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Even though mortgage rates had no specific trajectory today, a notable rate increased. Average 30-year fixed mortgage rates are higher, while average 15-year fixed mortgage rates didn’t move. The most common type of variable-rate mortgage is the 5/1 adjustable-rate mortgage (ARM) held firm.
The averages for 30-year fixed, 15-year fixed, and 5/1 ARMs are:
- Today’s average 30-year fixed mortgage rate is 3.04%
- 20-year mortgage rate: 2.85%
- 15-year fixed mortgage rates are averaging 2.32%
- Today’s 10-year fixed mortgage rate is 2.27%
- 5/1 ARM rates are averaging 2.80%
What this means for borrowers:
Historically low rates continue to be available to eligible borrowers. But home buying is about much more than your rate. 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
Interestingly, 30-year fixed refinance rates ticked up, when at the same time average rates for a 15-year fixed refinance did not change. If you’ve been considering a 10-year refinance loan, just know average rates moved up.
Take a look at today’s refinance rates:
- 30-year fixed refinance rates are averaging: 3.01%
- 20-year fixed refinance rate: 2.85%
- 15-year refinance rate: 2.30%
- 10-year fixed refinance rate: 2.27%
30-Year Fixed-Rate Mortgage Rates
For a 30-year fixed-rate mortgage, the average rate you’ll pay is 3.04%, which is a growth of 1 basis point from the previous week.
You can use NextAdvisor’s mortgage calculator to get an idea of what your monthly payments will be and see how much you’ll save if you make extra payments. 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 2.32%, 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 easier. However, 15-year loans have some considerable benefits: You’ll pay thousands less in interest and pay off your loan much sooner.
5/1 ARM Mortgage Rates
A 5/1 ARM has an average rate of 2.80%, the same rate compared to a week ago.
An ARM is ideal for borrowers 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
Mortgage move up and down based on a wide rang of broad economic indicators such as inflation, the bond market, and unemployment numbers.. 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 we calculate our mortgage rates
To get an idea of the current mortgage rate trends, 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 740+ credit score, a LTV of 80% or lower, and the home is occupied by the owner.
This table has current average rates based on information provided to Bankrate by lenders nationwide:
|Loan term||Today’s Rate||Last week||Change|
|30-year mortgage rate||3.04%||3.03%||+0.01|
|15-year fixed rate||2.32%||2.32%||N/C|
|30-year jumbo mortgage rate||3.05%||3.04%||+0.01|
|30-year mortgage refinance rate||3.01%||2.99%||+0.02|
Rates accurate as of September 9, 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.
What Is in the Future for Mortgage Rates?
For the past several months, mortgage rates have held steady, staying around 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.
America’s economic recovery will greatly impact rates. if we continue to see economic growth the expectation is that rates will rise. And although inflation looks to be rising, the Federal Reserve believes this is only temporary. So inflation hasn’t pushed rates higher. But it will take a while for the us to recover to prepandemic levels. So if rates rise, it’s more likely to happen over time, not all at once.
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 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
If you’re looking for the absolute lowest interest rate you should focus on two main things: Credit score, and loan-to-value ratio (LTV)..
To get the lowest mortgage rate, it’s best to have a credit score somewhere between 700-800. Having a credit score above 800 is nice, but will likely have a minimal impact on your rate.
Banks give the biggest mortgage rate reductions to borrowers that are seen as less risky. A hefty down payment is a sign to lenders that you are more committed and are less likely to stop making payments. 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).