Today’s National Mortgage Rates, July 21, 2021 | Rates Declined

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A variety of benchmark mortgage rates sunk lower today. The averages for both 30-year fixed and 15-year fixed mortgages slid down. The most common type of variable-rate mortgage is the 5/1 adjustable-rate mortgage (ARM) which also declined.

Take a look at today’s rates:

What this means for borrowers:
Qualified borrowers continue to have access to low mortgage rates. But for many buyers, getting a good rate isn’t making it any easier to find a home. Exceptionally low inventory has led to a rise in bidding wars and pushed home prices higher at a rapid pace. With so few homes for sale, buyers can expect to face a competitive market.

Looking at Today’s Mortgage Refinance Rates

There’s good news if you’ve been considering a refinance because the average rates for 15-year fixed and 30-year fixed refinance loans shrank. Shorter term, 10-year fixed-rate refinance mortgages also slumped.

Take a look at today’s refinance rates:

Take a look at mortgage rates for different types of loans.

30-Year Fixed Mortgage Rates

The 30-year fixed-mortgage rate average is 2.98%, which is a decline of 4 basis points from seven days ago.

You can use NextAdvisor’s home loan payment calculator to get an idea of what your monthly payments will be and understand how adding extra payments will impact your loan. The mortgage calculator can also show you the total interest you’ll pay over the life of the loan.

15-Year Fixed Mortgage Rates

The median rate for a 15-year fixed mortgage is 2.33%, which is a decrease of 4 basis points from seven days ago.

A 15-year, fixed-rate mortgage’s monthly payment is larger than what you would pay with a 30-year mortgage. However, 15-year loans have some considerable benefits: You’ll save thousands of dollars in interest and pay off your loan much sooner.

5/1 Adjustable-Rate Mortgage Rates

A 5/1 ARM has an average rate of 2.80%, a slide of 2 basis points compared to last week.

An ARM is ideal for borrowers who 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 that depending on how much your loan’s rate adjusts, your payment has the potential to increase by a large amount.

Mortgage Interest Rate Trends

To see where mortgage rates are headed,, we rely on information collected by Bankrate, which is owned by the same parent company as NextAdvisor. Looking at mortgage rate history, we’re seeing low rates like never before. The table below compares today’s average rates to what they were a week ago, and is based on information provided to Bankrate by lenders nationwide:

Today’s mortgage interest rates
Loan termToday’s RateLast weekChange
30-year mortgage rate2.98%3.02%-0.04
15-year fixed rate2.33%2.37%-0.04
30-year jumbo mortgage rate2.99%3.03%-0.04
30-year mortgage refinance rate2.96%3.10%-0.14

Rates accurate as of July 21, 2021.

A number of factors can influence mortgage rates, including everything from inflation to unemployment. In general, inflation leads to higher interest rates and vice versa. The dollar loses value with increased inflation, and this causes mortgage-backed securities to become less enticing for investors, which leads to falling prices and higher yields. And if yields increase, interest rates become more expensive for borrowers.

The Federal Reserve Bank can also influence rates, although it doesn’t directly set mortgage interest rates. Currently, the Federal Reserve is purchasing billions of dollars in mortgage-backed securities (MBS) each month. This increased demand for MBS has helped to keep rates from increasing and should continue to do so until the Federal Reserve announces it will taper its purchase of MBS.

Is Now a Good Time to Lock in My Mortgage Rate?

It’s impossible to know what direction mortgage rates will go from day to day. That’s why a mortgage rate lock is such a useful tool because it protects you if rates go up. And with interest rates so low right now, you should lock in your rate as soon as you can.

When you lock in your rate, ask your lender how long the lock will last. A rate lock can be good for anywhere from 30 to 60 days, which typically will give you enough time to close before the lock expires. If something happens where you need to extend your rate lock, ask about fees as many lenders charge a fee for extending a rate lock.

Where Are Mortgage Rates Headed in 2021?

In February and March, we saw mortgage interest rates gain steam, moving above 3% for the first time in more than seven months. Since then, rates have fallen and have been hovering around 3%, which is still historically favorable for borrowers. And for 2021, some experts predict mortgage rates won’t go much higher.

America’s economic recovery will greatly impact rates. if we continue to see economic growth the expectation is that rates will rise. And although inflation looks to be rising, the Federal Reserve believes this is only temporary. So inflation hasn’t pushed rates higher. 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 likely to make policy decisions in favor of keeping rates low.

2021 Mortgage Rate Predictions

Mortgage rates have leveled off a bit after an up and down first few months of the year. Looking forward, they are likely to remain reasonably flat but could start to trend higher later in the year.

However, the economy still has a long way to go before it recovers to pre-pandemic levels. If we get surprised by any bad news, that could put a damper on rates.

How to Qualify for the Lowest Mortgage Rate

Your credit score, and loan-to-value ratio (LTV), and are the most important factors in determining your interest rate.

To get the lowest interest rate, it’s best to have a credit score between 700 to 800. Having a credit score above 800 is nice, but will likely have a minimal impact on your rate.

Lenders give the biggest mortgage rate discounts to borrowers that are deemed less risky. A large down payment is a sign to lenders that you have more skin in the game and are less likely to stop making payments. 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).