30-Year Mortgage Rates Are on the Rise Today. Here’s What That Means for Homebuyers

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Even though mortgage rates were varied today, an important rate inched upward. Average 30-year fixed mortgage rates are higher, while average 15-year fixed mortgage rates were static. We also saw a downward slide in the average rate of 5/1 adjustable-rate mortgages (ARM).

Mortgage rates currently are:

What this means for borrowers:
Mortgage interest rates continue to linger near all-time lows, which increases how much homebuyers can borrow. But at the same time, it is also helping to fuel demand and cause home prices to skyrocket. So in many areas, surging home prices have offset the benefits of low interest rates. Adding to the problem is low housing inventory, and supply chain disruptions have increased the cost of building new homes. So buyers are likely to face a tough market for the remainder of this year.

Current Mortgage Refinance Rates

Interestingly, 30-year fixed refinance rates ticked up, when at the same time national rate averages for a 15-year fixed refinance stayed flat. Shorter term, 10-year fixed-rate refinance mortgages moved up.

The refinance averages for 30-year, 15-year, and 10-year loans are:

Check out mortgage rates that meet your distinct needs.

30-Year Fixed-Rate Mortgage Rates

The median interest rate for a standard, 30-year, fixed mortgage is 3.04%, which is an increase of 1 basis point from the previous week.

You can use NextAdvisor’s mortgage loan calculator to determine your monthly payments 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 Rates

The median rate for a 15-year fixed mortgage is 2.32%, which is the same rate 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 less difficult. But, 15-year loans have some considerable benefits: You’ll pay thousands less in interest and pay off your loan much sooner.

5/1 ARM Interest Rates

A 5/1 ARM has an average rate of 2.78%, a slide of 2 basis points from the same time last week.

An adjustable-rate mortgage is ideal for individuals 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 your payment could end up being hundreds of dollars higher after a rate adjustment, depending on the terms of your loan.

Mortgage Interest Rate Trends

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 interest rates

To get an idea of where mortgage rate may move, we rely on information collected by Bankrate, which is owned by the same parent company as NextAdvisor. The daily rates survey focuses on home loans where the borrower has a FICO score of 740 or more, a LTV of 80% or lower, and the home is occupied by the owner.

The table below compares today’s average rates to what they were a week ago, and is based on information provided to Bankrate by lenders from across the country:

Average mortgage interest rates
ProductRateLast weekChange
30-year fixed3.04%3.03%+0.01
15-year fixed2.32%2.32%N/C
30-year jumbo mortgage rate3.05%3.04%+0.01
30-year mortgage refinance rate3.01%2.99%+0.02

Rates as of September 10, 2021.

Should I Lock in My Mortgage Rate 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.

A rate lock will only last for a set amount of time, typically 30-60 days. If you hit a snag during closing and it looks like your rate lock will expire you should contact your lender. It may be able to extend the rate lock, however, you might have to pay a fee for that privilege.

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.

What happens with rates 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 likely to make policy decisions in favor of keeping rates low.

2021 Mortgage Rate Forecast

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 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

To qualify for the absolute best mortgage interest rate you should focus on two main things: Credit score, and loan-to-value ratio (LTV)..

To get the lowest rate, you’ll need a credit score somewhere between 700-800. Having a credit score above 800 is nice, but will likely have no major impact on your rate.

Lenders give the most substantial mortgage rate reductions to borrowers that are seen as less risky. A bigger down payment is a signal to lenders that you have more skin in the game and are less likely to default on your loan. 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).