What we’re seeing today is a handful of closely followed mortgage rates have slid downward. Both 30-year fixed and 15-year fixed mortgage rates moved down. At the same time, average rates for 5/1 adjustable-rate mortgages (ARM) remained steady.
Mortgage rates currently are:
- Today’s average 30-year fixed mortgage rate is 3.11%
- 20-year fixed mortgage rates are averaging 2.94%
- The average 15-year fixed-rate mortgage currently sits at 2.38%
- 10-year mortgage rate: 2.32%
- 5/1 ARM rate: 2.79%
What this means for borrowers:
Historically low rates continue to be available to highly qualified borrowers. But for many buyers, getting a good rate isn’t making it any easier to find a home. There aren’t many homes for sale, so competition has caused home prices to rise. So if you’re shopping for a home, be prepared to move quickly as the few homes on the market are moving fast.
Looking at Today’s Mortgage Refinance Rates
There’s good news if you’ve been considering a refinance because the mean rates for 15-year fixed and 30-year fixed refinance loans slumped. If you’ve been considering a 10-year refinance loan, just know average rates also sank.
The average refinance rates are as follows:
- Today’s average 30-year fixed refinance rate is: 3.08%
- 20-year fixed-rate refinance: 2.93%
- 15-year fixed refinance rates are averaging 2.36%
- 10-year fixed refinance rate: 2.30%
30-Year Fixed Mortgage Rates
The median interest rate for a standard, 30-year, fixed mortgage is 3.11%, which is a decline of 2 basis points from the previous week.
You can use NextAdvisor’s mortgage calculator to determine your monthly payments 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 pay over the life of the loan.
15-Year Fixed Mortgage Interest Rates
The median rate for a 15-year fixed mortgage is 2.38%, which is a decrease of 2 basis points compared to a week ago.
A 15-year, fixed-rate mortgage’s monthly payment is, without a doubt, 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 Rates
A 5/1 ARM has an average rate of 2.79%, the same rate compared to last week.
An adjustable-rate mortgage is ideal for individuals who will sell or refinance before the rate changes. If that’s not the case, their interest rates could end up being noticeably 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 payment could end up being hundreds of dollars higher after a rate adjustment, depending on the terms of your loan.
Mortgage Rate Movement
The mortgage rate you qualify for is partially dependent on personal factors, such as your credit score or the size of your down payment. But general rate trends involve a number of things that are out of your control. The Federal Reserve Bank’s policies, demand for mortgages, and the health of the economy all factor into mortgage rate trends
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 calculate our mortgage rates
We use Bankrate’s daily rate data for our mortgage rate trends. These overnight rates are based on a specific borrower profile, which only includes loans for single-family homes with a loan-to-value ratio of 80% or better.
Bankrate is part of the same parent company as NextAdvisor.
|Loan type||Interest rate||A week ago||Change|
|30-year fixed rate||3.11%||3.13%||-0.02|
|15-year fixed rate||2.38%||2.40%||-0.02|
|30-year jumbo mortgage rate||3.11%||3.15%||-0.04|
|30-year mortgage refinance rate||3.08%||3.12%||-0.04|
Updated on October 6, 2021.
Should I Lock in My Mortgage Rate Now?
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 something happens where you need to extend your rate lock, ask about fees as many lenders charge a fee for extending a rate lock.
Where Are Mortgage Rates Headed in 2021?
For the past several months, mortgage rates have been in a holding pattern, hovering near 3%. It looks like this trend for rates will continue, as long as the Federal Reserve doesn’t change its policies that have kept rates low. 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.
What happens with rates will depend on the economy. A growing economy usually goes hand in hand with rising mortgage rates. If spending increases, from the government and consumers, that’s likely to drive inflation higher. However, the Federal Reserve believes the inflation we’re seeing is only temporary, and so rates have stayed low. 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 low rates will help our economic recovery. So it’s likely to make policy decisions in favor of keeping rates low.
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 Get the Best Mortgage Rate
Shopping around for a home loan is a great way to secure the lowest interest rate.
Your mortgage rate 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 your loan-to-value (LTV) ratio is also important, so having a bigger down payment is better for your mortgage rate.
But banks will look at your situation differently. So you can provide the same documentation to three different banks, and receive mortgage offers with vastly different rates and fees.