Mortgage Interest Rates Today, November 5, 2020 | Rates Moved up

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Today, a number of principal mortgage rates crept upward. Both 30-year fixed and 15-year fixed mortgage rates climbed up. We also saw a downward trend in the average rate of 5/1 adjustable-rate mortgages.

Mortgage interest rates change constantly. But the good news is, they are currently historically low. If you’re looking for a mortgage, now might be an excellent time to secure a fixed rate. Just keep in mind that you still need to compare offers from different lenders.

Find current mortgage rates for now.

30-Year Fixed-Rate Mortgages

For a 30-year, fixed-rate mortgage, the average rate you’ll pay is 3.07%, which is a growth of 6 basis points from seven days ago.

You can use NextAdvisor’s home loan 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 all of the 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 2.63%, which is an increase of 5 basis points compared to a week ago.

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 pay thousands less in interest and pay off your loan much earlier.

5/1 Adjustable-Rate Mortgages

A 5/1 ARM has an average rate of 3.03%, a slide of 1 basis point from the same time last week.

An adjustable-rate mortgage is ideal for households who will sell or refinance before the rate changes. If that’s not the case, their interest rates could end up being a significant amount 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 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 nation:

Today’s mortgage interest rates
Loan termToday’s RateLast weekChange
30-year mortgage rate3.07%3.01%+0.06
15-year fixed rate2.63%2.58%-0.05
30-year jumbo mortgage rate2.98%3.03%-0.05
30-year mortgage refinance rate3.06%3.11%-0.05

Rates accurate as of November 5, 2020.

Is a Rate Lock Important?

When you lock a rate it freezes the interest rate for a set amount of time. It’s not unheard of for lenders to offer rate locks for a fee, which could be included in the price of the 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 because it wants to avoid the risk of a big jump in rates.

If mortgage rates rise, a rate lock will guarantee your original rate. You may even come across what is known as a floating-rate lock. This enables you to take advantage of lower rates if they drop before closing. If interest rates are declining, a floating-rate lock could be a great option to consider. When it comes to mortgage rates, there are no guarantees for what direction they will head down the road. So it’s often a prudent move to secure a low rate rather than holding out hope for a significant rate drop in the future.

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.

Why do Mortgage Rates Fluctuate?

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. demand for mortgages, that can cause a decline in mortgage rates. high after a rate adjusts.

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 were a bit unstable thanks to the pandemic and shutdown, but overall they have been remarkably low. 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.