Multiple key mortgage rates trended down today. The average for a 30-year fixed-rate mortgage slid down, but the average rate on a 15-year fixed held firm. On the variable-mortgage side, the average rate on 5/1 adjustable-rate mortgages receded.
Mortgage rates are constantly changing, but they remain much lower overall than they were before the Great Recession. If you’re in the market for a mortgage, it may be a great time to lock in a rate. Just make sure you shop around first.
30-year fixed mortgages
The average rate for a 30-year fixed mortgage is 3.33 percent, down 8 basis points since the same time last week. A month ago, the average rate on a 30-year fixed mortgage was higher, at 3.57 percent.
At the current average rate, you’ll pay principal and interest of $439.61 for every $100,000 you borrow. Compared with last week, that’s $4.43 lower.
You can use Bankrate’s home loan 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 determinehow much interest you’ll pay over the life of the loan.
15-year fixed mortgages
The average 15-year fixed-mortgage rate is 2.86 percent, unchanged over the last week.
Monthly payments on a 15-year fixed mortgage at that rate will cost around $684 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 faster.
The average rate on a 5/1 adjustable rate mortgageis 3.16 percent, falling 2 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 considerably higher when the loan first adjusts, and thereafter.
Monthly payments on a 5/1 ARM at 3.16 percent would cost about $430 for each $100,000 borrowed over the initial five years, but could climb hundreds of dollars higher 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 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:
|Loan term||Today’s Rate||Last week||Change|
|30-year mortgage rate||3.33%||3.41%||-0.08|
|15-year mortgage rate||2.86%||2.86%||N/C|
|30-year jumbo mortgage rate||3.39%||3.49%||-0.10|
|30-year mortgage refinance rate||3.35%||3.45%||-0.10|
Rates accurate as of June 25, 2020.
Rate lock advice and recommendations
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 expensive. In today’s volatile market, some lenders will lock an interest rate for only two weeks because they don’t want to take on 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.
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
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.
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 Rate Averages.”
Searching for the right lender? Check out Bankrate’s mortgage lender reviews.
|Loan term||Purchase Rates||Refinance Rates|
|The table above links out to loan-specific content to help you learn more about rates by mortgage type.|
|30-Year Loan||30-Year Interest Rates||Current 30 Year Refinance Rates|
|20-Year Loan||20-Year Fixed Mortgage Rates||20-Year Mortgage Refinance Rates|
|15-Year Loan||15-Year Mortgage Interest Rates||Current 15-Year Refinance Rates|
|10-Year Loan||Current 10 Year Mortgage Rates||10-Year Refi Interest Rates|
|FHA Loan||FHA Mortgage Loan Rates||FHA Refinance Interest Rates|
|VA Loan||VA Loan Rates||Current VA Refinance Rates|
|ARM Loan||Adjustable Rate Mortgage Rates||Current ARM Refinance Rates|
|Jumbo Loan||Jumbo Loan Interest Rates||Jumbo Mortgage Refinance Rates|