Today’s mortgage and refinance rates
Average mortgage rates rose yesterday. It was the first increase in more than a week. And it has barely affected recent falls.
Unfortunately, this climb may not be the last. And I expect the 2021 upward trend likely to resume immediately. So Mortgage rates could go up slightly next week. Let’s hope I’m wrong – just like I was when I made the same prediction last week.
Current mortgage and refinancing rates
|program||Mortgage rates||APR *||change|
|Conventional set for 30 years||3,238%.||3,243%.||+ 0.12%|
|Conventional 15 years fixed||2,438%.||2.556%.||+ 0.06%|
|Conventional set for 20 years||2.875%.||2.967%.||+ 0.09%|
|Conventional 10 years fixed||1,982%.||2.214%.||+ 0.01%|
|Fixed FTA for 30 years||2,961%.||3,624%.||+ 0.02%|
|Fixed FTA for 15 years||2.72%.||3,307%.||+ 0.01%|
|5 years ARM FHA||2.606%.||3,254%.||+ 0.01%|
|30 years permanent VA||2.625%.||2.8%.||+ 0.02%|
|15 years fixed VA||2,367%.||2,689%.||+ 0.12%|
|5 years ARM VA||2.5%.||2,392%.||Unchanged|
|Prices are provided by our partner network and may not reflect the market. Your rate could be different. Click here for a personalized price offer. See our tariff assumptions Here.|
COVID-19 Mortgage Updates: Mortgage lenders are changing interest rates and rules due to COVID-19. For the latest information on how coronavirus can affect your home loan, Click here.
Should You Lock A Mortgage Rate Today?
Some economists have attributed this week’s falls to technical reasons. Large investors often use the end of each calendar quarter to re-evaluate and rebalance their portfolios. And they could be responsible for lower rates.
In this case the rest is only temporary. And yesterday’s climb could herald a resumption (now or soon) of the uptrend. Read on for why the underlying drivers of this trend continue to be strong.
So my recommendations remain:
- LOCK when you approach 7th Days
- LOCK when you approach 15th Days
- LOCK when you approach 30th Days
- LOCK when you approach 45 Days
- LOCK when you approach 60 Days
With so much uncertainty right now, however, your instincts could easily prove to be as good as mine – or better. So let your gut and your personal risk tolerance guide you.
What is driving current mortgage rates?
We all want to believe that this week’s fall in mortgage rates was the start of a new trend that will bring new lows of all time. But I’m afraid that is unlikely.
The explanation I offered earlier (investors rebalancing their portfolios towards the end of the quarter) seems more likely to me. And other factors could have contributed.
For example, some economic data has been disappointing lately. Indeed, if this data suggests underlying issues, we could see more rate cuts. However, most of these numbers were due to extreme weather conditions in February (think Texas) rather than ongoing economic troubles.
Of course we have, especially in employment. But the economic recovery seems to be accelerating and is likely to boom. And as long as investors see this, they are likely to raise mortgage rates. Without a catastrophic event to undermine the recovery, we are likely to face months of rebound.
Do not despair. If you had only told your parents or grandparents in 2008 that you would one day have a mortgage with an interest rate that starts with a 3, they would have thought you were delusional. And by historical standards, today’s rates are still ridiculously low.
Economic reports next week
Friday is the big day again next week. At that time, the monthly employment report will be published. And that is probably the most important report of all at the moment.
Investors and analysts are less interested in next week’s other reports. Unless they are very different from expectations. Even smaller reports can move markets if they contain unexpected news.
Here are next week’s key economic reports:
- Tuesday – January Case-Shiller National House Price Index and March Consumer Confidence Index
- Wednesday – March ADP Employment Report (Private Sector Jobs)
- Thursday – Weekly new unemployment insurance entitlements. Plus March Institute for Supply Management (ISM) manufacturing index and auto sales with construction spending in February
- Employment report from Friday to March, consisting of wages and salaries outside of agriculture, unemployment rate and average hourly wage
Typically, the markets react to unexpectedly good news with higher mortgage rates. You usually see lower rates when the numbers are bad. But it takes a lot to get them far.
Mortgage rates forecast for next week
Unfortunately, I’m assuming that we will look back and see this week’s falls as little twirls in a graphical line that continues upwards. In other words, I guess Mortgage rates are likely to rise again next weekalthough a few days of falls would not be surprising.
Mortgage and refinance rates usually move together. Note, however, that refinancing rates are currently slightly higher than those for purchase mortgages. This gap is likely to remain constant as it changes.
Meanwhile, a recent change in regulations has made most investment property and vacation home mortgages more expensive.
How is your mortgage rate determined?
Mortgage and refinancing rates are generally determined by the prices on a secondary market (similar to stock or bond markets) where mortgage-backed securities are traded.
And that depends a lot on the economy. Therefore, mortgage rates are typically high when things are going well and low when the economy is in trouble.
However, they play a huge role in determining your own mortgage rate in five ways. You can significantly affect it by:
- Shopping for Your Best Mortgage Rate – They vary widely from lender to lender
- Boost Your Credit Score – Even a small bump can make a big difference to your rate and payments
- Save the biggest down payment you can – lenders like you have real skin in this game
- Keep Your Other Loans Modest – The lower your other monthly obligations, the larger the mortgage you can afford
- Carefully Choosing Your Mortgage – Are You Better Off With a Conventional, FHA, VA, USDA, Jumbo, or Any Other Loan?
If you spend these ducks in a row you can win lower rates.
Remember, it’s not just a mortgage rate
Be sure to consider all of your upcoming home ownership costs when figuring out what a mortgage you can afford. So concentrate on your “PITI” P.rincipal (pays out the borrowed amount), Interest (the price of borrowing), (property) T.Axes and (homeowners) IInsurance. Our Mortgage calculator can help with that.
Depending on your type of mortgage and the amount of your down payment, you may also need to purchase mortgage insurance. And that can easily reach three digits every month.
But there are other potential costs. So you have to pay homeowners association membership fees if you choose to live with an HOA anywhere. And wherever you live, you should expect repair and maintenance costs. There is no landlord who calls when something goes wrong!
After all, you have a hard time forgetting about closing costs. You can see this in the Annual Percentage (APR) you provide. Because that effectively spreads them out over the life of your loan and makes them higher than your direct mortgage rate.
However, you may be able to get help with these closing costs and Your deposit, especially if you are a first time buyer. Read:
Mortgage rate method
The mortgage reports get interest rates based on selected criteria from multiple credit partners every day. We’ll find an average rate and an annual interest rate for each type of loan that we want to show on our chart. Since we calculate a series of average prices, this will give you a better idea of what you might find in the market. We also calculate average interest rates for the same types of loans. For example, FHA was fixed with FHA. The end result is a good snapshot of the daily rates and how they change over time.