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Today, a handful of principal mortgage rates moved up. Both 30-year fixed and 15-year fixed mortgage rates inched up. The most common type of variable-rate mortgage is the 5/1 adjustable-rate mortgage, fell.
Mortgage interest rates change constantly. However, for months they’ve hovered near historic lows. If you’re looking for a mortgage, now can be a good idea to pick up a low fixed rate. But don’t forget to take the time to compare rates from various lenders first.
30-Year Fixed-Rate Mortgages
For a 30-year, fixed-rate mortgage, the average rate you’ll pay is 2.94%, which is an increase of 8 basis points from last week.
You can use NextAdvisor’s home loan calculator to get an idea of what your monthly payments will be and calculate what you’ll save with additional payments. The mortgage calculator can also show you the total interest you’ll owe over the life of the loan
15-Year Fixed-Rate Mortgages
The median rate for a 15-year, fixed mortgage is 2.40%, which is an increase of 10 basis points from the same time last week.
A 15-year, fixed-rate mortgage’s monthly payment is larger and will take up a bigger chunk of your monthly budget than a 30-year mortgage would. However, 15-year loans have some considerable benefits: You’ll pay thousands less in interest and pay off your loan much faster.
5/1 Adjustable-Rate Mortgages
A 5/1 adjustable-rate mortgage has an average rate of 2.90%, a fall of 5 basis points compared to last week.
An adjustable-rate mortgage is ideal for households that will refinance or sell 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. Keep in mind, your payment could end up being hundreds of dollars higher after a rate adjustment, depending on the terms of your loan.
Where Rates Are Trending
To see where mortgage rates are moving we rely on information collected by Bankrate, which is owned by the same parent company as NextAdvisor. This table has current average rates based on information provide to Bankrate by lenders from across the nation:
|Loan type||Interest rate||A week ago||Change|
|30-year fixed rate||2.94%||2.86%||+0.08|
|15-year fixed rate||2.40%||2.30%||-0.10|
|30-year jumbo mortgage rate||3.00%||2.90%||+0.10|
|30-year mortgage refinance rate||3.01%||2.90%||+0.11|
Updated on January 13, 2021.
There isn’t a single factor that causes mortgage rates to move, but rather there are many. Chief among them are things like 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.
What Does the Future Hold for Mortgage Rates?
In recent months, we’ve seen mortgage interest rates linger near all-time lows. But it’s difficult to determine where they will go from here. The economy will play a big factor, and so will how well the coronavirus can be contained. When the economy recovers, rates will rise. But this could be largely dependent on the development of a coronavirus vaccine. Conversely, mortgage rates are likely to stay low if the coronavirus continues to cause economic hardship.
Is Now a Good Time to Buy a Home?
Whether or not you buy a home is a highly personal choice. Your financial situation will play a big role in your decision. Before you buy a home, you’ll want to have a secure source of income, enough saved for closing costs, and a high credit score.
However, the pandemic has exacerbated a shortage of homes, leading to bidding wars and rising prices. Those trends mean it can be a frustrating market 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
- 30 Year Fixed Mortgage Rates
- 20 Year Fixed Mortgage Rates
- 15 Year Fixed Mortgage Rates
- 10 Year Fixed Mortgage Rates
- VA Mortgage Rates
- 30 Year Fixed Refinance Rates
- 15 Year Fixed Refinance Rates
- VA Refinance Rates