Multiple key mortgage rates trended down today. The average for a 30-year fixed-rate mortgage were down, but the average rate on a 15-year fixed ticked up. On the variable-mortgage side, the average rate on 5/1 adjustable-rate mortgages tapered off.
|Loan type||Interest rate||A week ago||Change|
|30-year fixed rate||3.01%||3.03%||-0.02|
|15-year fixed rate||2.58%||2.56%||-0.02|
|30-year fixed jumbo rate||3.03%||3.09%||-0.06|
|30-year fixed refinance rate||3.11%||3.20%||-0.09|
Updated on October 29, 2020.
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 be a great time to lock in a rate. Just don’t do so without shopping around first.
30-year fixed mortgages
The average rate for the benchmark 30-year fixed mortgage is 3.01 percent, a decrease of 2 basis points from a week ago. This time a month ago, the average rate on a 30-year fixed mortgage was higher, at 3.08 percent.
At the current average rate, you’ll pay $422.14 per month in principal and interest for every $100,000 you borrow. That represents a decline of $1.08 over what it would have been last week.
You can use Bankrate’s mortgage rate calculator to get a handle on what your monthly payments would be and see what the effects of making extra payments would be. 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 2.58 percent, up 2 basis points from a week ago.
Monthly payments on a 15-year fixed mortgage at that rate will cost around $671 per $100,000 borrowed. That’s clearly 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 come out several thousand dollars ahead over the life of the loan in total interest paid and build equity much more quickly.
5/1 Adjustable Rate Mortgage Rates
The average rate on a 5/1 adjustable rate mortgageis 3.04 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 materially higher when the loan first adjusts, and thereafter.
Monthly payments on a 5/1 ARM at 3.04 percent would cost about $424 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 currently? Lenders nationwide 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:
Lock your mortgage rate now or wait?
A rate lock guarantees your mortgage 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. 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.
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.
Are mortgage rates rising or falling?
Mortgage rates have hovered around all-time lows in recent months, but where they go from here is nearly impossible to predict. Much depends on the direction of the economy, and how well public health officials can contain the coronavirus pandemic. The general consensus: If the economy continues to bounce back, and if drugmakers are successful in developing a vaccine, rates will rise. On the other hand, if the economy struggles because of coronavirus-related setbacks, mortgage rates will remain at record lows or fall even further.
How do mortgage rates affect homebuyers?
In this housing boom, mortgage rates have been a mixed bag for buyers. Low rates give borrowers more buying power. A $300,000 loan at 4 percent equates to a monthly payment of $1,432. If rates fall to 3 percent, the payment plunges to $1,265.
However, that sort of decline also can help push up home prices — and values indeed have jumped in recent months.
Here’s one way to see the offsetting effects of soaring home prices and plunging mortgage rates. Say you decided not to buy a $300,000 home a year ago, when the 30-year mortgage rate was at about 3.75 percent. Your down payment at 20 percent would have been $60,000, and your monthly payment would have been $1,111.
Today, the price of the same home has jumped to $335,000, but you can land a 30-year loan at 3 percent. As a result, your monthly payment rises only slightly, to $1,130. However, you’ll have to come up with an extra $7,000 to make a 20 percent down payment.
Is now a good time to buy a house?
There’s never a straightforward answer to this question. It always depends. Do you have a reliable income, a good credit score and money saved for a down payment and repairs? If you can answer all of those questions affirmatively, you’re ready to buy.
However, the pandemic has led to an even greater shortage of homes. That’s caused a bidding war and rising prices. Those trends mean it can be a frustrating market for buyers.
To learn more about the different rate averages Bankrate publishes, see “Understanding Bankrate’s Rate Averages.”
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Shopping for the right lender?
- Direct Home Lending Mortgage Review
- Bethpage Federal Credit Union Mortgage Review
- BB&T Mortgage Review
- Wyndham Capital Mortgage Review
|Loan term||Purchase Rates||Refinance Rates|
|The index above links out to loan-specific content to help our readers learn more about rates by product type.|
|30-Year Loan||Today’s 30-Year Mortgage Rates||30-Year Mortgage Refinance Rates|
|20-Year Loan||20-Year Mortgage Interest Rates||20-Year Refinance Rates|
|15-Year Loan||Current 15 Year Mortgage Rates||15-Year Mortgage Refinance Rates|
|10-Year Loan||10-Year Mortgage Interest Rates||10-Year Refinance Rates|
|FHA Loan||FHA Mortgage Rates||FHA Refinance Interest Rates|
|VA Loan||Current VA Mortgage Rates||VA Refi Interest Rates|
|ARM Loan||Adjustable Rate Mortgage Rates||ARM Refi Mortage Rates|
|Jumbo Loan||Jumbo Loan Interest Rates||Jumbo Refinance Rates|
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.