Multiple closely watched mortgage rates receded today. The average rates on 30-year fixed and 15-year fixed mortgages both receded. The average rate on 5/1 adjustable-rate mortgages, or ARMs, the most popular type of variable rate mortgage, remained steady.
Rates for mortgages change daily, but they remain low by historical standards. 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 3.24 percent, down 5 basis points over the last week. This time 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 $434.66 per month in principal and interest for every $100,000 you borrow. That’s $2.74 lower, compared with last week.
You can use Bankrate’s home loan calculator to estimate your monthly payments and see what the effects of making extra payments would be. 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 2.75 percent, down 5 basis points over the last week.
Monthly payments on a 15-year fixed mortgage at that rate will cost around $679 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 more rapidly.
The average rate on a 5/1 adjustable rate mortgageis 3.11 percent, unchanged over the last 7 days.
These loan types 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 3.11 percent would cost about $428 for each $100,000 borrowed over the initial five years, but could ratchet higher 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 Trend Index.
Want to see where rates are at this moment? 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 type||Interest rate||A week ago||Change|
|30-year fixed rate||3.24%||3.29%||-0.05|
|15-year fixed rate||2.75%||2.80%||-0.05|
|30-year fixed jumbo rate||3.31%||3.34%||-0.03|
|30-year fixed refinance rate||3.33%||3.36%||-0.03|
Updated on July 8, 2020.
Rate lock advice and recommendations
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, 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 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. You may be able to find a lender that offers a floating rate lock. A floating rate lock lets you get a lower rate if interest rates decline before closing your loan. It could be worth the cost in a declining rate environment. 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.
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, and expect refinancing to take at least a month..
What causes mortgage rates to 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 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.”
Searching for the right lender? See Bankrate’s lender reviews here.
|Loan Type||Purchase Rates||Refinance Rates|
|The table above links out to loan-specific content to help our readers learn more about rates by loan type.|
|30-Year Loan||Today’s 30-Year Mortgage Rates||30-Year Refinance Interest Rates|
|20-Year Loan||20-Year Mortgage Rates||Current 20-Year Refinance Rates|
|15-Year Loan||15 Year Fixed Mortgage Rates||15-Year Refi Interest Rates|
|10-Year Loan||10-Year Fixed Mortgage Rates||10-Year Mortgage Refinance Rates|
|FHA Loan||FHA Mortgage Loan Rates||FHA Mortgage Refi Rates|
|VA Loan||VA Mortgage Interest Rates||VA Refinance Rates|
|ARM Loan||ARM Mortgage Rates||ARM Refinance Interest Rates|
|Jumbo Loan||Jumbo Loan Interest Rates||Jumbo Loan Refinance Rates|