Multiple key mortgage rates dropped today. The average rates on 30-year fixed and 15-year fixed mortgages both tapered off. Meanwhile, the average rate on 5/1 adjustable-rate mortgages also decreased.
Mortgage rates are constantly changing, but they continue to represent a bargain compared to rates before the Great Recession. If you’re in the market for a mortgage, it could be a great time to lock in a rate. Just make sure you’ve looked around for the best rate first.
30-year fixed mortgages
The average rate for a 30-year fixed mortgage is 3.18 percent, a decrease of 7 basis points from a week ago. A month ago, the average rate on a 30-year fixed mortgage was higher, at 3.38 percent.
At the current average rate, you’ll pay $431.37 per month in principal and interest for every $100,000 you borrow. Compared with last week, that’s $3.84 lower.
You can use Bankrate’s mortgage rate calculator to get a handle on what your monthly payments would be and see what the effects of making extra payments would be. It will also help you computehow much interest you’ll pay over the life of the loan.
15-year fixed mortgages
The average 15-year fixed-mortgage rate is 2.71 percent, down 5 basis points over the last seven days.
Monthly payments on a 15-year fixed mortgage at that rate will cost around $677 per $100,000 borrowed. The bigger payment may be a little tougher to find room for in your monthly budget than a 30-year mortgage payment would, but it comes with some big advantages: You’ll save thousands of dollars over the life of the loan in total interest paid and build equity much more quickly.
The average rate on a 5/1 adjustable rate mortgageis 3.08 percent, sliding 4 basis points over the last 7 days.
These loan types are best for people who expect to refinance or sell before the first or second adjustment. Rates could be much higher when the loan first adjusts, and thereafter.
Monthly payments on a 5/1 ARM at 3.08 percent would cost about $426 for each $100,000 borrowed over the initial five years, but could climb hundreds of dollars higher afterward, depending on the loan’s terms.
Where rates are headed
To see where Bankrate’s panel of experts expect rates to go from here, check out our rate trends page.
Want to see where rates are at this moment? Lenders across the nation 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 wide variety of purchase loans:
|Loan type||Interest rate||A week ago||Change|
|30-year fixed rate||3.18%||3.25%||-0.07|
|15-year fixed rate||2.71%||2.76%||-0.05|
|30-year fixed jumbo rate||3.23%||3.32%||-0.09|
|30-year fixed refinance rate||3.20%||3.34%||-0.14|
Updated on July 10, 2020.
Should you lock a mortgage rate?
A rate lock guarantees your interest rate for a specified period of time. It’s common for lenders to offer 30-day rate locks for a fee or to include the price of the rate lock into your loan. Some lenders will lock rates for longer periods, sometimes for more than 60 days, but those locks can be costly. In today’s volatile market, some lenders will lock an interest rate for only 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. Some lenders have a floating-rate lock option, which allows you to get a lower rate if interest rates fall before you close your loan. In a falling rate environment, a float-down lock could be worth the cost. 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.
Remember: 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, and expect refinancing to take at least a month..
Why mortgage rates 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.
Generally speaking, when the economy is strong, more people buy homes. That drives demand for mortgages. Increased demand for mortgages can cause rates to increase. The opposite is also true; less demand can lead to lower rates.
What are current mortgage rates?
The current mortgage rate environment has been unstable because of the coronavirus pandemic, but generally rates have been low. Mortgage rates are rising and falling from week to week, as lenders are inundated with forbearance and refinance requests. 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.
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.
To learn more about the different rate averages Bankrate publishes, see “Understanding Bankrate’s on-site rate averages.”
Searching for the right mortgage lender? See Bankrate’s lender reviews here.
|Loan Type||Purchase Rates||Refinance Rates|
|The table above links out to loan-specific content to help our readers learn more about rates by mortgage type.|
|30-Year Loan||30-Year Mortgage Rates||30-Year Mortgage Refinance Rates|
|20-Year Loan||20-Year Mortgage Interest Rates||20-Year Mortgage Refinance Rates|
|15-Year Loan||15 Year Fixed Mortgage Rates||15-Year Refinance Rates|
|10-Year Loan||Current 10 Year Mortgage Rates||10-Year Mortgage Refinance Rates|
|FHA Loan||FHA Loan Interest Rates||FHA Refinance Rates|
|VA Loan||VA Loan Interest Rates||VA Refinance Loan Rates|
|ARM Loan||ARM Mortgage Rates||ARM Refi Mortage Rates|
|Jumbo Loan||Jumbo Mortgage Rates||Jumbo Loan Refinance Rates|