The most closely followed mortgage rates all moved up today. Both 30-year fixed and 15-year fixed mortgage rates moved higher. For variable rates, the 5/1 adjustable-rate mortgage (ARM) remained steady.
The average mortgage rates are as follows:
- 30-year mortgage rate: 3.19%
- 20-year fixed mortgage rates are averaging 3.06%
- The average 15-year fixed-rate mortgage currently sits at 2.43%
- Today’s 10-year fixed mortgage rate is 2.37%
- The average 5/1 adjustable mortgage currently sits at 2.80%
What this means for borrowers:
Mortgage rates continue to linger near historic lows, boosting the purchasing power for homebuyers that can secure a great rate. The flip side of this is that demand for homes has stayed strong and property values are increasing. So the potential savings of a low interest rate can be offset by the need to pay more for the property you want. Right now there aren’t enough homes for sale to meet the demand, and supply constraints have caused the prices of building materials to soar, there doesn’t look to be any relief for buyers in the near future.
Today’s Mortgage Refinance Rates
Refinancing became a bit more expensive today as 30-year fixed and 15-year fixed refinance mortgages saw their average rates trend upward. If you’ve been considering a 10-year refinance loan, just know average rates also made gains.
Take a look at today’s refinance rates:
- 30-year fixed refinance rates are averaging: 3.17%
- 20-year fixed refinance rate: 3.03%
- 15-year fixed refinance rate: 2.41%
- 10-year fixed refinance rates are averaging 2.37%
30-Year Mortgage Rates
The average 30-year fixed mortgage interest rate is 3.19%, which is a growth of 8 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 understand how adding extra payments will impact your loan. The mortgage calculator can also show you how much interest you’ll pay over the life of the loan.
15-Year Mortgage Interest Rates
The median rate for a 15-year fixed mortgage is 2.43%, which is an increase of 6 basis points from seven days 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 save thousands of dollars in interest and pay off your loan much faster.
5/1 ARM Interest Rates
A 5/1 ARM has an average rate of 2.80%, the same rate from seven days ago.
An adjustable-rate mortgage 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. 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
A number of factors can influence mortgage rates, including everything from inflation to unemployment. If a growing economy pushes inflation higher, then investors will require a higher rate of return. In that scenario, rates would need to increase to entice investors to purchase mortgage-backed securities (MBS). But if there is a lot of demand for MBS, then rate will do the opposite and decrease.
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. However, as the economy recovers the Federal Reserve could announce plans to reduce the amount of securities it purchases, which would allow rates to rise.
How we determine mortgage interest rates
We use Bankrate’s daily mortgage rate data for our mortgage rate trends. These overnight rates are based on a specific borrower profile, which only includes loans for owner occupied homes with 20% equity or more.
Bankrate is part of the same parent company as NextAdvisor.
|30-year jumbo mortgage rate||3.21%||3.12%||+0.09|
|30-year mortgage refinance rate||3.17%||3.07%||+0.10|
Rates as of October 12, 2021.
Is It a Good Idea to Lock in My Mortgage Rate Right Now?
Mortgage rates move up and down on a daily basis, and it’s impossible to time the market. So locking in your interest rate right now is a good idea because overall, rates are exceptionally low.
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.
What Does the Future Hold for Mortgage Rates?
This summer, mortgage rates have been extremely favorable for borrowers and have rarely topped 3%. Inflation and the economy both are looking stronger, which normally would push rates up. But the uncertainty surrounding the Delta variant has acted as a counterbalance. However, by the end of 2021 some experts predict mortgage rates won’t go much higher.
The direction rates go will depend on the economy. A growing economy usually goes hand in hand with rising mortgage rates. 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 unlikely to make moves that could increase rates.
2021 Mortgage Rate Forecast
In the coming weeks, we shouldn’t see any drastic changes in mortgage rates. That means we’re likely to see rates stay near or below 3%.
The uncertainty surrounding COVID variants has put a damper on rates. But if the Federal Reserve is confident enough in the U.S. economy, if could change course and ease its policies that have kept rates low.
How to Qualify for the Lowest Mortgage Rate
There are two key considerations to getting the best mortgage rate: Loan-to-value ratio (LTV), and your credit score.
Having a credit score of 750 or above will help you get the lowest rate. But, even a score of over 700 can get you a noticeable rate reduction compared to a lower credit score. Once your score starts climbing above 800, the interest rate discount won’t be meaningful.
Lenders give the largest mortgage rate reductions to home buyers that are deemed less risky. One surefire way to signal you’re more likely to make your monthly payments is to have a bigger down payment. 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).