Several benchmark mortgage rates slid lower today. The average rates on 30-year fixed and 15-year fixed mortgages both fell. On the variable-mortgage side, the average rate on 5/1 adjustable-rate mortgages also fell.
Rates for mortgages are constantly changing, but overall, they are very low by historical standards. If you’re in the market for a mortgage, it may make sense to lock if you see a rate you like. Just make sure you’ve looked around for the best rate first.
30-year fixed mortgages
The average 30-year fixed-mortgage rate is 3.14 percent, a decrease of 11 basis points over the last week. Last month on the 13th, the average rate on a 30-year fixed mortgage was higher, at 3.39 percent.
At the current average rate, you’ll pay $429.19 per month in principal and interest for every $100,000 you borrow. Compared with last week, that’s $6.02 lower.
You can use Bankrate’s home loan calculator to get a handle on what your monthly payments would be and see 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 2.73 percent, down 2 basis points over the last seven days.
Monthly payments on a 15-year fixed mortgage at that rate will cost around $678 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 save thousands of dollars 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 3.08 percent, down 4 basis points from a week ago.
These types of loans are best for people 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 3.08 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 mortgage rate projections.
Want to see where rates are at this moment? Lenders nationwide 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%||3.25%||-0.11|
|15-year mortgage rate||2.73%||2.75%||-0.02|
|30-year jumbo mortgage rate||3.19%||3.33%||-0.14|
|30-year mortgage refinance rate||3.19%||3.36%||-0.17|
Rates accurate as of July 13, 2020.
When to lock your mortgage rate
A rate lock guarantees your interest rate for a specified period of time. Lenders often offer 30-day rate locks for a nominal fee or roll the price of the lock into your loan. Some lenders will lock rates for longer periods, sometimes for more than 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. You may be able to find a lender that offers a floating rate lock. A floating rate lock lets you get a lower rate if interest rates decline before closing your loan. It could be worth the cost in a declining rate environment. 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.
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, and expect refinancing to take at least a month..
What causes mortgage rates to move
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.
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.
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 “Understanding Bankrate’s average rates.”
Searching for the right lender? See reviews of lenders nationwide.
|Product||Purchase Rates||Refinance Rates|
|The chart above links out to loan-specific pages to help you learn more about rates by loan type.|
|30-Year Loan||30 Year Fixed Mortgage Rates||30-Year Mortgage Refinance Rates|
|20-Year Loan||20-Year Fixed Mortgage Rates||20-Year Refi Rates|
|15-Year Loan||15 Year Fixed Mortgage Rates||15-Year Refinance Rates|
|10-Year Loan||Current 10 Year Mortgage Rates||10-Year Refi Interest Rates|
|FHA Loan||FHA Mortgage Loan Rates||FHA Refinance Rates|
|VA Loan||VA Loan Rates||VA Refinance Rates|
|ARM Loan||Adjustable Rate Mortgage Rates||ARM Refinance Interest Rates|
|Jumbo Loan||Current Jumbo Mortgage Rates||Jumbo Loan Refinance Rates|