Several closely watched mortgage rates climbed higher 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, ticked downward.
Rates for mortgages change daily, but they remain much lower overall than they were before the Great Recession. If you’re in the market for a mortgage, it may make sense to go ahead and lock if you see a rate you like. Just be sure to shop around.
30-year fixed mortgages
The average rate for the benchmark 30-year fixed mortgage is 3.04 percent, an increase of 1 basis point over the last week. A month ago, the average rate on a 30-year fixed mortgage was lower, at 3.01 percent.
At the current average rate, you’ll pay principal and interest of $423.76 for every $100,000 you borrow. That’s an extra $0.54 compared with last week.
You can use Bankrate’s mortgage rate calculator to figure out your monthly payments and find out 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 2.57 percent, up 2 basis points since the same time last week.
Monthly payments on a 15-year fixed mortgage at that rate will cost around $670 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 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 3.08 percent, ticking down 4 basis points over the last week.
These types of loans are best for those who expect to refinance or sell 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 3.08 percent would cost about $426 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 right now? 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 type||Interest rate||A week ago||Change|
|30-year fixed rate||3.04%||3.03%||+0.01|
|15-year fixed rate||2.57%||2.55%||-0.02|
|30-year fixed jumbo rate||3.11%||3.12%||-0.01|
|30-year fixed refinance rate||3.16%||3.18%||-0.02|
Updated on October 19, 2020.
When to lock your 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 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. 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 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.
Why do mortgage rates move up and down?
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.
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 “Understanding Bankrate’s on-site rate averages.”
Shopping for the right mortgage lender?
- Optimum First Mortgage Review
- Ally Home Mortgage Review
- Citi Bank Mortgage Review
- Quicken Loans Mortgage Review
|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 Mortgage Rates||Current 30 Year Refinance Rates|
|20-Year Loan||20-Year Mortgage Rates||20-Year Refinance Interest Rates|
|15-Year Loan||15 Year Fixed Mortgage Rates||15-Year Refi Interest Rates|
|10-Year Loan||10-Year Mortgage Rates||10-Year Mortgage Refinance Rates|
|FHA Loan||FHA Loan Interest Rates||Current FHA Loan Refinance Rates|
|VA Loan||VA Loan Rates||VA Refinance Loan Rates|
|ARM Loan||Adjustable Rate Mortgage Rates||ARM Refinance Rates|
|Jumbo Loan||Jumbo Loan Rates||Current Jumbo Refinance Rates|