Several key mortgage rates increased today. The average rates on 30-year fixed and 15-year fixed mortgages both increased. On the variable-mortgage side, the average rate on 5/1 adjustable-rate mortgages also cruised higher.
Rates for mortgages are constantly changing, but they remain much lower overall than they were before the Great Recession. If you’re in the market for a mortgage, it could make sense to go ahead and lock if you see a rate you like. Just make sure you shop around first.
30-year fixed mortgages
The average rate for the benchmark 30-year fixed mortgage is 3.14 percent, an increase of 8 basis points over the last seven days. Last month on the 17th, the average rate on a 30-year fixed mortgage was higher, at 3.15 percent.
At the current average rate, you’ll pay a combined $429.19 per month in principal and interest for every $100,000 you borrow. That’s an extra $4.34 compared with last week.
You can use Bankrate’s mortgage calculator to estimate your monthly payments and find out how much you’ll save by adding extra payments. It will also help you calculate how much interest you’ll pay over the life of the loan.
15-year fixed mortgages
The average 15-year fixed-mortgage rate is 2.66 percent, up 3 basis points from a week ago.
Monthly payments on a 15-year fixed mortgage at that rate will cost around $674 per $100,000 borrowed. Yes, that payment is much bigger than it would be on a 30-year mortgage, 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 faster.
The average rate on a 5/1 adjustable rate mortgageis 3.37 percent, climbing 9 basis points over the last 7 days.
These types of loans are best for those who expect to sell or refinance 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 3.37 percent would cost about $442 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 projections.
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 term||Today’s Rate||Last week||Change|
|30-year mortgage rate||3.14%||3.06%||+0.08|
|15-year mortgage rate||2.66%||2.63%||-0.03|
|30-year jumbo mortgage rate||3.19%||3.10%||+0.09|
|30-year mortgage refinance rate||3.37%||3.13%||+0.24|
Rates accurate as of August 17, 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, even exceeding 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.
The benefit of a rate lock is that 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.
Keep in mind that 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, with refinancing taking at least a month.
What causes mortgage rates to change
Mortgage rates are influenced by a range of economic factors, from inflation to unemployment numbers. Typically, higher inflation means higher interest rates and vice versa. As inflation rises, the dollar loses value, which in turn drives off investors for mortgage-backed securities, causing the prices to fall and yields to climb. When yields climb, rates get 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?
Mortgage rates have been volatile because of the COVID-19 pandemic. Generally, though, rates have been low. For a while, some lenders were increasing rates because they were struggling to deal with the demand. 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.”
Shopping for the right lender? Check out Bankrate’s lender reviews here.
|Loan term||Purchase Rates||Refinance Rates|
|The chart above links out to loan-specific content to help our readers learn more about rates by mortgage type.|
|30-Year Loan||Today’s 30-Year Mortgage Rates||30-Year Mortgage Refinance Rates|
|20-Year Loan||20-Year Mortgage Interest Rates||20-Year Refi Rates|
|15-Year Loan||15-Year Mortgage Rates||15-Year Mortgage Refinance Rates|
|10-Year Loan||10-Year Mortgage Rates||10-Year Refi Interest Rates|
|FHA Loan||FHA Mortgage Interest Rates||FHA Mortgage Refi Rates|
|VA Loan||VA Loan Rates||VA Mortgage Refinance Rates|
|ARM Loan||ARM Mortgage Rates||Current ARM Refinance Rates|
|Jumbo Loan||Current Jumbo Mortgage Rates||Current Jumbo Refinance Rates|