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Published: Jan 06, 2021 6 min read
Money; Getty Images

Mortgage applications slowed as would be borrowers took a break during the holiday season. At the same time, the number of homeowners in mortgage forbearance held steady during the last two weeks of 2019. Meanwhile, mortgage rates are up slightly today.

Today's Mortgage Rates

The average interest rate on a 30-year fixed-rate mortgage was 2.995% on Tuesday — up from 2.973% on Monday.

Money's daily mortgage rates factor in rate quote data from over 8,000 lenders from across the United States. These rates include discount points and represent what a borrower with a 20% down payment and a 700 credit score — roughly the national average FICO score — would have been offered.

Mortgage Rate Chart
Loan type Average Rate
30-Year Fixed Loan 2.995%
15-Year Fixed Loan 2.26%
30-Year FHA Loan 3.061%
30-Year VA Loan 3.134%
30-Year Jumbo Loan 3.587%
Source: Money | Date: Jan. 5, 2021 | Rates assume a credit score of 700

Freddie Mac's widely quoted Primary Mortgage Market Survey put mortgage rates at 2.67% with 0.7 points paid for the week ending December 31. That's 0.01 percentage points above the prior week's historic low. Rates set new record lows 16 times in 2020. 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 Tuesday, borrowers in Illinois were quoted the lowest mortgage rates — at 2.929%. People looking for mortgages in Colorado saw the highest average rate at 3.157%.

Nationwide, borrowers with the highest credit scores, 740 and above, were quoted rates averaging 2.812%, while those with credit of 620 or below were shown rates of 4.347%.

You may be able to negotiate a better 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.) Currently, some lenders are 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 3.071% on Tuesday. 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 3.071%
15-Year Fixed Loan 2.55%
30-Year FHA Loan 3.362%
30-Year VA Loan 3.355%
30-Year Jumbo Loan 3.511%
Source: Money | Date: Jan. 5, 2021 | Rates assume a credit score of 740

What else is happening in the housing market today?

Mortgage loan applications were down 4.2% for the two-week period ending on January 1, according to the Mortgage Bankers Association. Purchase loan applications ticked down 0.8% but remained 3% above the same period in 2019. Refinance applications were also down, decreasing by 6%. However, the refi volume doubled year-over-year. The data includes an adjustment for the holiday period.

The slowdown in both purchase and refinance applications is typical for this time of year, said Joel Kan, associate vice president of economic and industry forecasting for the MBA. He expects loan volume to pick back up now that the holidays are over.

"The record low rates for fixed-rate mortgages is good news for borrowers looking to refinance or buy a home," noted Kan. "The steady demand for home buying throughout most of 2020 should continue in 2021."

Kan added that the MBA expects mortgage purchase loan originations to reach an all-time high of $1.59 trillion in 2021.

Meanwhile, the number of homeowners taking advantage of mortgage forbearance plans remained fairly steady at 5.53% for the week ending December 27, according to the MBA. The share of loans in the payment deferral programs has hovered around 5.5% for the past two months after steadily declining throughout the summer and fall.

According to Mike Fratantoni, chief economist for the MBA, the number of forbearance requests as well as the number of exits from the program slowed during the holiday season. He did note, however, that the number of government-backed loans in forbearance reached the highest level since November 1.

"While the increasing number of COVID-19 cases continues to slow economic recovery, the passed stimulus legislation should provide financial support for many households as the vaccine rollout commences," said Fratantoni.

Forbearance programs were put in place as part of the CARES Act in March 2020. It allow homeowners facing hardship from the pandemic to request a pause in their monthly mortgage payments without penalty for a period of up to one year. The period for borrowers to request forbearance was originally set to expire on December 31 but was extended to February 28.

Quote of the Week

More great housing content from Money.

Tammy Andrews, vice president of Motto Mortgage United, on taking advantage of record low rates:

For more read: 7 Things to Do Now if You Want to Refinance Your Mortgage in 2021

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9 Steps to Take Now That Will Prepare You for Buying a Home in 2021

Money's 2021 Real Estate Outlook: What to Expect for Mortgage Rates, Home Prices and More

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