Several key mortgage rates sunk lower today. The average rates on 30-year fixed and 15-year fixed mortgages both ticked downwards. The average rate on 5/1 adjustable-rate mortgages, or ARMs, the most popular type of variable rate mortgage, also were down.
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 a 30-year fixed mortgage is 3.20 percent, down 6 basis points over the last week. A month ago, the average rate on a 30-year fixed mortgage was higher, at 3.40 percent.
At the current average rate, you’ll pay $432.47 per month in principal and interest for every $100,000 you borrow. That’s a decline of $3.29 from last week.
You can use Bankrate’s mortgage calculator to estimate your monthly payments 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 2.72 percent, down 7 basis points over the last seven days.
Monthly payments on a 15-year fixed mortgage at that rate will cost around $677 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 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 3.10 percent, ticking down 1 basis point since the same time 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 much higher when the loan first adjusts, and thereafter.
Monthly payments on a 5/1 ARM at 3.10 percent would cost about $427 for each $100,000 borrowed over the initial five years, but could ratchet higher 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 Rate Trend Index.
Want to see where rates are currently? 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:
|30-year fixed jumbo||3.26%||3.32%||-0.06|
|30-year fixed refinance||3.26%||3.34%||-0.08|
Rates as of July 9, 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 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, 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.
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.”
Shopping for the right mortgage lender? See Bankrate’s lender reviews here.
|Loan Type||Purchase Rates||Refinance Rates|
|The chart above links out to loan-specific pages to help you learn more about rates by mortgage type.|
|30-Year Loan||Current 30 Year Mortgage Rates||30-Year Refinance Interest Rates|
|20-Year Loan||Current 20 Year Mortgage Rates||20-Year Refi Rates|
|15-Year Loan||15-Year Mortgage Rates||15-Year Refi Interest Rates|
|10-Year Loan||Current 10 Year Mortgage Rates||Current 10-Year Refinance Rates|
|FHA Loan||FHA Mortgage Rates||Current FHA Loan Refinance Rates|
|VA Loan||VA Loan Interest Rates||Current VA Refinance Rates|
|ARM Loan||ARM Interest Rates||Current ARM Refinance Rates|
|Jumbo Loan||Jumbo Loan Rates||Current Jumbo Refinance Rates|