Multiple closely watched mortgage rates sunk lower today. The average rates on 30-year fixed and 15-year fixed mortgages both fell. On the variable-mortgage side, the average rate on 5/1 adjustable-rate mortgages also trended down.
Mortgage rates are constantly changing, but they remain low by historical standards. If you're in the market for a mortgage, it could make sense to go ahead and lock if you see a rate you like. Just make sure you've looked around for the best rate first.
Compare mortgage interest rates from lenders nationwide.
30-year fixed mortgages
The average rate you'll pay for a 30-year fixed mortgage is 3.01 percent, a decrease of 5 basis points since the same time last week. This time a month ago, the average rate on a 30-year fixed mortgage was higher, at 3.03 percent.
At the current average rate, you'll pay a combined $422.14 per month in principal and interest for every $100,000 you borrow. That's a decline of $2.71 from last week.
You can use Bankrate's mortgage calculator to figure out your monthly payments and see how much you'll save by adding extra payments. It will also help you computehow much interest you'll pay over the life of the loan.
15-year fixed mortgages
The average 15-year fixed-mortgage rate is 2.48 percent, down 8 basis points over the last week.
Monthly payments on a 15-year fixed mortgage at that rate will cost around $666 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 3.05 percent, falling 29 basis points over the last 7 days.
These types of loans are best for people who expect to sell or refinance before the first or second adjustment. Rates could be considerably higher when the loan first adjusts, and thereafter.
Monthly payments on a 5/1 ARM at 3.05 percent would cost about $424 for each $100,000 borrowed over the initial five years, but could climb hundreds of dollars higher 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 mortgage rate projections.
Want to see where rates are at this moment? Lenders across the nation respond to Bankrate'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:
Current average mortgage interest rates
|Loan type ||Interest rate ||A week ago ||Change |
|30-year fixed rate ||3.01% ||3.06% ||-0.05 |
|15-year fixed rate ||2.48% ||2.56% ||-0.08 |
|30-year fixed jumbo rate ||3.04% ||3.11% ||-0.07 |
|30-year fixed refinance rate ||2.95% ||3.10% ||-0.15 |
Updated on September 17, 2020.
When to lock your mortgage rate
A rate lock guarantees your interest rate for a specified period of time. It's common for lenders to offer 30-day rate locks for a fee or to include the price of the rate lock into your loan. Some lenders will lock rates for longer periods, sometimes for more than 60 days, but those locks can be pricey. In today's volatile market, some lenders will lock an interest rate for only two weeks because they don't want to take on unnecessary risk.
The benefit of a rate lock is that if interest rates rise, you're locked into the guaranteed rate. You may be able to find a lender that offers a floating rate lock. A floating rate lock lets you get a lower rate if interest rates decline before closing your loan. It could be worth the cost in a declining rate environment. Because mortgage rates are not predictable, there's no guarantee that rates will stay where they are from week to week or even day to day. So, if you can lock in a low rate, then you should do so rather than gamble on interest rates falling even lower.
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.
A strong economy usually means more people buying homes, which drives demand for mortgages. This increased demand can push rates higher. The opposite is also true; less demand can trigger a drop in rates.
What are current mortgage rates?
Mortgage rates have been volatile because of the COVID-19 pandemic. Generally, though, rates have been low. Mortgage rates are rising and falling from week to week, as lenders are inundated with forbearance and refinance requests. 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 on-site rate averages."
Other daily news articles:
- Current mortgage refinance rates
- 30-Year interest rates
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