Multiple key mortgage rates trended down today. The average for a 30-year fixed-rate mortgage fell, but the average rate on a 15-year fixed were flat. The average rate on 5/1 adjustable-rate mortgages, or ARMs, the most popular type of variable rate mortgage, receded.
Mortgage rates are in a constant state of flux, but, overall, they are very 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 be sure to shop around.
30-year fixed mortgages
The average rate for a 30-year fixed mortgage is 3.37 percent, down 5 basis points since the same time last week. A month ago, the average rate on a 30-year fixed mortgage was higher, at 3.57 percent.
At the current average rate, you’ll pay $441.82 per month in principal and interest for every $100,000 you borrow. That’s lower by $2.77 than it would have been last week.
You can use Bankrate’s home loan calculator to get a handle on what your monthly payments would be and see how much you’ll save by adding extra payments. 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 2.85 percent, unchanged over the last week.
Monthly payments on a 15-year fixed mortgage at that rate will cost around $683 per $100,000 borrowed. That may squeeze your monthly budget than a 30-year mortgage would, 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 rapidly.
The average rate on a 5/1 ARM is 3.15 percent, falling 3 basis points since the same time last week.
These types of loans are best for people 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 3.15 percent would cost about $430 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 at this moment? 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:
|30-year fixed jumbo||3.44%||3.51%||-0.07|
|30-year fixed refinance||3.42%||3.46%||-0.04|
Rates as of June 24, 2020.
Rate lock advice and recommendations
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 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
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.
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
The current mortgage rate environment has been unstable because of the coronavirus pandemic, but generally 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.”
Shopping for the right lender? Check out reviews of top lenders.
|Product||Purchase Rates||Refinance Rates|
|The table above links out to loan-specific content to help our readers learn more about rates by product type.|
|30-Year Loan||30-Year Interest Rates||30-Year Refinance Rates|
|20-Year Loan||20-Year Fixed Mortgage Rates||Current 20-Year Refinance Rates|
|15-Year Loan||Current 15 Year Mortgage Rates||15-Year Refi Interest Rates|
|10-Year Loan||10-Year Mortgage Interest Rates||10-Year Refinance Rates|
|FHA Loan||FHA Mortgage Rates||FHA Refinance Rates|
|VA Loan||VA Loan Interest Rates||VA Refinance Rates|
|ARM Loan||ARM Mortgage Rates||ARM Refinance Rates|
|Jumbo Loan||Current Jumbo Mortgage Rates||Jumbo Mortgage Refinance Rates|