30-Year Mortgage and Refinance Rates for February 22, 2021: Rates go up

30 year mortgage blog

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30-year fixed mortgage interest rates

The average rate for a 30-year fixed-rate mortgage is 3.04 percent, rising 18 basis points over the previous week. A month ago, the average interest rate on a 30-year mortgage loan was more favorable, at 2.88 percent. Today’s 30-year rate is 109 basis points below the average annual rate of 2019, making it a great time to get a fixed-rate mortgage.

At the current average interest rate, you’ll pay principal and interest of $423.76 for every $100,000 you borrow. Compared to this time last week, that’s $9.67 higher. Compared to a month ago, that’s $8.60 higher.

Learn more about 30-year fixed mortgage rates, and compare to a variety of other loan types.

30-year mortgage refinance rates

The average rate to refinance a 30-year fixed-rate mortgage is 3.07 percent, increasing 18 basis points compared to a week ago. Last month on the 22nd, the average rate on a 30-year mortgage was 2.89 percent.

At the current average rate, you’ll pay P&I of about $425 for every $100k you borrow. Compared to last week, that’s $9.70 higher. Compared to a month ago, that’s $9.70 higher.

Bankrate average annual 30-year fixed mortgage rate, 2010-2019

Year Average 30-Year Fixed Annual Rate
2010 4.86%
2011 4.65%
2012 3.88%
2013 4.16%
2014 4.31%
2015 3.99%
2016 3.79%
2017 4.14%
2018 4.70%
2019 4.13%

Pros and cons of a 30-year mortgage

The 30-year mortgage is the most popular option for homeowners, and this type of loan has a number of advantages, including:

  • Lower monthly payment. The 30-year mortgage offers lower, more affordable payments spread over time compared with shorter-term mortgages.
  • Stability. With the 30-year, you lock in a consistent principal and interest payment. That predictability lets you plan your housing expenses for the long term. Remember: Your monthly housing payment can change if your homeowners insurance and property taxes go up or, less likely, down.
  • Buying power. With lower payments, you can qualify for a larger loan amount and a more expensive home.
  • Flexibility. Lower monthly payments can free up some of your monthly budget for other goals, like saving for emergencies, retirement, college tuition or home repairs and maintenance.
  • Strategic use of debt. Some argue that Americans focus too much on paying down their mortgages rather than adding to their retirement accounts. A 30-year fixed-rate mortgage with a smaller monthly payment can allow you to save more for retirement.

As with any financial product, the 30-year mortgage has some downsides, including:

  • More total interest paid. Stretching out repayment to a 30-year term means you pay more overall in interest than you would with a shorter-term loan.
  • Higher mortgage rates. Lenders charge higher interest rates for 30-year mortgages compared to 15-year loans. That’s because they’re taking on the risk of not being repaid for a longer time span.
  • Slower equity growth. The amortization table for a 30-year mortgage reveals a harsh reality: In the early years, almost all of your payments go to interest rather than principal. A 15-year loan brings a higher monthly payment but much faster payoff of the loan amount.
  • Buying more house than you should. Just because you might be able to afford more house with a 30-year loan doesn’t mean you should stretch your budget to the breaking point. Give yourself some breathing room for other financial goals and unexpected expenses. Use Bankrate’s home affordability calculator to determine how much house you can afford.
  • 30-year fixed mortgage vs. 15-year fixed mortgage

    The main downside of a 30-year fixed-rate mortgage is the amount of interest you’ll pay. Mortgage rates are typically higher for 30-year loans than 15-year loans. Although your monthly payments will be lower for a 30-year loan, you’ll pay a lot more interest over the life of the loan.

    For example, with a 15-year mortgage, you’ll cut your repayment time in half and save significantly on interest in the process. Compare how much interest you’ll pay on 15-year and 30-year loans with Bankrate’s 15-year or 30-year fixed mortgage calculator.

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