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Published: Jan 26, 2021 7 min read
Money; Getty Images

Thought the number of mortgage loans in forbearance plans ticked up in recent weeks, the number of borrowers in the plans has remained fairly steady. Exits from the plans are low, but so are new entries.

Mortgage rates keep trending downward this week, as rates dropped from Friday.

Today’s Mortgage Rates: 30-Year Fixed Loans, 15-Year Fixed Loans, and More

The average interest rate on a 30-year fixed-rate mortgage was 3.056% on Monday — down from 3.088% on Friday.

Mortgage Rate Chart
Loan type Average Rate
30-Year Fixed Loan 3.056%
15-Year Fixed Loan 2.313%
30-Year FHA Loan 2.906%
30-Year VA Loan 2.918%
30-Year Jumbo Loan 3.71%
Source: Money | Date: Jan. 25, 2021 | Rates assume a credit score of 700

Money's daily mortgage rates show the average rate offered by over 8,000 lenders across the United States the previous day. They reflect what a typical borrower with a 700 credit score might expect to pay for a home loan right now. The rates assume a 20% down payment and include discount points.

Freddie Mac's benchmark Primary Mortgage Market Survey put mortgage rates at 2.77% with 0.7 points paid for the week ending January 21. That's a slight drop of 0.02 percentage points from last week and 0.12 percentage points higher than the all-time low of 2.65%. The mortgage purchaser's weekly survey reflects borrowers who put 20% down on conforming loans and have excellent credit.

How do I get the best mortgage rates?

Mortgage rates vary from state-to-state. On Monday, borrowers in Illinois were quoted the lowest mortgage rates — at 3.005%. People looking for mortgages in Nevada saw the highest average rate at 3.166%.

Nationwide, borrowers with the highest credit scores, 740 and above, were quoted rates averaging 2.862%, while those with credit of 620 or below were shown rates of 4.115%.

You may be able to negotiate a better mortgage rate if you shop around or if you have other accounts with the lender. (To get started, take a look at Money's picks for the best mortgage lenders.) Lately, some lenders have been hiking up advertised rates to keep demand in check, so you may be offered a lower rate if you reach out directly.

Today's Mortgage Refinance Rates

Money's survey also shows that the offered rate for a 30-year refinance for someone with a 740 credit score was 3.138% on Monday. In January 2020, the average mortgage rate (including fees) was around 3.8%.

Mortgage Refinance Rate Chart
Loan type Average Rate
30-Year Fixed Loan 3.138%
15-Year Fixed Loan 2.577%
30-Year FHA Loan 3.391%
30-Year VA Loan 3.408%
30-Year Jumbo Loan 3.588%
Source: Money | Date: Jan. 25, 2021 | Rates assume a credit score of 740

What else is happening in the housing market today?

The share of home loans in forbearance plans ticked up a single basis point to 5.38% during the week ending January 17, according to the Mortgage Bankers Association.

The number of homeowners enrolled in forbearance plans has remained steady at around 2.7 million for several months. The rate of borrowers exiting the program has slowed, but so has the number of new requests. Nearly 80% of all loans are in an extension of their original forbearance period.

Forbearance plans were put in place as part of the CARES Act, passed in March of last year, to support homeowners struggling to make their mortgage payments due to the COVID-19 pandemic. The plans allowed homeowners to request a pause in their monthly payments of up to one year. The original deadline to request forbearance was set to expire in September but was extended to March 31 of this year.

Mike Fratantoni, chief economist for MBA, noted that borrowers who may be in distress — more than 90 days late on their mortgage payments — will have options other than foreclosure thanks to a hot housing market.

"The latest housing market data show strong momentum entering 2021, with both the pace of home sales and new construction booming," he noted. "We expect that this strong market could benefit homeowners who need to sell their home, as record-low inventory is causing for-sale homes to go under contract quickly and is pushing up home prices.”

The recent forbearance increase was almost entirely among portfolio and private-label securities. Other loan types saw a net decline, with the largest decrease in the share of Fannie Mae and Freddie Mac loans in payment deferral. Mike Fratantoni, chief economist for MBA, notes that the steady decline in the share of government-sponsored enterprises loans in forbearance has been due to the fact that most borrowers have higher credit and more stable employment.

Mortgage Prediction of the Week

Expert views on what comes next.

Ali Wolf, chief economist at Zonda Home, a housing market research firm, on how President Biden's proposed homebuyer tax credit:

For more read: 2021 Real Estate Predictions: How Vaccines, President Biden and More Could Shape Housing Trends.

Bottom line:

Qualifying for a Mortgage Is Surprisingly Difficult Right Now

A Key Indicator Suggests Mortgage Rates' Epic Decline May Soon End

As Prices Soar, 6 Tricks for Finding a House You Can Actually Afford

Rates are subject to change. All information provided here is accurate as of the publish date.