Several closely watched mortgage rates moved higher today. The average for a 30-year fixed-rate mortgage moved up, but the average rate on a 15-year fixed receded. Meanwhile, the average rate on 5/1 adjustable-rate mortgages climbed.
Mortgage rates change daily, but overall, they are very low by historical standards. 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 don’t do so without shopping around first.
30-year fixed mortgages
The average rate you’ll pay for a 30-year fixed mortgage is 3.13 percent, an increase of 11 basis points over the last week. A month ago, the average rate on a 30-year fixed mortgage was lower, at 3.09 percent.
At the current average rate, you’ll pay $428.65 per month in principal and interest for every $100,000 you borrow. That’s $5.97 higher compared with last week.
You can use Bankrate’s home loan calculator to estimate your monthly payments and see how much you’ll save by adding extra payments. 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 2.59 percent, down 3 basis points from a week ago.
Monthly payments on a 15-year fixed mortgage at that rate will cost around $671 per $100,000 borrowed. That may put more pressure on 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 rapidly.
The average rate on a 5/1 ARM is 3.33 percent, adding 2 basis points from a week ago.
These loan types are best for those who expect to sell or refinance before the first or second adjustment. Rates could be substantially higher when the loan first adjusts, and thereafter.
Monthly payments on a 5/1 ARM at 3.33 percent would cost about $440 for each $100,000 borrowed over the initial five years, but could increase 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 Rate Trend Index.
Want to see where rates are currently? 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||3.13%||3.02%||+0.11|
|15-year fixed rate||2.59%||2.62%||-0.03|
|30-year fixed jumbo rate||3.20%||3.04%||+0.16|
|30-year fixed refinance rate||3.19%||3.22%||-0.03|
Updated on August 31, 2020.
Lock your mortgage rate now or wait?
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 expensive. 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.
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..
Factors that influence mortgage rates
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.
A strong economy usually means more people buying homes, which drives demand for mortgages. This increased demand can push rates higher. The opposite is also true; less demand can trigger a drop in rates.
Mortgage rate snapshot
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 “Bankrate’s Rate Averages Methodology.”
Shopping for a mortgage lender? See Bankrate’s lender reviews here.
|Loan term||Purchase Rates||Refinance Rates|
|The index above links out to loan-specific content to help you learn more about rates by loan type.|
|30-Year Loan||30 Year Fixed Mortgage Rates||30-Year Refinance Rates|
|20-Year Loan||20-Year Mortgage Rates||20-Year Mortgage Refinance Rates|
|15-Year Loan||15-Year Mortgage Interest Rates||15-Year Mortgage Refinance Rates|
|10-Year Loan||10-Year Mortgage Rates||Current 10-Year Refinance Rates|
|FHA Loan||FHA Mortgage Loan Rates||Current FHA Loan Refinance Rates|
|VA Loan||VA Loan Interest Rates||VA Refinance Loan Rates|
|ARM Loan||ARM Loan Rates||ARM Refinance Interest Rates|
|Jumbo Loan||Current Jumbo Mortgage Rates||Current Jumbo Refinance Rates|