30-year mortgage rate falls to smash another record

3 min read

Mortgage rates fell to another all-time low this week. The benchmark 30-year fixed-rate mortgage dropped 5 basis points to 3.31 percent, according to Bankrate’s weekly survey of large lenders.

A year ago, the 30-year was 4.05 percent. Four weeks ago, the rate was 3.43 percent. The 30-year fixed-rate average for this week is 0.66 percentage points below the 52-week high of 3.97 percent.

The 30-year fixed mortgages in this week’s survey had an average total of 0.29 discount and origination points.

Over the past 52 weeks, the 30-year fixed has averaged 3.73 percent. This week’s rate is 0.42 percentage points lower than the 52-week average.

  • The 15-year fixed-rate mortgage fell to 2.71 percent from 2.75 percent.
  • The 5/1 adjustable-rate mortgage rose to 3.48 percent from 3.47 percent.
  • The 30-year fixed-rate jumbo mortgage fell to 3.77 percent from 3.81 percent.

At the current 30-year fixed rate, you’ll pay $438.51 each month for every $100,000 you borrow, down from $441.27 last week.

At the current 15-year fixed rate, you’ll pay $676.72 each month for every $100,000 you borrow, down from $678.62 last week.

At the current 5/1 ARM rate, you’ll pay $447.93 each month for every $100,000 you borrow, up from $447.37 last week.

Results of Bankrate.com’s weekly national survey of large lenders conducted July 15, 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: 3.31% 2.71% 3.48%
Change from last week: -0.05 -0.04 +0.01
Monthly payment: $723.54 $1,116.59 $739.08
Change from last week: -$4.55 -$3.14 +$0.92

Where mortgage rates are headed

In the week ahead (July 16-22), 56 percent of the experts we polled predict rates will stay the same, 13 percent of the experts predict a rise in rates and 31 percent predict that rates will drop even further.

“The Treasury techs are mixed, pointing to a general ‘going nowhere,’” says Dick Lepre, senior loan officer, RPM Mortgage, Inc., San Francisco. “Fundamentals do not move the market because all that they reveal is the effects of things being closed, reopened and reclosed. What is interesting is equity markets where prices nearly totally disconnected from values and are being driven to insane levels by momentum trading. When reality sets in, equities are due for a significant correction. Money will move to the safety of fixed income securities and we will see lower rates. This is not to imply that this will happen in the coming week, but it will happen.”

Greg McBride, CFA, chief financial analyst at Bankrate, says: “As virus cases continue to surge, the negative economic ramifications are becoming clear and will push rates a bit lower.”

Homebuyers and refinancers taking advantage of cheap rates

Now is the time to jump on low mortgage rates rather than waiting a little longer in hopes of getting even deeper discounts on loans. It’s a good bet rates will at least stay at these low levels for months to come. You can see the forecast for the year ahead here.

Refinancing a mortgage can shave $100 or more off monthly payments, and may represent the raise you didn’t get at work,” says McBride.

Jumbo borrowers, meanwhile, will find they must cast a wide net to find a mortgage. Some lenders, fearful of risk amid the coronavirus recession, have left this market. Refinancing with cash out is shrinking because lenders are worried people will lose their jobs and be unable to pay, while home values could possibly fall if the recession is prolonged.

Market watchers are waiting for the spread between Treasury yields and mortgage rates to narrow, a development that would create 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 this spring 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 may 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.