Today's mortgage rates

Mortgage and Refinance Rates Today, May 4th, 2021 | Majority of rates rise

Daily Mortgage blog

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation for

Average mortgage rates were mostly higher compared to a week ago. Rates for 30-year fixed, 15-year fixed and jumbo loans increased, while 5/1 ARM rates remained flat.

Today’s mortgage rates for home purchase
Product Rate Last week Change
30-year fixed 3.09% 3.08% +0.01
15-year fixed 2.38% 2.37% +0.01
5/1 ARM 3.26% 3.26% N/C
30-year fixed jumbo 3.11% 3.08% +0.03

Rates as of May 4, 2021.

The rates listed here are marketplace averages based on the assumptions here. Actual rates displayed within the site may vary. This story has been reviewed by Bill McGuire. All rate data accurate as of Tuesday, May 4th, 2021 at 12:00pm.

Mortgage interest rates

30-year mortgage advances, +0.01%

The average rate for a 30-year fixed mortgage is 3.09 percent, up 1 basis point from a week ago. Last month on the 4th, the average rate on a 30-year fixed mortgage was higher, at 3.28 percent.

At the current average rate, you’ll pay $426.47 per month in principal and interest for every $100k you borrow. Compared to last week, that’s $0.54 higher.

While the 30-year rate is the most popular mortgage term, as with any financial product, the 30-year mortgage does have some negatives, 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 retirement of the loan amount.
  • Buying a more expensive 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.
  • 15-year fixed mortgage trends higher,+0.01%

    The average 15-year fixed-mortgage rate is 2.38 percent, up 1 basis point from a week ago.

    Monthly payments on a 15-year fixed mortgage at that rate will cost approximately $661 per $100k 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 save thousands of dollars over the life of the loan in total interest paid and build equity much faster.

    5/1 ARM rate holds firm

    The average rate on a 5/1 ARM is 3.26 percent, unchanged from a week ago.

    Adjustable-rate mortgages, or ARMs, are mortgage loans that come with a floating interest rate. In other words, the interest rate can change periodically throughout the life of the loan, unlike fixed-rate mortgages. These types of loans are best for those 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 3.26 percent would cost about $436 for each $100,000 borrowed over the initial five years, but could increase by hundreds of dollars afterward, depending on the loan’s terms.

    Jumbo loan interest rate trends higher, +0.03%

    The current average rate you’ll pay for jumbo mortgages is 3.11 percent, an increase of 3 basis points since the same time last week. This time a month ago, the average rate on a jumbo mortgage was higher, at 3.30 percent.

    At the average rate today for a jumbo loan, you’ll pay $427.56 per month in principal and interest for every $100,000 you borrow. That’s an increase of $1.63 over what you would have paid last week.

    Recap: How mortgage interest rates have moved over the past week

    • 30-year fixed mortgage rate: 3.09%, up from 3.08% last week, +0.01
    • 15-year fixed mortgage rate: 2.38%, up from 2.37% last week, +0.01
    • 5/1 ARM mortgage rate: 3.26%, the same as last week
    • Jumbo mortgage rate: 3.11%, up from 3.08% last week, +0.03

    Refinance rates

    Today’s 30-year mortgage refinance rate stays put

    The average 30-year fixed-refinance rate is 3.14 percent, unchanged over the last week. A month ago, the average rate on a 30-year fixed refinance was higher, at 3.36 percent.

    At the current average rate, you’ll pay $429.19 per month in principal and interest for every $100,000 you borrow.

    What causes mortgage rates to move

    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.

    What next:

    Today’s featured lenders, May 4, 2021