Several key mortgage rates trended upward today. The average rates on 30-year fixed and 15-year fixed mortgages both were higher. The average rate on 5/1 adjustable-rate mortgages, meanwhile, also notched higher.
Mortgage rates change daily, but they remain low by historical standards. If you’re in the market for a mortgage, it could make sense to lock if you see a rate you like. Just don’t do so without shopping around first.
30-year fixed mortgages
The average rate for the benchmark 30-year fixed mortgage is 3.40 percent, an increase of 2 basis points since the same time last week. Last month on the 19th, the average rate on a 30-year fixed mortgage was higher, at 3.52 percent.
At the current average rate, you’ll pay a combined $443.48 per month in principal and interest for every $100,000 you borrow. That’s up $1.11 from what it would have been last week.
You can use Bankrate’s mortgage payment calculator to figure out your monthly payments and see what the effects of making extra payments would be. It will also help you determinehow much interest you’ll pay over the life of the loan.
15-year fixed mortgages
The average 15-year fixed-mortgage rate is 2.86 percent, up 1 basis point over the last seven days.
Monthly payments on a 15-year fixed mortgage at that rate will cost around $684 per $100,000 borrowed. That may squeeze your monthly budget than a 30-year mortgage would, but it comes with some big advantages: You’ll come out several thousand dollars ahead 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 3.18 percent, climbing 1 basis point since the same time last week.
These loan types are best for people who expect to sell or refinance before the first or second adjustment. Rates could be considerably higher when the loan first adjusts, and thereafter.
Monthly payments on a 5/1 ARM at 3.18 percent would cost about $431 for each $100,000 borrowed over the initial five years, but could ratchet higher by hundreds of dollars 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 Mortgage rate predictions for this week.
Want to see where rates are right now? Lenders across the nation respond to Bankrate.com’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||3.40%||3.38%||+0.02|
|15-year fixed rate||2.86%||2.85%||-0.01|
|30-year fixed jumbo rate||3.48%||3.44%||+0.04|
|30-year fixed refinance rate||3.46%||3.41%||+0.05|
Updated on June 19, 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 pricey. In today’s volatile market, some lenders will lock an interest rate for only two weeks to avoid 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 mortgage rates are not predictable, there’s no guarantee that rates will stay where they are from week to week or even day to day. So, if you can lock in a low rate, then you should do so rather than gamble on interest rates falling even lower.
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..
What causes mortgage rates to 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.
Current mortgage rate landscape
Mortgage rates have been volatile because of the COVID-19 pandemic. Generally, though, 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 “Bankrate’s Rate Averages Methodology.”
Searching for a mortgage lender? See reviews of top lenders.
|Loan Type||Purchase Rates||Refinance Rates|
|The table above links out to loan-specific content to help our readers learn more about rates by loan type.|
|30-Year Loan||30-Year Mortgage Rates||Current 30 Year Refinance Rates|
|20-Year Loan||20-Year Fixed Mortgage Rates||20-Year Refinance Rates|
|15-Year Loan||15-Year Mortgage Interest Rates||15-Year Mortgage Refinance Rates|
|10-Year Loan||10-Year Mortgage Interest Rates||10-Year Mortgage Refinance Rates|
|FHA Loan||FHA Mortgage Interest Rates||FHA Refinance Rates|
|VA Loan||Current VA Mortgage Rates||VA Refinance Rates|
|ARM Loan||ARM Loan Rates||Current ARM Refinance Rates|
|Jumbo Loan||Jumbo Loan Interest Rates||Jumbo Refi Interest Rates|