Several benchmark mortgage rates tapered off today. The average rates on 30-year fixed and 15-year fixed mortgages both decreased. Meanwhile, the average rate on 5/1 adjustable-rate mortgages climbed higher.
Today’s mortgage interest rates
Loan term Today’s Rate Last week Change
30-year mortgage rate 3.02% 3.07% -0.05
15-year mortgage rate 2.50% 2.63% -0.13
30-year jumbo mortgage rate 3.07% 2.98% +0.09
30-year mortgage refinance rate 3.16% 3.06% +0.10
Rates accurate as of November 12, 2020.
Rates for mortgages are constantly changing, but they have remained in a historically low range for quite some time. If you’re in the market for a mortgage, it could make sense to lock if you see a rate you like. Just make sure you’ve looked around for the best rate first.
Find the right mortgage rate for your specific criteria.
The average rate you’ll pay for a 30-year fixed mortgage is 3.02 percent, down 5 basis points since the same time last week. This time a month ago, the average rate on a 30-year fixed mortgage was unchanged, at 3.02 percent.
At the current average rate, you’ll pay principal and interest of $422.68 for every $100,000 you borrow. That’s down $2.71 from what it would have been last week.
You can use Bankrate’s mortgage calculator to figure out your monthly payments and find out how much you’ll save by adding extra payments. It will also help you computehow much interest you’ll pay over the life of the loan.
15-year fixed mortgages
The average 15-year fixed-mortgage rate is 2.50 percent, down 13 basis points from a week ago.
Monthly payments on a 15-year fixed mortgage at that rate will cost around $667 per $100,000 borrowed. Yes, that payment is much bigger than it would be on a 30-year mortgage, but it comes with some big advantages: You’ll come out several thousand dollars ahead over the life of the loan in total interest paid and build equity much more quickly.
The average rate on a 5/1 ARM is 3.04 percent, adding 1 basis point over the last week.
These types of loans are best for those who expect to sell or refinance before the first or second adjustment. Rates could be much higher when the loan first adjusts, and thereafter.
Monthly payments on a 5/1 ARM at 3.04 percent would cost about $424 for each $100,000 borrowed over the initial five years, but could climb hundreds of dollars higher afterward, depending on the loan’s terms.
When to lock your mortgage rate
A rate lock guarantees your mortgage interest rate for a specified period of time. Lenders often offer 30-day rate locks for a nominal fee or roll the price of the lock into your loan. Some lenders will lock rates for longer periods, sometimes for more than 60 days, but those locks can be pricey. In today’s unstable market, some lenders will lock an interest rate for only two weeks to avoid unnecessary risk.
The benefit of a rate lock is that if interest rates rise, you’re locked into the guaranteed rate. You may be able to find a lender that offers a floating rate lock. A floating rate lock lets you get a lower rate if interest rates decline before closing your loan. It could be worth the cost in a declining rate environment. Because mortgage rates are not predictable, there’s no guarantee that rates will stay where they are from week to week or even day to day. So, if you can lock in a low rate, then you should do so rather than gamble on interest rates falling even lower.
Remember: During the pandemic, all aspects of real estate and mortgage closings are taking much longer than usual. Expect the closing on a new mortgage to take at least 60 days, and expect refinancing to take at least a month.
Factors that influence mortgage rates
A number of economic factors influence mortgage rates. Among them are inflation and unemployment. Higher inflation typically leads to higher mortgage rates. The opposite is also true; when inflation is low, mortgage rates typically are as well. As inflation increases, the dollar loses value. That drives investors away from mortgage-backed securities (MBS), which causes the prices to decrease and yields to increase. When yields move higher, rates become more expensive for borrowers.
A strong economy usually means more people buying homes, which drives demand for mortgages. This increased demand can push rates higher. The opposite is also true; less demand can trigger a drop in rates.
Are mortgage rates rising or falling?
Mortgage rates have fallen to record lows in recent months. Where they’ll go from here is nearly impossible to predict. The direction of rates depends largely on the direction of the economy. It also depends on how well the coronavirus pandemic is contained. The general consensus: If the economy continues to bounce back, and if drugmakers are successful in developing a vaccine, rates will rise. On the other hand, if the economy struggles because of coronavirus-related setbacks, mortgage rates will remain at record lows or fall even further.
How do mortgage rates affect homebuyers?
In a housing boom, low mortgage rates can present pros and cons for borrowers. One pro: Low rates give borrowers more buying power. A $300,000 loan at 4 percent equates to a monthly payment of $1,432. If rates fall to 3 percent, the payment plunges to $1,265.
One downside, however, is that a significant decline in mortgage rates can help push up home prices. Indeed, home values have increased in recent months.
Here’s one way to see the offsetting effects of soaring home prices and plunging mortgage rates. Say you decided not to buy a $300,000 home a year ago, when the 30-year mortgage rate was at about 3.75 percent. Your down payment at 20 percent would have been $60,000, and your monthly payment would have been $1,111.
Today, the price of the same home has jumped to $335,000, but you can land a 30-year loan at 3 percent. As a result, your monthly payment rises only slightly, to $1,130. However, you’ll have to come up with an extra $7,000 to make a 20 percent down payment.
Is now a good time to buy a house?
The answer to “is now a good time to buy a house?” is never straightforward, regardless of the housing and mortgage rate environment. It always depends. Do you have a steady income, good credit and money saved for a down payment and repairs? If the answer to all of those is yes, you’re ready to buy.
However, the pandemic has led to an even greater shortage of homes. That’s caused a bidding war and rising prices. Those trends mean it can be a frustrating market for buyers.
To learn more about the different rate averages Bankrate publishes, see “Understanding Bankrate’s on-site rate averages.”
Other daily news articles:
Refinance interest rates today
Current 30-year mortgage and refinance rates
Shopping for the right lender?
Homebridge Financial Services Mortgage Review
Valley National Bank Mortgage Review
BB&T Mortgage Review
Sebonic Financial Mortgage Review
Explore other loan types
LOAN TERM PURCHASE RATES REFINANCE RATES
The table above links out to loan-specific pages to help our readers learn more about rates by product type.
30-Year Loan Current 30 Year Mortgage Rates Current 30 Year Refinance Rates
20-Year Loan 20-Year Mortgage Interest Rates 20-Year Mortgage Refinance Rates
15-Year Loan Today’s 15-Year Mortgage Rates 15-Year Mortgage Refinance Rates
10-Year Loan 10-Year Fixed Mortgage Rates Current 10-Year Refinance Rates
FHA Loan FHA Mortgage Interest Rates FHA Refinance Rates
VA Loan VA Loan Rates Current VA Refinance Rates
ARM Loan ARM Interest Rates ARM Refinance Interest Rates
Jumbo Loan Current Jumbo Mortgage Rates Jumbo Loan Refinance Rates
Methodology: The rates you see above are Bankrate.com Site Averages. These calculations are run after the close of the previous business day and include rates and/or yields we have collected that day for a specific banking product. Bankrate.com site averages tend to be volatile — they help consumers see the movement of rates day to day. The institutions included in the “Bankrate.com Site Average” tables will be different from one day to the next, depending on which institutions’ rates we gather on a particular day for presentation on the site.