Interest rates are higher today for most categories of mortgage loans. The notable exception is the 30-year fixed rate loan, which has declined slightly. The current average rate for a 30-year loan is 3.623%.
- The last rate on a 30 year fixed rate mortgage is 3.623%.
- The latest rate on a 15 year fixed rate mortgage is 2.654%.
- The latest rate on a 5/1 jumbo arm is 3.004%.
- The latest rate on a 7/1 compliant ARM is 4.595%.
- The latest rate on a 10/1 compliant ARM is 4.977%.
Current 30-year fixed mortgage rates
- The 30-year rate is 3.623%.
- It’s a day offold 0.002 percentage point.
- It’s a month increase by 0.158 percentage point.
A 30 year fixed rate loan will have an interest rate and monthly payment that will not change during the life of the loan. By paying only the required monthly amount, the mortgage will be paid off in 360 months unless you refinance the loan. If you want to pay off the loan faster, you can pay extra each month or make a lump sum payment.
Compared to a short term loan like a 15 year loan, the rate for a 30 year mortgage will be higher, but the monthly payments will be lower because you will be paying off the loan over a longer period. However, you will pay more overall interest with a 30-year period because you are paying a higher interest rate over a longer period.
A 30-year mortgage is the most common type of loan, as many borrowers find the lower monthly payment attractive.
Today’s 15-year fixed mortgage rates
- The 15-year rate is 2.654%.
- It’s a day infold 0.005 percentage point.
- It’s a month infold by 0.09 percentage point.
The interest rate and monthly payment on a 15-year mortgage will remain the same for the life of the loan, as will a 30-year fixed rate. This loan will be repaid in full after 180 months if you only pay the required monthly amount and do not refinance. You can pay off the loan faster by paying extra each month or by making a lump sum payment.
A 15 year loan will have a lower interest rate than a 30 year loan, but the monthly payments will be higher. This is because you are spreading the payments out half the time. On the plus side, by paying a lower rate over a shorter period of time, you will pay less total interest.
The ability to pay off the loan faster and save on interest makes a 15-year loan attractive to some borrowers who can afford higher monthly payments.
Today’s 5/1 Jumbo Variable Rate Mortgage Rates
- The ARM 5/1 rate is 3.004%.
- It’s a day infold by 0.033 percentage point.
- It’s a month offold by 0.022 percentage point.
The interest rate on an adjustable rate mortgage will be fixed for a predetermined number of years and then become adjustable for the remainder of the term of the loan. As a result, the monthly payment will be fixed first and then change according to the rate changes.
Once the rates become variable, they will be reset each year. For example, a 5/1 variable rate loan will have a fixed rate for the first few years of the loan, and then adjust each year thereafter. Other ARM terms include 7/1 arm and 10/1 arm. ARMs will be reimbursed in 30 years.
A 5/1 mortgage will usually have one of the lowest rates in the market, at least during the initial fixed rate period. The low initial rate makes it a popular choice among borrowers who do not plan to hold the home for the long term. However, if they decide to stay beyond the fixed rate period, ARM borrowers should be aware that the interest rate may rise at some point.
Current rates for VA, FHA and jumbo loans
The average rates for FHA, VA and jumbo loans are:
- The rate on a 30-year FHA mortgage is 3.402%.
- The rate for a 30-year VA mortgage is 3.452%.
- The rate for a 30-year jumbo mortgage is 3.768%.
Mortgage Refinance Rates Today
The average rates for 30-year loans, 15-year loans and jumbo 5/1 ARMs are as follows:
- The refinancing rate on a 30 year fixed rate refinance is 3.907%.
- The refinancing rate on a 15-year fixed rate refinance is 2.971%.
- The refinance rate on a 5/1 jumbo arm is 3.435%.
- The refinancing rate on a 7/1 compliant ARM is 4.832%.
- The refinancing rate on a 10/1 compliant ARM is 5.154%.
Where Are Mortgage Rates Going This Year?
Mortgage rates fell through 2020. Millions of homeowners responded to low mortgage rates by refinancing existing loans and taking out new ones. Many people have bought homes that they might not have been able to afford if the rates were higher.
In January 2021, rates briefly fell to all-time low levels, but trended higher throughout the month and into February.
Looking ahead, experts believe that interest rates will rise further in 2021, but modestly. Factors that could influence the rates include how quickly COVID-19 vaccines are distributed and when lawmakers can agree on another cost-effective relief package. More vaccinations and stimulus from the government could lead to improved economic conditions, which would increase rates.
While mortgage rates are likely to rise this year, experts say the increase won’t happen overnight, and it won’t be a dramatic jump. Rates are expected to stay close to their historically low levels throughout the first half of the year, rising slightly later in the year. Even with rates rising, this will still be a good time to finance a new home or refinance.
Factors that influence mortgage rates include:
- The Federal Reserve. The Fed acted quickly when the pandemic hit the United States in March 2020. The Fed announced its intention to keep money flowing through the economy by lowering the Federal Fund‘s short-term interest rate between 0% and 0.25%, which is also low as you go. The central bank has also committed to buying mortgage-backed securities and treasury bills, thereby supporting the housing finance market. The Fed has repeatedly reaffirmed its commitment to these policies for the foreseeable future, most recently at a policy meeting in late January.
- The 10-year Treasury bill. Mortgage rates move in line with the yields on 10-year government treasury bills. Yields fell below 1% for the first time in March and have risen slowly since. Currently, rates have hovered above 1% since the start of the year, pushing interest rates slightly higher. On average, there is typically a 1.8 point “spread” between Treasury bill yields and benchmark mortgage rates.
- The economy in the broad sense. Unemployment rates and changes in gross domestic product are important indicators of the overall health of the economy. When employment and GDP growth are low, it means the economy is weak, which can lower interest rates. Thanks to the pandemic, unemployment levels hit all-time highs early last year and have yet to recover. GDP has also been affected, and although it has rebounded somewhat, there is still a long way to go.
Tips for getting the lowest possible mortgage rate
There is no universal mortgage rate that all borrowers receive. Qualifying for the lowest mortgage rates takes a bit of work and will depend on both personal financial factors and market conditions.
Check your credit score and your credit report. Mistakes or other red flags that can lower your credit rating. The borrowers with the highest credit scores will get the best rates, so it’s essential to check your credit report before you begin the home search process. Taking action to correct mistakes will help increase your score. If you have high credit card balances, paying them off can also give you a quick boost.
Save money for a large down payment. This will reduce your loan-to-value ratio, which is the portion of the house price that the lender has to finance. A lower LTV usually results in a lower mortgage rate. Lenders also like to see money that has been saved in an account for at least 60 days. It tells the lender that you have the money to finance the purchase of the house.
Shop for the best price. Don’t settle for the first interest rate a lender offers you. Check with at least three different lenders to see who is offering the lowest interest rate. Also, think about different types of lenders, such as credit unions and online lenders, in addition to traditional banks.
Also take the time to learn about the different types of loans. Although the 30-year fixed-rate mortgage is the most common type of mortgage, consider a short-term loan such as a 15-year loan or an adjustable rate mortgage. These types of loans often have a lower rate than a conventional 30-year mortgage. Compare everyone’s costs to see which one best suits your needs and financial situation. Government loans – such as those backed by the Federal Housing Office, the Department of Veterans Affairs, and the Department of Agriculture – may be more affordable options for those who qualify.
Finally, lock your rate. Locking in your rate once you’ve found the right rate, the right loan product, and the lender will help ensure that your mortgage rate doesn’t increase until the loan closes.
Our mortgage rate methodology
Money’s Daily Mortgage Rates show the average rate offered by over 8,000 lenders in the United States for which the most recent business day rates are available. Today we are posting the rates for Monday April 5th. Our rates reflect what a typical borrower with a credit score of 700 might expect to pay for a home loan right now. These rates were offered to people with a 20% down payment and include reduction points.
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