Mortgage rates were mostly higher compared to a week ago. Rates for 30-year fixed, 15-year fixed and jumbo loans ticked up, while 5/1 ARM rates declined.
|30-year fixed jumbo||3.29%||3.22%||+0.07|
Rates as of April 5, 2021.
The rates listed above are Bankrate’s overnight average rates and are based on the assumptions here. Actual rates displayed across the site may vary.
30-year fixed-rate mortgage rises
The average rate for a 30-year fixed mortgage is 3.27 percent, up 5 basis points over the last seven days. A month ago, the average rate on a 30-year fixed mortgage was lower, at 3.23 percent.
At the current average rate, you’ll pay principal and interest of $436.30 for every $100k you borrow. That’s up $2.74 from what it would have been last week.
The 30-year mortgage is the most popular option for borrowers. It has a number of advantages. Among them:
- Lower monthly payment. Compared to a shorter-term mortgage, such as 15 years, the 30-year mortgage offers more affordable monthly payments spread over time.
- Stability. With a 30-year mortgage, you lock in a consistent principal and interest payment. Because of the predictability, you can 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 mortgage with a smaller monthly payment can allow you to save more for retirement.
15-year mortgage trends higher
The average rate for a 15-year fixed mortgage is 2.51 percent, up 4 basis points from a week ago.
Monthly payments on a 15-year fixed mortgage at that rate will cost roughly $667 per $100k borrowed. Yes, that payment is much bigger than it would be on a 30-year mortgage, 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.
5/1 ARM declines
The average rate on a 5/1 ARM is 3.07 percent, down 4 basis points from a week ago.
Adjustable-rate mortgages, or ARMs, are home loans that come with a floating interest rate. To put it another way, the interest rate can change from time to time throughout the life of the loan, unlike fixed-rate loans. These types of loans are best for those who expect to sell or refinance before the first or second adjustment. Rates could be substantially higher when the loan first adjusts, and thereafter.
Monthly payments on a 5/1 ARM at 3.07 percent would cost about $425 for each $100,000 borrowed over the initial five years, but could increase by hundreds of dollars afterward, depending on the loan’s terms.
Current jumbo mortgage rate goes up
The average rate you’ll pay for a jumbo mortgage is 3.29 percent, up 7 basis points over the last week. A month ago, the average rate for jumbo mortgages was lower, at 3.28 percent.
At the average rate today for a jumbo loan, you’ll pay principal and interest of $437.40 for every $100,000 you borrow. Compared to last week, that’s $3.84 higher.
In summary: How mortgage interest rates have changed this week
- 30-year fixed mortgage rate: 3.27%, up from 3.22% last week, +0.05
- 15-year fixed mortgage rate: 2.51%, up from 2.47% last week, +0.04
- 5/1 ARM mortgage rate: 3.07%, down from 3.11% last week, -0.04
- Jumbo mortgage rate: 3.29%, up from 3.22% last week, +0.07
Mortgage rate trend forecasts for this week (April 1-7, 2021)
Mortgage experts were split over how rates will move in the week ahead (April 1-7). In response to Bankrate’s weekly rates survey, 46 percent said rates will rise, 38 percent think they will remain the same and just 15 percent expect them to fall.
Greg McBride, Bankrate’s chief financial analyst, expects rates to rise. In his words: “Vote: Up. After briefly stabilizing, the improved tone of economic data from the month of March and talk of an infrastructure spending bill are renewing the push higher in bond yields and mortgage rates.”
Current mortgage rate landscape
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 below 3%. 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.
- Getting preapproved for a mortgage
- Steps in the mortgage underwriting process
- What’s the point of a cash out refinance?