We want to help you make more informed decisions. Some links on this page — clearly marked — may take you to a partner website and may result in us earning a referral commission. For more information, see How We Make Money.
A variety of notable mortgage rates declined today. The averages for both 30-year fixed and 15-year fixed mortgages diminished. We also saw no variation in the average rate of 5/1 adjustable-rate mortgages.
Mortgage interest rates are dynamic. However, by historical standards they’re quite low. If you’re looking for a mortgage, now it 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 average 30-year fixed mortgage interest rate is 3.02%, which is a decline of 5 basis points from the previous week .
You can use NextAdvisor’s mortgage loan calculator to work out what your monthly payments would be and understand how adding extra payments will impact your loan. The mortgage calculator can also show you how much 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 2.50%, which is a decrease of 12 basis points compared to a week ago.
A 15-year, fixed-rate mortgage’s monthly payment is larger and will put more stress on your monthly budget than a 30-year mortgage would. 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 adjustable-rate mortgage has an average rate of 3.04%, the same rate compared to last week.
An adjustable-rate mortgage 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 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 Moving
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 country:
|30-year jumbo mortgage rate||3.07%||3.12%||-0.05|
|30-year mortgage refinance rate||3.18%||3.19%||-0.01|
Rates as of November 11, 2020.
When Should I Lock my Rate?
When you lock a rate it freezes the interest rate for a set amount of time. If your lender offers a rate lock, be sure to ask about fees. There may be a fee to lock your rate, but it’s typically not very large or it can be added into the cost of your loan. In general, the longer the interest rate lock period, the more pricey it will be. You may even run into a lender that will lock a rate for a shorter period of time so it can minimize the risk of a big jump in rates.
If mortgage rates rise, the rate lock kicks in to protect you. When interest rates are declining you may be concerned about a rate lock; you don’t want to lock into a higher rate after all. One way to protect yourself in this scenario is to ask if your lender offers a floating rate lock. This allows you to get a lower rate if interest rates drop before you close your loan. Mortgage rates can be extremely unpredictable, so no one knows how they will change from day-to-day. That’s why it’s usually the right move to lock in a low rate, rather than betting on mortgage rates taking a tumble.
Don’t forget that during the pandemic, mortgage professionals have been extremely busy and it’s taking longer to close on a home. In some cases, it can take up to 60 days to close a mortgage loan — and there are also delays with mortgage refinancing.
What Makes Mortgage Rates Move
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.
Where Are Mortgage Rates Going?
In recent months, mortgage rates fell to new all-time lows. But what the future holds isn’t easy to predict. 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. However, if the economic recovery continues to be slow and the pandemic drags on, it’s likely we’ll see low rates for the foreseeable future.
Current Mortgage Rate Bearings
Mortgage rates haven’t been as stable as usual because of the COVID-19 pandemic and what it has done to the economy. But in general, rates have been depressed. In fact, mortgage rates set a record low, dipping under 3% for the first time. The problem for some people is you need excellent credit to qualify for these exceptionally-low rates. Not only that, but mortgage lenders are becoming more risk averse and requiring more sizable down payments while also closely scrutinizing borrowers’ employment.
Mortgage Rates’ Impact on Borrowers
The rock-bottom mortgage rates we’ve seen have distinct advantages and disadvantages for homebuyers. For starters, buyers have the ability to borrow larger amounts now than when rates were higher. For example, a 30-year, $350,000 loan with a 4% interest rate would have a monthly mortgage and interest payment of $1,670. A payment on the exact same loan would drop to $1,475 if the mortgage rate was reduced to 3%.
One drawback to slumping mortgage rates is that buyers may find increased competition for that dream home, which can drive home prices up.
Let’s take a look at how lower mortgage rates and rising prices can impact a homebuyer. A $350,000 home purchase with a 4% interest rate would have a monthly payment of $1,336 with a 30-year loan. At 20% down that’s a $70,000 down payment.
Suppose the price of the same property jumps to $380,000, while the mortgage rate drops to 3%. If you can still manage a down payment of 20% the monthly payment on a 30-year loan would be $1,451, an increase of only $115 a month. But the down payment goes up by another $6,000, and some of your closing costs are also likely to rise.
Is Now a Good Time to Buy a Home?
There’s no “right time” to buy a house — the decision is a highly personal one. Keep in mind, when you purchase a home the monthly payment won’t be your only cost. You’ll also need enough money saved up for upfront closing costs and a down payment. And you’ll get a better deal if you have a higher credit score and lower debt-to-income ratio.
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.