Several closely watched mortgage rates climbed higher today. The average for a 30-year fixed-rate mortgage climbed higher, but the average rate on a 15-year fixed fell. Meanwhile, the average rate on 5/1 adjustable-rate mortgages increased.
Rates for mortgages change daily, but they remain low by historical standards. If you’re in the market for a mortgage, it may make sense to lock if you see a rate you like. Just make sure you shop around first.
30-year fixed mortgages
The average rate you’ll pay for a 30-year fixed mortgage is 3.06 percent, an increase of 2 basis points over the last seven days. Last month on the 11th, the average rate on a 30-year fixed mortgage was higher, at 3.17 percent.
At the current average rate, you’ll pay principal and interest of $424.85 for every $100,000 you borrow. That’s $1.09 higher compared with last week.
You can use Bankrate’s home loan calculator to get a handle on what your monthly payments would be and see the effect of 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 2.59 percent, down 9 basis points since the same time last week.
Monthly payments on a 15-year fixed mortgage at that rate will cost around $671 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 adjustable rate mortgageis 3.29 percent, rising 1 basis point from a week ago.
These types of loans are best for people 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 3.29 percent would cost about $437 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 Rate Trend Index.
Want to see where rates are right now? Lenders across the nation respond to Bankrate.com’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 term||Today’s Rate||Last week||Change|
|30-year mortgage rate||3.06%||3.04%||+0.02|
|15-year mortgage rate||2.59%||2.68%||-0.09|
|30-year jumbo mortgage rate||3.10%||3.07%||+0.03|
|30-year mortgage refinance rate||3.11%||3.09%||+0.02|
Rates accurate as of August 11, 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 expensive. 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.
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
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.
What are current mortgage rates?
Mortgage rates have been volatile because of the COVID-19 pandemic. Generally, though, rates have been low. Mortgage rates are rising and falling from week to week, as lenders are inundated with forbearance and refinance requests. 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 “Bankrate’s Rate Averages Methodology.”
Shopping for the right lender? See Bankrate’s lender reviews here.
|Loan term||Purchase Rates||Refinance Rates|
|The chart 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||20-Year Mortgage Rates||Current 20-Year Refinance Rates|
|15-Year Loan||Current 15 Year Mortgage Rates||15-Year Refinance Rates|
|10-Year Loan||Current 10 Year Mortgage Rates||10-Year Mortgage Refinance Rates|
|FHA Loan||FHA Loan Interest Rates||FHA Mortgage Refi Rates|
|VA Loan||Current VA Mortgage Rates||VA Refinance Loan Rates|
|ARM Loan||ARM Mortgage Rates||ARM Refinance Rates|
|Jumbo Loan||Jumbo Loan Rates||Jumbo Refinance Rates|