Mortgage Interest Rates Today, July 16, 2020 | Important rate falls

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Daily Mortgage blog

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Expect Best/stocksnap.io

Mortgage rates showed no clear direction today, but one key rate was down. The average for a 30-year fixed-rate mortgage slid down, but the average rate on a 15-year fixed were unchanged. The average rate on 5/1 adjustable-rate mortgages, or ARMs, the most popular type of variable rate mortgage, cruised higher.

Mortgage rates are constantly changing, but they remain 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 be sure to shop around.

Compare mortgage rates in your area now.

30-year fixed mortgages

The average rate for a 30-year fixed mortgage is 3.14 percent, down 6 basis points over the last week. This time a month ago, the average rate on a 30-year fixed mortgage was higher, at 3.41 percent.

At the current average rate, you’ll pay a combined $429.19 per month in principal and interest for every $100,000 you borrow. That’s $3.28 lower, compared with last week.

You can use Bankrate’s mortgage 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 computehow much interest you’ll pay over the life of the loan.

15-year fixed mortgages

The average 15-year fixed-mortgage rate is 2.72 percent, unchanged over the last week.

Monthly payments on a 15-year fixed mortgage at that rate will cost around $677 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.

5/1 ARMs

The average rate on a 5/1 adjustable rate mortgageis 3.19 percent, adding 9 basis points over the last week.

These types of loans are best for people who expect to refinance or sell before the first or second adjustment. Rates could be materially higher when the loan first adjusts, and thereafter.

Monthly payments on a 5/1 ARM at 3.19 percent would cost about $432 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 predictions for this week.

Want to see where rates are at this moment? Lenders across the nation 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:

Today’s mortgage interest rates
Loan term Today’s Rate Last week Change
30-year mortgage rate 3.14% 3.20% -0.06
15-year mortgage rate 2.72% 2.72% N/C
30-year jumbo mortgage rate 3.19% 3.26% -0.07
30-year mortgage refinance rate 3.18% 3.26% -0.08

Rates accurate as of July 16, 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, sometimes for more than 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.

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 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..

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.

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.

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 average rates.”

Shopping for a mortgage lender? Check out Bankrate’s lender reviews here.

See rates for a variety of loan types
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 Interest Rates 30-Year Mortgage Refinance Rates
20-Year Loan 20-Year Mortgage Rates 20-Year Refinance Interest Rates
15-Year Loan Today’s 15-Year Mortgage Rates 15-Year Refinance Rates
10-Year Loan Current 10 Year Mortgage Rates 10-Year Refi Interest Rates
FHA Loan FHA Mortgage Rates FHA Refinance Interest Rates
VA Loan VA Loan Rates Current VA Refinance Rates
ARM Loan Adjustable Rate Mortgage Rates ARM Refinance Rates
Jumbo Loan Jumbo Loan Interest Rates Jumbo Refinance Rates