Mortgage rates were mixed today, but one key rate tapered off. The average for a 30-year fixed-rate mortgage fell, but the average rate on a 15-year fixed climbed. The average rate on 5/1 adjustable-rate mortgages, or ARMs, the most popular type of variable rate mortgage, ticked up.
Mortgage rates are constantly changing, but they continue to represent a bargain compared to rates before the Great Recession. If you’re in the market for a mortgage, it could 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 3.05 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 3.14 percent.
At the current average rate, you’ll pay a combined $424.31 per month in principal and interest for every $100,000 you borrow. That’s $0.54 lower, compared with last week.
You can use Bankrate’s mortgage payment calculator to get a handle on what your monthly payments would be 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 2.55 percent, up 2 basis points over the last seven days.
Monthly payments on a 15-year fixed mortgage at that rate will cost around $669 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 more quickly.
The average rate on a 5/1 ARM is 3.34 percent, up 1 basis point 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 considerably higher when the loan first adjusts, and thereafter.
Monthly payments on a 5/1 ARM at 3.34 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 mortgage rate projections.
Want to see where rates are right now? Lenders nationwide respond to Bankrate’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||3.05%||3.06%||-0.01|
|15-year fixed rate||2.55%||2.53%||-0.02|
|30-year fixed jumbo rate||3.10%||3.12%||-0.02|
|30-year fixed refinance rate||3.09%||3.11%||-0.02|
Updated on September 14, 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 expensive. 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 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
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.
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.
Mortgage rate snapshot
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.”
Read about other loan terms:
Searching for the right mortgage lender?
- Direct Home Lending Mortgage Review
- Ally Home Mortgage Review
- Citi Bank Mortgage Review
- Quicken Loans Mortgage Review
|Loan Type||Purchase Rates||Refinance Rates|
|The index above links out to loan-specific content to help you learn more about rates by mortgage type.|
|30-Year Loan||30-Year Mortgage Rates||30-Year Refinance Rates|
|20-Year Loan||Current 20 Year Mortgage Rates||20-Year Refinance Rates|
|15-Year Loan||Today’s 15-Year Mortgage Rates||15-Year Refinance Rates|
|10-Year Loan||10-Year Mortgage Interest Rates||10-Year Mortgage Refinance Rates|
|FHA Loan||FHA Mortgage Rates||Current FHA Loan Refinance Rates|
|VA Loan||Current VA Mortgage Rates||VA Refinance Loan Rates|
|ARM Loan||ARM Interest Rates||ARM Refi Mortage Rates|
|Jumbo Loan||Current Jumbo Mortgage Rates||Jumbo Loan Refinance Rates|