Mortgage rates today followed a divided path. The average fixed mortgage rate for 15 years decreased, while the average fixed mortgage rate for 30 years did not change. We also saw a 5/1 increase in the average rate on variable rate mortgages. Although mortgage rates fluctuate, they are at an all-time low. For this reason, now is an ideal time for potential homebuyers to secure a fixed rate. Before buying a home, remember to think about your personal needs and financial situation and speak to multiple lenders to find the best one for you.
Take a look at the mortgage rates that suit your individual needs
30 year fixed rate mortgage
The 30-year average fixed mortgage rate is 3.07%, unchanged from seven days ago. (One basis point is 0.01%.) The most common loan term is a 30 year fixed rate mortgage. A 30-year fixed-rate mortgage usually has a lower monthly payment than a 15-year mortgage – but often a higher interest rate. You won’t be able to repay your home anytime soon, and you will pay more interest over time, but a 30-year fixed-rate mortgage is a great option if you want to minimize your monthly payment.
15 year fixed rate mortgage
The average interest rate for a 15-year fixed-rate mortgage is 2.35%, a decrease of 6 basis points from the same period last year. You definitely have a higher monthly payment with a 15 year fixed rate mortgage compared to a 30 year fixed rate mortgage, even if the interest rate and loan amount are the same. However, a 15 year loan is usually a better deal if you can afford the monthly payments. This usually includes getting a lower interest rate, paying off your mortgage earlier, and paying less total interest in the long run.
5/1 adjustable rate mortgages
A 5/1 ARM has an average rate of 3.07%, up 1 basis point from seven days ago. For the first five years of the mortgage, you will typically get a lower interest rate (compared to a 30-year fixed-rate mortgage) with a 5/1 ARM. However, changes in the market can cause your interest rate to increase after that time as stated in the terms of your loan. For borrowers planning to sell or refinance their home before the interest rate changes, an adjustable rate mortgage can be a good option. If not, market shifts can increase your interest rate significantly.
Mortgage rate development
We use the data collected by Bankrate, owned by the same parent company as CNET, to track rate changes over time. This table summarizes the average interest rates offered by lenders across the country:
|30 years||3.07%||3.07%||N / C.|
|15 years fixed||2.35%||2.41%||-0.06|
|30 year jumbo mortgage rate||3.27%||3.20%||+0.07|
|30 year refinancing rate for mortgages||3.13%||3.13%||N / C.|
Prices from April 26, 2021.
How to Find Personalized Mortgage Rates
When you’re ready to apply for a loan, you can contact a local mortgage broker or search online. When looking for a mortgage, be sure to think about your current finances and goals. Factors that affect the potential mortgage rate include: your creditworthiness, down payment, credit-to-value ratio, and your debt-to-income ratio. In general, you want a good credit score, higher down payment, lower DTI, and lower LTV in order to get a lower interest rate. The interest rate isn’t the only factor that affects the cost of your home. Also consider additional factors such as fees, closing costs, taxes, and discount points. You should compare the shop with multiple lenders – such as credit unions and online lenders alongside local and national banks – to get a mortgage loan that suits you best.
What is the best loan term?
An important consideration when choosing a mortgage is the loan term or payment schedule. The most common loan terms are 15 years and 30 years, but there are also mortgages with terms of 10, 20 and 40 years. Another important difference is between fixed rate and adjustable rate mortgages. For fixed rate mortgages, the interest rates are set for the life of the loan. Variable rate mortgages have interest rates fixed for a number of years (usually five, seven, or ten years). The interest rate then fluctuates annually based on the current market interest rate. When deciding between a fixed rate mortgage and an adjustable rate mortgage, consider how long you plan to stay in your home. For those looking to stay in a new home for the long term, fixed rate mortgages may be a better option. While adjustable rate mortgages may have lower interest rates upfront, fixed rate mortgages are more stable over the long term. However, if you don’t plan to keep your new home for more than three to ten years, a variable rate mortgage may be a better deal for you. The “best” loan term all depends on your specific situation and goals. Therefore, when choosing a mortgage, be sure to consider what is important to you.