The average rate on a 30-year fixed-rate mortgage ended the week at 3.323%, an increase of 0.023 percentage points from Monday and the highest average rate since late August. The rates on most other types of loans also increased during the week.
Even with today’s higher rates, qualified buyers considering a new mortgage or refinancing their current home loan should be able to find attractive low interest rates and comfortable monthly payments.
- The latest rate on a 30 year fixed rate mortgage is 3.323%.
- The last rate on a 15 year fixed rate mortgage is 2.427%.
- The latest rate on a Jumbo ARM 5/1 is 2.193%.
- The latest rate on a 7/1 compliant ARM is 3.048%.
- The latest rate on a 10/1 compliant ARM is 3.986%.
Money’s daily mortgage rates reflect what a borrower with a 20% down payment and a 700 credit score – roughly the national average – could pay if they applied for a home loan right now. Daily rates are based on the average rate of 8,000 lenders offered to applicants on the previous business day. Freddie Mac’s weekly rates will generally be lower, as they measure the rates offered to borrowers with a higher credit rating.
Current mortgage rates: 30-year fixed rate mortgage rates
- The 30-year rate is 3.323%.
- It’s a day infold by 0.071 percentage point. ??
- It’s a month infold by 0.009 percentage point. ??
The most common type of mortgage loan is a fixed rate loan. With this type of mortgage, interest rates and monthly payments will be stable and predictable for as long as you pay off the loan. The most common of all is the 30-year fixed rate mortgage, as its long repayment period results in lower and more affordable payments compared to a shorter loan. On the flip side, the interest rate tends to be higher, so you’ll pay more over time.
Current mortgage rates: 15 years fixed rate mortgage rates
- The 15-year rate is 2.427%.
- It’s a day infold by 0.052 percentage point. ??
- It’s a month offold by 0.003 percentage point. ??
The monthly payments for a 15-year fixed-rate loan will be higher than for a 30-year loan of a similar size since a 15-year fixed-rate loan will be repaid in half the time. The interest rate will be lower, however, so you won’t pay as much over the life of the loan. Some borrowers who can afford higher payments like the idea of getting out of debt faster and for less money.
Current mortgage rates: jumbo variable rate mortgage rates 5/1
- The ARM 5/1 rate is 2.193%.
- It is unchanged from yesterday’s rate. ??
- It’s a month offold by 0.014 percentage point. ??
Variable rate mortgages start with a low introductory or “teaser” rate that stays fixed for a number of years. After that, the rates are reset at specific intervals. If your rate increases, your monthly payment also increases. A 5/1 ARM, for example, will have a fixed rate for five years and then adjust each year until the loan is paid off. You can choose from a number of different terms, including an ARM 7/1 and an ARM 10/1.
Current mortgage rates: VA, FHA and jumbo loan rates
The average rates for FHA, VA and jumbo loans are:
- The rate on a 30-year FHA mortgage is 3.047%. ??
- The rate for a 30-year VA mortgage is 3.074. ??
- The rate for a 30-year jumbo mortgage is 3.42%. ??
Current mortgage refinancing rates
The average rates for 30-year, 15-year and 5/1 jumbo ARM loans are:
- The refinance rate on a 30 year fixed rate refinance is 3.49%. ??
- The refinance rate on a 15 year fixed rate refinance is 2.538%. ??
- The refinancing rate on a Jumbo ARM 5/1 is 2.467. ??
- The refinancing rate on a 7/1 compliant ARM is 3.839%. ??
- The refinancing rate on a 10/1 compliant ARM is 4.139. ??
Where Are Mortgage Rates Going This Year?
Mortgage rates fell through 2020. Millions of homeowners responded to low mortgage rates by refinancing existing loans and taking out new ones. Many people have bought homes that they might not have been able to afford if the rates were higher.
In January 2021, rates briefly fell to all-time low levels, but tended to rise throughout the month and into February.
Looking ahead, experts believe that interest rates will rise further in 2021, but modestly. Factors that could influence the rates include how quickly COVID-19 vaccines are distributed and when lawmakers can agree on another cost-effective relief package. More vaccinations and government stimulus could lead to improved economic conditions, which would increase rates.
Although mortgage rates are likely to rise this year, experts say the increase will not happen overnight and it will not be a dramatic jump. Rates are expected to stay near their historically low levels throughout the first half of the year, rising slightly later in the year. Even with rates rising, this will still be a good time to finance a new home or refinance a mortgage.
Factors that influence mortgage rates include:
- The Federal Reserve. The Fed took swift action when the pandemic hit the United States in March 2020. The Fed announced plans to move money through the economy by lowering the Federal Fund’s short-term interest rate between 0% and 0.25%, which is as low as they go. The central bank has also committed to buying mortgage-backed securities and treasury bills, thereby supporting the housing finance market. The Fed has reaffirmed its commitment to these policies for the foreseeable future on several occasions, most recently at a policy meeting in late January.
- The 10-year Treasury note. Mortgage rates move at the same pace as the yields on 10-year government treasury bills. Yields fell below 1% for the first time in March 2020 and have slowly risen since then. Currently, yields have hovered above 1% year-to-date, pushing interest rates up slightly. On average, there is typically a 1.8 point “spread” between Treasury yields and benchmark mortgage rates.
- The economy in the broad sense. Unemployment rates and changes in gross domestic product are important indicators of the overall health of the economy. When employment and GDP growth are low, it means the economy is weak, which can lower interest rates. Thanks to the pandemic, unemployment levels hit historic highs early last year and have yet to recover. GDP has also been affected, and although it has rebounded somewhat, there is still a lot of room for improvement.
Tips for getting the lowest mortgage rate possible
There is no universal mortgage rate that all borrowers receive. Qualifying for the lowest mortgage rates takes a bit of work and will depend on both personal financial factors and market conditions.
Check your credit score and your credit report. Mistakes or other red flags that can lower your credit score. The borrowers with the highest credit scores will get the best rates, so it’s essential to check your credit report before you begin the home search process. Taking action to correct mistakes will help increase your score. If you have high credit card balances, paying them off can also give you a quick boost.
Save money for a large down payment. This will lower your loan-to-value ratio, which means how much of the home’s price the lender has to finance. A lower LTV usually results in a lower mortgage rate. Lenders also like to see money that has been saved in an account for at least 60 days. It tells the lender that you have the money to finance the purchase of the house.
Shop around for the best rate. Don’t settle for the first interest rate a lender offers you. Check with at least three different lenders to see who is offering the lowest interest rate. Also consider the different types of lenders, such as credit unions and online lenders, in addition to traditional banks.
Also take the time to learn about the different types of loans. While the 30-year fixed-rate mortgage is the most common type of mortgage, consider a shorter-term loan such as a 15-year loan or an adjustable rate mortgage. These types of loans often have a lower rate than a conventional 30-year mortgage. Compare everyone’s costs to see which one best suits your needs and your financial situation. Government loans – such as those backed by the Federal Housing Authority, the Department of Veterans Affairs, and the Department of Agriculture – may be more affordable options for those who qualify.
Finally, lock in your rate. Locking in your rate once you’ve found the right rate, the right loan product, and the lender will help ensure that your mortgage rate doesn’t increase until the loan closes.
Our mortgage rate methodology
Money’s Daily Mortgage Rates show the average rate offered by over 8,000 lenders in the United States for which the most recent rates are available. Today, we are posting the prices for Thursday, September 23, 2021. Our rates reflect what a typical borrower with a credit score of 700 can expect to pay on a home loan right now. These rates were offered to people with a 20% deposit and include reduction points.