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Today, a handful of closely followed mortgage rates grew. Both 30-year fixed and 15-year fixed mortgage rates climbed higher. For variable rates, the 5/1 adjustable-rate mortgage decreased.
Interest rates for mortgages change constantly. However, they’ve been quite low by historical standards. 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
The 30-year fixed-mortgage rate average is 2.90%, which is a growth of 1 basis point from seven days ago.
You can use NextAdvisor’s mortgage payment calculator to work out what your monthly payments would be and see how much you’ll save if you make extra 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 2.39%, which is an increase of 5 basis points from the same time last week.
A 15-year, fixed-rate mortgage’s monthly payment is, without a doubt, a much bigger monthly payment than what you’d get with a 30-year mortgage offering the same interest rate. 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 adjustable-rate mortgage has an average rate of 2.90%, a slide of 5 basis points from the same time last week.
An ARM is ideal for households that will sell or refinance before the rate changes. If that’s not the case, their interest rates could end up being markedly 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, depending on how much your loan’s rate adjusts, your payment has the potential to increase by a large amount.
Where Rates Are Trending
To see where mortgage rates are headed, 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 nationwide:
|Loan term||Today’s Rate||Last week||Change|
|30-year mortgage rate||2.90%||2.89%||+0.01|
|15-year fixed rate||2.39%||2.34%||-0.05|
|30-year jumbo mortgage rate||2.95%||2.94%||+0.01|
|30-year mortgage refinance rate||2.96%||2.95%||+0.01|
Rates accurate as of January 14, 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.
A strong economy has historically increased demand for homes. When more homes are sold, the demand for mortgages also increases, which can cause rates to go up. But the flip side is also true: A drop in demand for mortgages could signal a coming downturn 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. A vaccine could help boost the economy and lead to an increase in mortgage rates. 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 led to an even greater shortage of homes. That’s caused a bidding war 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