Today’s Mortgage Rates, May 4, 2021 | Rates Increased

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Looking at today’s mortgage rates a number of preeminent rates went higher. The averages for both 30-year fixed and 15-year fixed mortgages both inched up. For variable rates, the 5/1 adjustable-rate mortgage (ARM) held firm.

The averages for 30-year fixed, 15-year fixed, and 5/1 ARMs are:

Current Mortgage Refinance Rates

Checking in on refinance rates, the average rates for both 15-year fixed and 30-year fixed refinances remained unaltered. Shorter term, 10-year fixed-rate refinance mortgages went down.

The average refinance rates are as follows:

Check out mortgage rates that meet your distinct needs.

30-Year Fixed-Rate Mortgages

The 30-year fixed-mortgage rate average is 3.09%, which is an increase of 1 basis point from the previous week.

You can use NextAdvisor’s mortgage calculator to get an idea of what your monthly payments will be and play around with extra mortgage payments to wrap your head around how much you could save. 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 2.38%, which is an increase of 1 basis point 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 easier. 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 Mortgages

A 5/1 ARM has an average rate of 3.26%, the same rate from seven days ago.

An ARM is ideal for borrowers who will refinance or sell before the rate changes. If that’s not the case, their interest rates could end up being significantly 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 rate could climb higher and your payment might grow by hundreds of dollars a month.

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 historical mortgage rates, 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:

Current average mortgage interest rates
Loan typeInterest rateA week agoChange
30-year fixed rate3.09%3.08%+0.01
15-year fixed rate2.38%2.37%+0.01
30-year jumbo mortgage rate3.11%3.08%+0.03
30-year mortgage refinance rate3.14%3.14%N/C

Updated on May 4, 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.

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’s in Store for Mortgage Rates in 2021

Recently, mortgage rates have risen sharply and crossed 3% for the first time since last summer. Even with this dramatic increase, rates are near or still below the levels many experts expected mortgage rates to be at in 2021.

What happens with rates will depend on the economy. And effectively dealing with the impacts of the coronavirus pandemic should boost our economic recovery. If spending increases, from the government and consumers, that’s likely to drive inflation higher. In this scenario, we’ll most likely see mortgage rates begin to climb upward. But in spite of the potential for rising inflation, mortgage rates are likely to stay low this year. 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.

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 Federal Reserve would still like to keep rates low to boost the economy. And some experts believe the fears of inflation that have been driving rates higher are a bit overblown. So even though mortgage interest rates are likely to continue to rise over the long term, a massive spike isn’t likely.

This Week’s Mortgage Predictions

The current rise in mortgage rates is what we’d expect to see with the economy looking like it’s starting to recover. So this week’s mortgage rates forecast is for more of the same, but with only a potential for a moderate uptick.

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.

Factors Influencing Today’s Mortgage Rates

There is a wide range of factors that influence mortgage rates. Some are broader economic factors, and others are related to your personal circumstances.

  • Overall strength of the economy
  • Federal Reserve policy decisions
  • Consumer and government spending
  • Yields for 10-year Treasury bonds
  • Rate of inflation
  • Individual circumstances: Loan-to-value ratio, credit history, and type of mortgage

How to Qualify for the Lowest Mortgage Rate

Getting loan offers from a few lenders is a great way to secure the lowest mortgage rate.

Your mortgage rate depends on a variety 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 property’s value compared to your mortgage balance is important. So putting more money into your down payment can reduce your mortgage interest rate.

But banks will consider your circumstances differently. So you can give the same documentation to three different lenders, and receive mortgage offers with vastly different rates and fees.

What to Know About Recent Rate Hikes

We started off 2021 with mortgage rates dipping to a record low of 2.65%. In the weeks since then, the average 30-year fixed rates have steadily marched all the way up 3.09%. This increase is in line with what many experts have predicted, but it has happened earlier in 2021 than anticipated.

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.

There is still a severe shortage of homes for sale. So as we enter peak buying season, expect to continue seeing homes sell quickly for above the asking price. Those trends can make 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

Home Purchase Rates

Mortgage Refinance Rates

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