Mortgage rates diverged today, but one key rate ticked downward. The average for a 30-year fixed-rate mortgage receded, but the average rate on a 15-year fixed moved higher. The average rate on 5/1 adjustable-rate mortgages, meanwhile, climbed.
Mortgage rates change daily, but they continue to represent a bargain compared to rates 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’ve looked around for the best rate first.
30-year fixed mortgages
The average rate for the benchmark 30-year fixed mortgage is 3.14 percent, down 1 basis point over the last week. Last month on the 29th, the average rate on a 30-year fixed mortgage was higher, at 3.27 percent.
At the current average rate, you’ll pay principal and interest of $429.19 for every $100,000 you borrow. That represents a decline of $0.55 over what it would have been last week.
You can use Bankrate’s mortgage payment calculator to estimate your monthly payments 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 2.75 percent, up 7 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 more difficult 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 more quickly.
The average rate on a 5/1 adjustable rate mortgageis 3.30 percent, climbing 11 basis points from a week ago.
These types of loans are best for people who expect to refinance or sell 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 3.30 percent would cost about $438 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 rate projections.
Want to see where rates are at this moment? Lenders across the nation respond to Bankrate’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||3.14%||3.15%||-0.01|
|15-year mortgage rate||2.75%||2.68%||-0.07|
|30-year jumbo mortgage rate||3.18%||3.21%||-0.03|
|30-year mortgage refinance rate||3.23%||3.21%||+0.02|
Rates accurate as of July 29, 2020.
Lock your mortgage rate now or wait?
A rate lock guarantees your 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, 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..
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.
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 environment
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 average rates.”
Searching for the right mortgage lender? See Bankrate’s mortgage lender reviews.
|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 Mortgage Refinance Rates|
|20-Year Loan||20-Year Fixed Mortgage Rates||Current 20-Year Refinance Rates|
|15-Year Loan||15-Year Mortgage Rates||Current 15-Year Refinance Rates|
|10-Year Loan||Current 10 Year Mortgage Rates||10-Year Mortgage Refinance Rates|
|FHA Loan||FHA Loan Interest Rates||FHA Refinance Interest Rates|
|VA Loan||Current VA Mortgage Rates||VA Refinance Loan Rates|
|ARM Loan||ARM Interest Rates||Current ARM Refinance Rates|
|Jumbo Loan||Jumbo Mortgage Rates||Jumbo Mortgage Refinance Rates|