Mortgage rates are back below 3.3% after ending an uptrend last week. The interest rate on a 30-year fixed-rate mortgage averages 3.27%, down 0.034 percentage points from Friday. Other credit categories are also lower today, with the exception of the unchanged 5/1 purchase and refinancing loans.
- The most recent interest rate on a 30-year fixed-rate mortgage is 3.27%.
- The most recent interest rate on a 15-year fixed-rate mortgage is 2.356%.
- The latest rate on a 5/1 Jumbo ARM is 2.216%.
- The latest rate on a 7/1 compliant ARM is 4.206%.
- The latest rate on a 10/1 compliant ARM is 4.264%.
Mortgage Rates Today: 30 Year Fixed Rate Mortgages
- The 30-year rate is 3.27%.
- This is a day fromwrinkle of 0.034 percentage points. ⇓
- That’s a month fromwrinkle of 0.155 percentage points. ⇓
The interest rate and monthly payments on fixed-rate mortgages remain stable and predictable throughout the life of the loan. A 30 year mortgage is the most common choice because of its long payback period and relatively low monthly payments. However, the interest rate on a 30 year loan is higher than the interest rate on a shorter term loan, so you will be spending more money on interest payments.
Mortgage rates today: 15 years fixed rate Mortgage rates
- The 15 year rate is 2.356%.
- This is a day fromwrinkle of 0.022 percentage points. ⇓
- That’s a month fromwrinkle of 0.135 percentage points. ⇓
A shorter term fixed rate option is a 15 year fixed rate mortgage. With a payback period that is half that of a 30 year, the monthly payments are higher for a 15 year. On the flip side, the interest rate is typically lower, which means that despite making higher payments, you are actually paying less on the loan because you are paying less interest.
Mortgage rates today: 5/1 jumbo variable rate mortgage rates
- The 5/1 ARM rate is 2.216%.
- That is unchanged From Friday. ⇔
- That’s a month fromwrinkle of 0.057 percentage points. ⇓
Another option are adjustable rate mortgages. They have a fixed introductory price that becomes variable after a certain number of years. The monthly payments also start out fixed and then change as the rate changes.
For example, a 5/1 variable rate loan has a fixed rate and monthly payments for the first five years. Thereafter, the rate is reset annually. ARMs are available on a variety of terms, including 7/1 and 10/1, and are usually repaid in 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 3.025%. ⇓
- The interest rate on a 30 year VA mortgage is 3.079%. ⇓
- The interest rate on a 30 year jumbo mortgage is 3.427%.
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 3.509%. ⇓
- The refinancing rate for a 15-year fixed-rate refinancing is 2.507%. ⇓
- The refinancing rate for a 5/1 Jumbo ARM is 2.496%. ⇔
- The refinancing rate for a 7/1 compliant ARM is 4.522%. ⇓
- The refinancing rate on a 10/1 compliant ARM is 4.544%. ⇓
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, 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. Locking your interest rate in place once you find the right interest rate, loan product, and lender can help ensure 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’re showing prices for Friday, July 23, 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.