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What we’re seeing today is a handful of closely followed mortgage rates have declined. Both 30-year fixed and 15-year fixed mortgage rates slumped. We also saw an increase in the average rate of 5/1 adjustable-rate mortgages (ARM).
Take a look at today’s rates:
- 30-year fixed mortgage rates are averaging 3.09%
- 20-year fixed mortgage rates are averaging 2.98%
- The average 15-year fixed-rate mortgage currently sits at 2.36%
- 10-year fixed mortgage rates are averaging 2.32%
- The average 5/1 adjustable mortgage currently sits at 3.24%
Current 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 receded. Shorter term, 10-year fixed-rate refinance mortgages also saw a decrease.
The refinance averages for 30-year, 15-year, and 10-year loans are:
- The average 30-year fixed-rate refinance currently sits at: 3.15%
- 20-year fixed refinance rates are averaging 3.04%
- 15-year fixed-rate refinance: 2.41%
- 10-year fixed-rate refinance: 2.40%
Today’s 30-Year Fixed-Rate Mortgage Rates
The average 30-year fixed mortgage interest rate is 3.09%, which is a decrease of 1 basis point from last week.
You can use NextAdvisor’s home loan 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 all of the interest you’ll pay over the life of the loan
Today’s 15-Year Fixed-Rate Mortgage Rates
The median rate for a 15-year fixed mortgage is 2.36%, which is a decrease of 1 basis point compared to a week ago.
A 15-year, fixed-rate mortgage’s monthly payment is, undeniably, a much bigger monthly payment than what you’d get with a 30-year mortgage offering the same interest rate. But, 15-year loans have some considerable benefits: You’ll pay thousands less in interest and pay off your loan much earlier.
Today’s 5/1 Adjustable-Rate Mortgage Rates
A 5/1 ARM has an average rate of 3.24%, which is an increase of 8 basis points compared to last week.
An adjustable-rate mortgage 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 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. 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.
Mortgage Rate Trends
To see where mortgage rates are headed, 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. 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 from across the nation:
|30-year jumbo mortgage rate||3.10%||3.12%||-0.02|
|30-year mortgage refinance rate||3.15%||3.16%||-0.01|
Rates as of June 11, 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 It a Good Idea to Lock in My Mortgage Rate Right Now?
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.
A rate lock will only last for a set amount of time, typically 30-60 days. If you hit a snag during closing and it looks like your rate lock will expire you should talk with your lender. It may offer an extension of the lock, however, you might have to pay a fee for that privilege.
What Is in the Future for Mortgage Rates?
In February and March, mortgage rates increased, moving well above their previous all-time lows to over 3%. But in recent months, rates have fallen and have been hovering around 3%, which is still historically favorable for borrowers. And for 2021, some experts see mortgage rates continuing to stay low. Although in the second half of the year we could see rates gently climb higher.
What happens with rates will depend on the economy. And effectively dealing with the impacts of the coronavirus pandemic should boost our economic recovery. As the economy recovers, we should see inflation rise, which will push interest 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 Forecast
Mortgage rates have stabilized somewhat after an up and down first few months of the year. As the year progresses, they are likely to remain reasonably flat but could start to trend higher.
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
Shopping around for a mortgage is a great way to get the lowest interest rate.
The mortgage rate you’ll qualify for depends on a number of factors lenders consider when assessing how risky it is to give you a mortgage. Your credit score and debt-to-income ratio (DTI) are a big part of this decision. And even the value of the property compared to your mortgage balance is important. So putting more money into your down payment can reduce your mortgage interest rate.
But lenders will consider your circumstances differently. So you can give the same documentation to three different lenders, and find that none of the mortgage rates and fees you are offered are the same.