15-year, fixed-rate mortgage’s monthly payment will be much bigger. So finding room in your budget for a 30-year loan’s monthly payment would be more simple. However, 15-year loans have some considerable benefits: You’ll pay thousands less in interest and pay off your loan much earlier.
5/1 Adjustable-Rate Mortgages
A 5/1 ARM has an average rate of 3.07%, a downtick of 1 basis point compared to last week.
An ARM is ideal for individuals who will sell or refinance before the rate changes. If that’s not the case, their interest rates could end up being remarkably higher after a rate adjusts.
For the first five years, a 5/1 ARM will typically have a lower interest rate compared to a 30-year fixed mortgage. Just keep in mind that your payment could end up being hundreds of dollars higher after a rate adjustment, depending on the terms of your loan.
Recent Mortgage Rate Movement
To see where mortgage rates are going we rely on information collected by Bankrate, which is owned by the same parent company as NextAdvisor. Looking at mortgage rate history, we’re in an exceptionally low rate environment. This table has current average rates based on information provided to Bankrate by lenders from across the country:
|Loan type||Interest rate||A week ago||Change|
|30-year fixed rate||3.21%||3.27%||-0.06|
|15-year fixed rate||2.48%||2.51%||-0.03|
|30-year jumbo mortgage rate||3.22%||3.29%||-0.07|
|30-year mortgage refinance rate||3.30%||3.34%||-0.04|
Updated on April 8, 2021.
There isn’t a single factor that causes mortgage rates to move, but rather there are many. Chief among them are things including inflation and even the unemployment rate. When you see inflation increasing, that usually means mortgage rates are about to climb higher. On the other hand, lower inflation typically accompanies lower mortgage rates. With higher inflation, the dollar becomes less valuable. This scenario pushes buyers away from mortgage-backed securities, which leads to price decreases and the need for increasing yields. And higher yields require borrowers to pay higher interest rates.
The demand for housing can also impact mortgage rates. If more people are buying homes, there is a greater need for mortgages. This type of demand can drive interest rates up. And if there is less demand for mortgages, that can cause a decline in mortgage rates.
Where Are Mortgage Rates Headed in 2021?
In February, we saw mortgage interest rates gain steam, moving well above their previous all-time lows to over 3%. However, rates are still historically favorable for borrowers. And for 2021, some experts predict mortgage rates won’t go much higher. Although we could see rates start to gradually rise again as the year progresses.
How we deal with coronavirus, and its impact on the economy, will have a big impact on rates. As the economy recovers, we should see inflation rise, which will put upward pressure on mortgage rates. But in spite of the potential for rising inflation, it’s unlikely that we’ll see skyrocketing mortgage rates in 2021. One reason for this: the Federal Reserve believes that low interest rates will help the economy rebound. So it’s unlikely to make moves that could increase rates.
This Month’s Mortgage Predictions
Following the recent flurry of activity with mortgage rates, many experts are predicting mortgage rates will be calmer this month.
The economy is beginning to show signs of life and investors are expecting increased inflation. This has driven 10-year Treasury bond yields up, which is a key indicator for mortgage rates. But, the Federal Reserve has expressed a desire to keep rates low. Also, some in the industry believe that fears of inflation are somewhat overblown. So don’t expect to see a massive surge in rates this month.
This Week’s Mortgage Predictions
A modest rise is what some experts are forecasting for mortgage rates this week. This would be a bit of a leveling off from previous weeks.
While there is nothing this week that should cause a spike or dramatic downturn in rates, the unexpected can happen. And currently, the economy still has a long way to go to return to its pre-pandemic level.
Factors Influencing Today’s Mortgage Rates
Everything from the broader economic outlook to your individual financial situation can impact mortgage rates. Not only that, but the type of mortgage and the property itself also factor into the equation.
Here are a few factors that influence rates:
- Condition of the economy
- Decisions made by the Federal Reserve
- Consumer and government spending
- 10-year U.S. Treasury yields
- Inflation rates
- Personal situation: Loan term, type and location of the property, and credit score
How to Qualify for the Lowest Mortgage Rate
There are three key considerations to getting the best mortgage interest rate: Debt-to-income ratio (DTI), loan-to-value ratio (LTV), and your credit score.
These days, a credit score of at least 750 will help you secure the best rate. But, even a score 700 or higher can get you a noticeable rate reduction compared to a lower credit score. However, once you get a credit score higher than 800, the interest rate discount is negligible.
Your debt will impact not only the price of the house you can purchase, but also your interest rate. The maximum DTI for most mortgage loans is 43%. So If you make $3,000 a month you’d be allowed to have up to $1,290 in monthly bills. But a DTI of 28% or less is more likely to get you a reduction in your mortgage rate..
Mortgage providers offer the largest mortgage rate discounts to borrowers that are seen as less risky. One surefire way to show you’re more likely to make your monthly payments is to bring a bigger down payment to the closing table. A down payment of 20% or more will save you money in two ways: with a more favorable mortgage rate, and you’ll be able to avoid paying for private mortgage insurance (PMI).
What to Know About Recent Rate Hikes
Over the past few months, mortgage rates have surged. Since we hit an all-time low average of 2.65% for 30-year fixed mortgages, we’ve seen rates increaseto 3.09%.
Rising rates can have a significant impact on your homebuying budget. The 0.44% increase we’ve experienced has increased the monthly payment on a 30-year $300,000 loan by $71 a month. But don’t expect current rates to cool off the red hot real estate market.
The demand for the few homes on the market isn’t likely to be offset by the current mortgage rates, which are still historically low. So for the spring buying season, the real estate market is shaping up to be more of the same – tough for buyers.
How We Got These Rates
The rates we have included are averages provided by Bankrate.com Site Averages and are calculated after the close of the previous business day. The lenders that the “Bankrate.com Site Average” tables include are not the same every day.
National lenders provide this mortgage rate information to Bankrate.com. It is possible the mortgage rates we reference has changed since this was published.
Mortgage Interest Rates by Loan Type
Home Purchase Rates
- 30 Year Fixed Mortgage Rates
- 20 Year Fixed Mortgage Rates
- 15 Year Fixed Mortgage Rates
- 10 Year Fixed Mortgage Rates
- VA Mortgage Rates