The most closely followed mortgage rates all marched higher today. Both 30-year fixed and 15-year fixed mortgage rates climbed higher. At the same time, average rates for 5/1 adjustable-rate mortgages (ARM) also had an upturn.
The averages for 30-year fixed, 15-year fixed, and 5/1 ARMs are:
- 30-year fixed mortgage rates are averaging 3.20%
- 20-year mortgage rate: 3.07%
- Today’s 15-year fixed mortgage rate is 2.43%
- 10-year fixed mortgage rates are averaging 2.38%
- 5/1 ARM rate: 2.80%
What this means for borrowers:
Historically low interest rates continue to be available to eligible borrowers. But home buying is about much more than your mortgage rate. Exceptionally low inventory has led to a rise in bidding wars and pushed home prices higher at a rapid pace. So if you’re shopping for a home, be prepared to move quickly as the few homes on the market are moving fast.
Today’s Mortgage Refinance Rates
Refinancing became a bit more expensive today as 30-year fixed and 15-year fixed refinance mortgages saw their mean rates go up. If you’ve been considering a 10-year refinance loan, just know average rates also saw growth.
Today’s refinance rates are:
- The average 30-year fixed-rate refinance currently sits at: 3.17%
- 20-year fixed refinance rate: 3.03%
- 15-year fixed refinance rate: 2.41%
- 10-year fixed-rate refinance: 2.37%
30-Year Mortgage Rates
The 30-year fixed-mortgage rate average is 3.20%, which is a growth of 7 basis points from last week.
You can use NextAdvisor’s mortgage payment 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 Mortgage Interest Rates
The median rate for a 15-year fixed mortgage is 2.43%, which is an increase of 4 basis points from seven days ago.
A 15-year, fixed-rate mortgage’s monthly payment is larger than what you would pay with a 30-year mortgage. But, 15-year loans have some considerable benefits: You’ll pay thousands less in interest and pay off your loan much earlier.
5/1 ARM Rates
A 5/1 ARM has an average rate of 2.80%, which is an increase of 1 basis point compared to a week 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 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. Keep in mind that your rate could climb higher and your payment might grow by hundreds of dollars a month.
Mortgage Interest Rate Movement
A number of factors can influence mortgage rates, including everything from inflation to unemployment. In general, more inflation leads to higher 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.
While there is no single entity that sets mortgage rates, the Federal Reserve Bank’s policies can impact what happens with interest rates. However, recently it has indicated that we could see a change in policy this year. The Federal Reserve has committed to purchasing a large number of mortgage-backed securities (MBS) each month, which helps keep rates low. But it could announce a reduction of its MBS purchases as early as this fall.
How our mortgage rates are calculated
NextAdvisor’s mortgage rate averages are pulled from Bankrate’s daily rate data.. These overnight rates are based on a specific personal financial profile, which only includes loans for primary residences where the borrower has a FICO score of 740+.
Bankrate is part of the same parent company as NextAdvisor.
|30-year jumbo mortgage rate||3.21%||3.14%||+0.07|
|30-year mortgage refinance rate||3.17%||3.12%||+0.05|
Rates as of October 14, 2021.
Is Now a Good Time to Lock in My Mortgage Rate?
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.
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 you want to extend the rate lock, ask about fees as many lenders charge a fee for extending a rate lock.
What Is in the Future for Mortgage Rates?
For the past several months, mortgage rates have held steady, staying around 3%. As long as the Federal Reserve stays the course and doesn’t change its policies, the current trend for rates is likely to continue. But there are indications that changes could be announced this fall, which could push rates higher, closer to the levels many experts predicted they would hit in 2021.
Looking at the early fall, there is still too much uncertainty to reasonably expect rates to spike. But if the rate of inflation starts to look like it is more than just temporary and the economy really starts to take off, then the Federal Reserve will likely take action. In that scenario, we could see rates start to rise.
What Will Mortgage Rates do in 2021?
Rates have stabilized after a period of fluctuation in the first few months of the year. It is expected that they will remain relatively stable in the coming weeks but may start trending upward toward the end of the year.
The economy still has a bumpy road to returning to its pre-pandemic level. So if we experience and mortgage rate increases this year, they will likely happen slowly over time.
How to Get the Best Mortgage Rate
Getting loan offers from a few lenders is a great way to qualify for the lowest rate.
The mortgage rate you get depends on a variety of factors lenders consider when assessing how likely you are to repay your home loan. Your credit score is a big part of this decision. And even the value of the property compared to the size of your mortgage is important. So putting more money into your down payment can reduce your mortgage interest rate.
But lenders will evaluate your situation differently. So you can give the same documentation to three different mortgage providers, and receive mortgage offers with vastly different rates and fees.