July 30, 2021

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Mortgage Rates Continue to Slide | July 21, 2021

The average rate on a 30-year fixed-rate mortgage is now 3.225%, down 0.032 percentage points on a daily basis. Interest rates for all other loan categories also fell.

As interest rates continue to fall, well-qualified borrowers who continue planning will apply for a mortgage or Refinancing Your current home loan should be able to find and secure very affordable interest rates.

  • The most recent interest rate on a 30-year fixed-rate mortgage is 3.225%.
  • The most recent interest rate for a 15-year fixed-rate mortgage is 2.306%.
  • The latest rate on a 5/1 Jumbo ARM is 2.151%.
  • The latest rate on a 7/1 compliant ARM is 4.072%.
  • The latest rate on a 10/1 compliant ARM is 3.905%.

Mortgage Rates Today: 30 Year Fixed Rate Mortgages

  • The 30-year rate is 3.225%.
  • This is a day ofwrinkle of 0.032 percentage points. ⇓
  • That’s a month ofwrinkle of 0.271 percentage points. ⇓

Fixed-rate mortgages have predictable interest rates and constant monthly payments. The most popular of all fixed-rate loans is the 30-year mortgage due to the long payback period and low monthly payments. The interest rate, on the other hand, is higher than the interest rate on shorter-term loans, so you end up paying more interest on a 30-year loan even though the payments are low.

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Average mortgage rates

Data is based on U.S. mortgage loans completed on 7/20/2021

Credit type 20th of July Last week change
15 years firmly conventional 2.31% 2.4% 0.09%
Firmly conventional for 30 years 3.23% 3.32% 0.09%
7/1 ARM rate 4.07% 4.11% 0.04%
10/1 ARM rate 3.91% 4.17% 0.26%

Your actual price may differ

Mortgage rates today: 15 years fixed rate Mortgage rates

  • The 15-year rate is 2.306%.
  • This is a day ofwrinkle of 0.035 percentage points. ⇓
  • That’s a month ofwrinkle of 0.245 percentage points. ⇓

Another fixed rate option is a 15 year mortgage. The payback period is shorter, so the monthly payments are higher than for a 30-year loan of the same amount. However, the interest rate is usually lower, so even with larger payments, the mortgage will not cost as much overall because you will be paying less interest.

Mortgage rates today: 5/1 jumbo variable rate mortgage rates

  • The 5/1 ARM rate is 2.151%.
  • This is a day ofwrinkle of 0.025 percentage points. ⇓
  • That’s a month ofwrinkle of 0.106 percentage points. ⇓

An alternative are adjustable rate mortgages. For the first few years after taking out an ARM, you pay a fixed introductory rate. After the introductory period (sometimes referred to as a “teaser”), the interest rate becomes variable and regularly adjusts to market conditions. For example, if you opt for a 5/1 ARM, the interest rate is fixed for the first five years and then adjusted annually. You can also opt for a 7/1 ARM, a 10/1 ARM, or a number of other terms. ARMs generally have a total life of 30 years.

Mortgage rates today: VA, FHA, and jumbo loan rates

The average interest rates on FHA, VA, and Jumbo loans are:

  • The interest rate on a 30 year FHA mortgage is 2.965%. ⇓
  • The interest rate on a 30 year VA mortgage is 3.017%. ⇓
  • The interest rate on a 30 year jumbo mortgage is 3.382%. ⇓

Mortgage Refinance Rates Today

The average interest rates for 30 year loans, 15 year loans, and 5/1 jumbo ARMs are:

  • The refinancing rate for a 30-year fixed-rate refinancing is 3.51%. ⇓
  • The refinancing rate for a 15-year fixed-rate refinancing is 2.497%. ⇓
  • The refinancing rate for a 5/1 Jumbo ARM is 2.412%. ⇓
  • The refinancing rate for a 7/1 compliant ARM is 4.281%. ⇓
  • The refinancing rate on a 10/1 compliant ARM is 4.194%. ⇓
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Average mortgage refinancing rates

Data is based on U.S. mortgage loans completed on 7/20/2021

Credit type 20th of July Last week change
15 years firmly conventional 2.5% 2.62% 0.12%
Firmly conventional for 30 years 3.51% 3.71% 0.2%
7/1 ARM rate 4.28% 4.24% 0.04%
10/1 ARM rate 4.19% 4.46% 0.27%

Your actual price may differ

Where are mortgage rates going this year?

Mortgage rates fell by 2020. Millions of homeowners responded to the low mortgage rates by refinancing existing loans and taking out new ones. Many people bought houses that they might not have been able to afford at higher prices.

In January 2021, rates briefly fell to their lowest level on record, but trended higher during the month and into February.

Looking ahead, experts assume that interest rates will continue to rise in 2021, but modestly. Factors that could affect rates include how quickly the COVID-19 vaccines will be distributed and when lawmakers can agree on another economic aid package. More vaccinations and government incentives could lead to improved economic conditions, which would raise rates.

While mortgage rates are likely to rise this year, experts say the rise won’t come overnight and won’t be a dramatic jump. Interest rates should stay near historically low levels in the first half of the year and rise slightly later in the year. Even with rising interest rates, it will still be a good time to finance or refinance a new home.

Some of the factors that affect mortgage rates include:

  • The Federal Reserve. When the pandemic hit the United States in March 2020, the Fed took swift action. The Fed announced plans to keep money flowing through the economy by lowering the Federal Fund’s short-term interest rate to 0% to 0.25%, which is as low as they go. The central bank also promised to buy mortgage-backed securities and government bonds to prop up the real estate finance market. The Fed has confirmed its commitment to this policy several times for the foreseeable future, most recently at a monetary policy meeting at the end of January.
  • The 10-year treasury note. Mortgage rates are moving in lockstep with the yields on the government’s 10-year government bond. Yields fell below 1% for the first time in March 2020 and have been rising slowly since then. Yields are currently above 1% since the beginning of the year, which is driving interest rates up slightly. On average, there is typically a 1.8 point spread between Treasury yields and benchmark mortgage rates.
  • The wider economy. Unemployment rates and changes in gross domestic product are important indicators of the overall health of the economy. Low employment and GDP growth means the economy is weak, which can drive interest rates down. Thanks to the pandemic, unemployment hit an all-time high early last year and has not yet recovered. GDP also fell, and although it has recovered somewhat, there is still plenty of room for improvement.

Tips for the lowest possible mortgage rate

There is no one universal mortgage rate that all borrowers get. Qualifying for the lowest mortgage rates takes a bit of work and depends on both personal financial factors and market conditions.

Check your credit history and credit report. Mistakes or other warning signs that can drag your creditworthiness down. Borrowers with the highest creditworthiness get the best interest rates. Therefore, it is important to check your credit report before you start looking for a home. Taking steps to fix bugs can increase your score. If you have a high credit card balance, paying off can be a quick boost too.

Save money on a sizeable down payment. This will lower your loan-to-value ratio, ie how much of the house price the lender has to finance. A lower LTV usually means a lower mortgage rate. Lenders also want to see money that has been stored in an account for at least 60 days. It tells the lender that you have the money to finance the home purchase.

Shop around for the best price. Don’t settle for the first rate a lender offers you. Check with at least three different lenders to see who offers the lowest interest rates. In addition to traditional banks, consider different types of lenders, such as credit unions and online lenders.

Also, take the time to read up on the different types of credit. While the 30 year fixed rate mortgage is the most common mortgage, you should consider a shorter term loan such as a 15 year loan or an adjustable rate mortgage. These types of loans often come with a lower interest rate than a traditional 30 year mortgage. Compare the cost of each to see which one best fits your needs and financial situation. Government loans – such as those supported by the Federal Housing Authority, the Department of Veterans Affairs, and the Department of Agriculture – can be cheaper options for those who qualify.

Finally, secure your tariff. If you lock your interest rate once you find the right interest rate, loan product, and lender, then you can make sure that your mortgage rate does not go up before you take out the loan.

Our mortgage rate method

Money Daily Mortgage Rates show the average rate offered by over 8,000 lenders in the United States for whom the latest business daily rates are available. Today we are showing the prices for Tuesday, July 20th, 2021. Our interest rates reflect what a typical borrower with a credit score of 700 currently expects to pay for a home loan. These prices were offered to people off 20% and include discount points.

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