Today’s 30 Year Mortgage Rates, November 17, 2020 | Rates move lower

30 year mortgage blog

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30-year mortgage interest rates

The average rate for a 30-year fixed-rate mortgage is 2.96 percent, declining 8 basis points over the past week. A month ago, the average rate on a 30-year mortgage was worse, at 3.04 percent.

At the current average rate, you’ll pay principal and interest of $419.45 for every $100k you borrow. That’s $4.31 lower than what it would have been a week ago.

Check out today’s daily mortgage rates article to understand how other mortgage interest rates moved.

30-year refinance rates

The average rate to refinance a 30-year fixed-rate mortgage is 3.09 percent, a decrease of 12 basis points over the past week. A month ago, the average rate on a 30-year mortgage was 3.17 percent.

At the current average rate, you’ll pay principal and interest of $426.47 for every $100k you borrow. Compared to last week, that’s $6.54 lower.

Pros and cons of a 30-year fixed mortgage

The 30-year mortgage is the most popular option for borrowers. It has a number of advantages. Among them:

  • Lower monthly payment. The 30-year mortgage offers lower, more affordable payments spread over time compared with shorter-term mortgages.
  • Stability. With a 30-year mortgage, you lock in a consistent principal and interest payment. Because of the predictability, you can plan your housing expenses for the long term. Remember: Your monthly housing payment can change if your homeowners insurance and property taxes go up or, less likely, down.
  • Buying power. With lower payments, you can qualify for a larger loan amount and a more expensive home.
  • Flexibility. Lower monthly payments can free up some of your monthly budget for other goals, like saving for emergencies, retirement, college tuition or home repairs and maintenance.
  • Strategic use of debt. Some argue that Americans focus too much on paying down their mortgages rather than adding to their retirement accounts. A 30-year fixed mortgage with a lower monthly cost can allow you to save more for retirement.

As with any financial product, the 30-year mortgage has some downsides, including:

  • More total interest paid. Stretching out repayment to a 30-year term means you pay more overall in interest than you would with a shorter-term loan.
  • Higher mortgage rates. Lenders charge higher interest rates for 30-year mortgages compared to 15-year loans. That’s because they’re taking on the risk of not being repaid for a longer time span.
  • Slower equity growth. The amortization table for a 30-year mortgage reveals a harsh reality: In the early years, almost all of your payments go to interest rather than principal. A 15-year loan brings a higher monthly payment but much faster payoff of the loan amount.
  • Buying a pricier house than you should. Just because you might be able to afford more house with a 30-year loan doesn’t mean you should stretch your budget to the breaking point. Give yourself some breathing room for other financial goals and unexpected expenses. Use Bankrate’s home affordability calculator to determine how much house you can afford.
  • 30-year fixed mortgage vs. 15-year fixed mortgage

    The biggest downside of a 30-year fixed-rate mortgage is the amount of interest you’ll pay. Mortgage rates are typically higher for 30-year loans than 15-year loans. Although your monthly payments will be lower for a 30-year loan, you’ll pay a lot more interest over the life of the loan.

    For example, with a 15-year mortgage, you’ll slash your repayment time in half and save significantly on interest in the process. Compare how much interest you’ll pay on 15-year and 30-year loans with Bankrate’s 15-year or 30-year fixed mortgage calculator.

    Mortgage lock recommendations

    A rate lock guarantees a lender will honor a specified interest rate at a specific cost for a set period. A mortgage rate lock protects you from market fluctuations. It also puts pressure on borrowers to make sure they close on homes before the rate-lock period expires. For example, if your lender locks in your rate at 3.75 percent for 45 days and rates jump up to 4 percent within that period, you’ll still get your loan at the lesser rate.

    If they choose not to lock in your rate, you’ll have a “floating” rate. That’s not a bad strategy when interest rates are generally falling, but it could be costly in a rising rate environment. For risk-averse people who are looking for a mortgage, a rate-lock is a must. It’s a good idea to ask for a 45-day lock at a minimum; 60 days is even better.

    Where rates are headed

    Every week, our editorial team asks a group of mortgage experts where they think mortgage rates will go over the next week. See Bankrate’s Rate Trend Index for weekly predictions.

    In order to provide the latest rates, mortgage lenders nationwide respond to Bankrate’s weekday mortgage rates survey to bring you the most current rates available. Here you can see the latest marketplace average rates for a variety of purchase loans.

    Shopping for a mortgage lender? See Bankrate’s lender reviews here.

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