Mortgage rates diverged today, but one key rate was down. The average for a 30-year fixed-rate mortgage dropped, but the average rate on a 15-year fixed moved higher. Meanwhile, the average rate on 5/1 adjustable-rate mortgages cruised higher.
Mortgage rates are constantly changing, but, overall, they are very low by historical standards. 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 you’ll pay for a 30-year fixed mortgage is 3.14 percent, down 1 basis point since the same time last week. A month ago, the average rate on a 30-year fixed mortgage was higher, at 3.30 percent.
At the current average rate, you’ll pay $429.19 per month in principal and interest for every $100,000 you borrow. That’s $0.55 lower, compared with last week.
You can use Bankrate’s mortgage loan calculator to estimate your monthly payments 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 2.75 percent, up 2 basis points over the last week.
Monthly payments on a 15-year fixed mortgage at that rate will cost around $679 per $100,000 borrowed. That’s obviously much higher than the monthly payment would be on a 30-year mortgage at that rate, 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 3.28 percent, adding 9 basis points over the last week.
These types of loans 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 3.28 percent would cost about $437 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 mortgage interest rates forecast.
Want to see where rates are at this moment? Lenders nationwide respond to our 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||3.14%||3.15%||-0.01|
|15-year fixed rate||2.75%||2.73%||-0.02|
|30-year fixed jumbo rate||3.18%||3.21%||-0.03|
|30-year fixed refinance rate||3.20%||3.25%||-0.05|
Updated on July 27, 2020.
Lock your mortgage rate now or wait?
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, 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 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 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, with refinancing taking at least a month.
Why mortgage rates 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.
Current mortgage rate environment
The current mortgage rate environment has been unstable because of the coronavirus pandemic, but generally 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.”
Searching for the right mortgage lender? Check out reviews of top lenders.
|Loan Type||Purchase Rates||Refinance Rates|
|The index above links out to loan-specific content to help our readers learn more about rates by product type.|
|30-Year Loan||30 Year Fixed Mortgage Rates||Current 30 Year Refinance Rates|
|20-Year Loan||20-Year Mortgage Rates||20-Year Mortgage Refinance Rates|
|15-Year Loan||15-Year Mortgage Rates||15-Year Mortgage Refinance Rates|
|10-Year Loan||10-Year Mortgage Interest Rates||10-Year Refi Interest Rates|
|FHA Loan||Current FHA Mortgage Rates||FHA Mortgage Refi Rates|
|VA Loan||VA Mortgage Rates||VA Refinance Rates|
|ARM Loan||ARM Loan Rates||Current ARM Refinance Rates|
|Jumbo Loan||Jumbo Mortgage Rates||Current Jumbo Refinance Rates|