The average rate on a 30-year fixed-rate loan ended the week at 3.431%, 0.038 percentage points lower than on Monday. The 30-year refinance rate was also down from the start of the week, standing at 3.576%.
Rates were lower overall despite a mid-week hike that took the 30-year rate above 3.5% for the first time since June. Yet compared to interest rates a month ago, the general rate movement has been higher.
For well-qualified borrowers who are considering buying a home or refinancing their current mortgage, now is a good time to secure competitive rates and low monthly payments.
- The latest rate on a 30 year fixed rate mortgage is 3.431%.
- The last rate on a 15 year fixed rate mortgage is 2.506%.
- The latest rate on a Jumbo ARM 5/1 is 2.412%.
- The latest rate on a 7/1 compliant ARM is 3.253%.
- The latest rate on a 10/1 compliant ARM is 3.778%.
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 3.431%.
- It’s a day offold by 0.058 percentage point. ??
- It’s a month infold by 0.175 percentage points. ??
Fixed rate loans are the most common type of mortgage loan. Borrowers love stable interest rates and monthly payments. Of all the loan terms available, the 30-year rate is the most popular due to its long payback period – monthly payments will be lower than on a shorter term loan. The interest rate will be higher, however, so you will pay more for the 30 year long term loan.
Current mortgage rates: 15 years fixed rate mortgage rates
- The 15-year rate is 2.506%.
- It’s a day offold by 0.037 percentage point. ??
- It’s a month infold by 0.158 percentage points. ??
The shorter term of a 15-year fixed rate mortgage means that the monthly payments will be higher than with a 30-year mortgage of the same amount. On the upside, the interest rate will usually be lower, so you won’t be paying that much over the life of the loan.
Current mortgage rates: jumbo variable rate mortgage rates 5/1
- The ARM 5/1 rate is 2.412%.
- It’s a day offold by 0.031 percentage point. ??
- It’s a month infold by 0.192 percentage points. ??
Variable rate mortgages will have a low introductory or “teaser” rate that will be fixed for the first few years of the loan. Once the introductory period is over, the rate will begin to adjust to market conditions and change at regular intervals. The monthly payments will start on a fixed basis and then change when the rate changes.
For example, the interest rate on an ARM 5/1 will be fixed for five years and then change each year thereafter. You can choose from a number of different ARM terms and the loan is typically structured to be paid off in 30 years.
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 3.121%. ??
- The rate for a 30-year VA mortgage is 3.153. ??
- The rate for a 30-year jumbo mortgage is 3.595%. ??
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 3.576%. ??
- The refinance rate on a 15 year fixed rate refinance is 2.609%. ??
- The refinancing rate on a Jumbo ARM 5/1 is 2.709%. ??
- The refinancing rate on a 7/1 compliant ARM is 3.875%. ??
- The refinancing rate on a 10/1 compliant ARM is 4.056%. ??
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 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, October 14, 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 contributing 20% and include discount points.