Several closely watched mortgage rates were down today. The average rates on 30-year fixed and 15-year fixed mortgages both were down. The average rate on 5/1 adjustable-rate mortgages, or ARMs, the most popular type of variable rate mortgage, held steady.
Mortgage rates change daily, but they remain low by historical standards. 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 make sure you shop around first.
30-year fixed mortgages
The average rate for a 30-year fixed mortgage is 3.24 percent, down 5 basis points over the last week. A month ago, the average rate on a 30-year fixed mortgage was higher, at 3.50 percent.
At the current average rate, you’ll pay a combined $434.66 per month in principal and interest for every $100,000 you borrow. That’s lower by $2.74 than it would have been last week.
You can use Bankrate’s mortgage payment calculator to figure out your monthly payments 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 2.75 percent, down 5 basis points from a week ago.
Monthly payments on a 15-year fixed mortgage at that rate will cost around $679 per $100,000 borrowed. The bigger payment may be a little harder to find room for in your monthly budget than a 30-year mortgage payment 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 3.11 percent, unchanged since the same time last week.
These types of loans are best for those who expect to refinance or sell 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 3.11 percent would cost about $428 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 rate trends page.
Want to see where rates are right now? Lenders nationwide 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||3.24%||3.29%||-0.05|
|15-year mortgage rate||2.75%||2.80%||-0.05|
|30-year jumbo mortgage rate||3.31%||3.34%||-0.03|
|30-year mortgage refinance rate||3.33%||3.36%||-0.03|
Rates accurate as of July 7, 2020.
Should you lock a 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 pricey. 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 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, 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.
Current mortgage rate landscape
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 mortgage lender? See Bankrate’s mortgage lender reviews.
|Product||Purchase Rates||Refinance Rates|
|The index above links out to loan-specific pages to help our readers learn more about rates by mortgage type.|
|30-Year Loan||Today’s 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 Fixed Mortgage Rates||15-Year Refinance Rates|
|10-Year Loan||10-Year Mortgage Interest Rates||Current 10-Year Refinance Rates|
|FHA Loan||FHA Mortgage Interest Rates||FHA Refinance Rates|
|VA Loan||VA Mortgage Interest Rates||VA Refinance Rates|
|ARM Loan||ARM Interest Rates||ARM Refi Mortage Rates|
|Jumbo Loan||Jumbo Loan Rates||Jumbo Mortgage Refinance Rates|