30-year mortgage rate falls to new record low this week

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Mortgage rates dipped slightly this week to record lows. The average 30-year fixed-rate loan fell to 3.03 percent from 3.06 percent, according to Bankrate’s weekly survey of large lenders.

The 30-year fixed mortgages in this week’s survey had an average total of 0.36 discount and origination points.

Over the past 52 weeks, the 30-year fixed has averaged 3.54 percent. This week’s rate is 0.45 percentage points lower than the 52-week average.

  • The 15-year fixed-rate mortgage fell to 2.46 percent.
  • The 5/1 adjustable-rate mortgage fell to 3.01 percent.
  • The 30-year fixed-rate jumbo mortgage fell to 3.49 percent.

At the current 30-year fixed rate, you’ll pay $422 each month for every $100,000 you borrow.

At the current 15-year fixed rate, you’ll pay $665 each month for every $100,000 you borrow.

At the current 5/1 ARM rate, you’ll pay $422 each month for every $100,000 you borrow.

Results of Bankrate.com’s weekly national survey of large lenders conducted October 28, 2020 and the effect on monthly payments for a $165,000 loan:

Weekly national mortgage survey
Breakdown 30-year fixed 15-year fixed 5-year ARM
This week’s rate: 3.03% 2.46% 3.01%
Change from last week: -0.03 -0.01 -0.08
Monthly payment: $698 $1,097 $697

Where mortgage rates are headed

In the week ahead (Oct. 29-Nov. 4), 21 percent of the experts on Bankrate’s panel predict rates will remain the same, while 14 percent expect rates to rise and 64 percent think rates will fall.

“Market volatility and a lack of forthcoming stimulus will push rates down a bit, at least until Election Day,” says Greg McBride, chief financial analyst, Bankrate.com.

“Lower. The wild wild west! The 10-year yield was at 0.88% on Friday, and news of higher covid cases, soft lockdowns in Europe, and the possibility of the Republicans holding the Senate have driven yields down toward 0.75% as stocks sell-off Wednesday morning. Headline risk is in play on steroids, so this can reverse quickly, but we are nearing a key level on the 10-year yield; we can close under 0.69% yields can go lower faster. Keep an eye out for that level on the 10-year yield,” said Logan Mohtashami, housing analyst, HousingWire, Irvine, California

There’s never been a better time to get a purchase mortgage or refinance

Rates are at a record low and are expected to stay this way for a while. You can see the forecast from various experts for the year ahead here.

That means more and more homeowners can refinance to cut their monthly mortgage payments. However, refinancing comes with costs that you must make up if you are to profit from a refi. Bankrate has a calculator to help you decide whether refinancing is a good idea.

Related story: As mortgage rates fall to record lows, beware high closing costs.

Jumbo borrowers — those taking large loans that fall outside the purview of lending giants Fannie Mae and Freddie Mac — will find they must cast a wide net to find a mortgage, and they will pay a higher interest rate. Some lenders, fearful of risk during the coronavirus recession, have left this market. Refinancing with cash out is shrinking, too, as lenders are worried people will lose their jobs and be unable to pay.

In one unexpected trend, this recession has sparked a surprisingly strong housing market. Home prices have risen sharply in most parts of the country, and bidding wars have broken out in many places.

Moira Taylor, a real estate broker in Atlanta and head of Taylor Made Realty, says every home on the market draws half a dozen bids, and some get more. “Sometimes we’re even putting bids in blind, before we even see the properties,” Taylor says. “It’s just that competitive.”

As for rates, they’re widely expected to stay low in the coming months. Market watchers are waiting for the spread between Treasury yields and mortgage rates to narrow, a development that would create additional downward pressure on rates. But with the Federal Reserve’s commitment to nearly unlimited buying in the mortgage-backed securities market, anyone with good to excellent credit who wants a mortgage should be able to snag a historically low rate, and even borrowers with poor to bad credit will benefit as well with a lower rate than before the Fed intervention.

The Bankrate.com national survey of large lenders is conducted weekly. To conduct the National Average survey, Bankrate obtains rate information from the 10 largest banks and thrifts in 10 large U.S. markets. In the Bankrate.com national survey, our Market Analysis team gathers rates and/or yields on banking deposits, loans and mortgages. We’ve conducted this survey in the same manner for more than 30 years, and because it’s consistently done the way it is, it gives an accurate national apples-to-apples comparison. Our rates differ from other national surveys, in particular Freddie Mac’s weekly published rates. Each week Freddie Mac surveys lenders on the rates and points based on first-lien prime conventional conforming home purchase mortgages with a loan-to-value of 80 percent. “Lenders surveyed each week are a mix of lender types – thrifts, credit unions, commercial banks and mortgage lending companies – is roughly proportional to the level of mortgage business that each type commands nationwide,” according to Freddie Mac.