Multiple benchmark mortgage rates fell today. The average rates on 30-year fixed and 15-year fixed mortgages both slid down. The average rate on 5/1 adjustable-rate mortgages, or ARMs, the most popular type of variable rate mortgage, held steady.
Current average mortgage interest rates
Loan type Interest rate A week ago Change
30-year fixed rate 2.96% 3.04% -0.08
15-year fixed rate 2.47% 2.51% -0.04
30-year fixed jumbo rate 2.97% 3.10% -0.13
30-year fixed refinance rate 3.09% 3.21% -0.12
Rates last updated on November 17, 2020. These rates are averages based on the assumptions shown here. Actual rates on-site may vary.
Rates for mortgages are in a constant state of flux, but they have remained in a historically low range for quite some time. If you’re in the market for a mortgage, it could be a great time to lock in a rate. Just be sure to shop around.
Find the right mortgage rate for your specific criteria.
The average rate for a 30-year fixed mortgage is 2.96 percent, a decrease of 8 basis points over the last week. Last month on the 17th, the average rate on a 30-year fixed mortgage was higher, at 3.04 percent.
At the current average rate, you’ll pay $419.45 per month in principal and interest for every $100,000 you borrow. That’s down $4.31 from what it would have been last week.
You can use Bankrate’s mortgage payment calculator to figure out your monthly payments and see what the effects of making extra payments would be. It will also help you calculate how much interest you’ll pay over the life of the loan.
15-year fixed mortgages
The average 15-year fixed-mortgage rate is 2.47 percent, down 4 basis points over the last seven days.
Monthly payments on a 15-year fixed mortgage at that rate will cost around $665 per $100,000 borrowed. The bigger payment may be a little harder to find room for in your monthly budget than a 30-year mortgage payment would, 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 faster.
5/1 Adjustable Rate Mortgage Rates
The average rate on a 5/1 adjustable rate mortgageis 3.04 percent, unchanged over the last 7 days.
These loan types are best for people who expect to sell or refinance before the first or second adjustment. Rates could be materially 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 increase by hundreds of dollars afterward, depending on the loan’s terms.
Should you lock a 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 of time, even exceeding 60 days, but those locks can be expensive. In today’s volatile market, some lenders will lock an interest rate for just two weeks because they don’t want to take on unnecessary risk.
With a rate lock, 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 there is no guarantee of where mortgage rates will head in the future, it may be smart to lock in a low rate instead of holding out on rates for potentially decline further.
Keep in mind that 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, with refinancing taking at least a month.
What causes mortgage rates to change
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.
Current mortgage rate landscape
Mortgage rates have been volatile because of the COVID-19 pandemic. Generally, though, rates have been low. For a while, some lenders were increasing rates because they were struggling to deal with the demand. In general, however, rates are consistently below 4 percent and even dipping into the mid to low 3s. This is an especially good time for people with good to excellent credit to lock in a low rate for a purchase loan. However, lenders are also raising credit standards for borrowers and demanding higher down payments as they try to dampen their risks.
Are mortgage rates rising or falling?
Mortgage rates have hovered around all-time lows in recent months, but where they go from here is nearly impossible to predict. Much depends on the direction of the economy, and how well public health officials can contain the coronavirus pandemic. The general consensus: If the economy continues to bounce back, and if drugmakers are successful in developing a vaccine, rates will rise. However, if the economy suffers pandemic-related setbacks, rates will stay low or even fall further.
How do mortgage rates affect homebuyers?
In this housing boom, mortgage rates have been a mixed bag for buyers. 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 an example to show how soaring home prices and plunging mortgage rates can have offsetting effects. Let’s say you chose not to buy a $300,000 home a year ago, when the 30-year mortgage rate was around 3.75 percent. Your 20 percent down payment would’ve been $60,000 and your monthly payment would’ve been $1,111.
The price of the same house has jumped to $335,000 today. However, you can get a 30-year mortgage 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?
There’s never a straightforward answer to this question. It always depends. Do you have a reliable income, a good credit score and money saved for a down payment and repairs? If you can answer all of those questions affirmatively, 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 average rates.”
Other daily news articles:
Refinance interest rates today
Today’s 30-year mortgage rates
Searching for the right mortgage lender?
Optimum First Mortgage Review
Valley National Bank Mortgage Review
CityWorth Mortgage Review
Wyndham Capital Mortgage Review
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.