The purpose of this disclosure is to explain how we make money without charging you for our content.
Our mission is to help people at any stage of life make smart financial decisions through research, reporting, reviews, recommendations, and tools.
Earning your trust is essential to our success, and we believe transparency is critical to creating that trust. To that end, you should know that many or all of the companies featured here are partners who advertise with us.
Our content is free because our partners pay us a referral fee if you click on links or call any of the phone numbers on our site. If you choose to interact with the content on our site, we will likely receive compensation. If you don't, we will not be compensated. Ultimately the choice is yours.
Opinions are our own and our editors and staff writers are instructed to maintain editorial integrity, but compensation along with in-depth research will determine where, how, and in what order they appear on the page.
To find out more about our editorial process and how we make money, click here.
The average rate for a 30-year fixed-rate purchase mortgage was 3.547% on Friday. The average rate for a 30-year refinance was 4.325%.
Money’s current mortgage rates include data from over 8,000 lenders across the United States and are updated daily. These rates include discount points and represent what a borrower with a 20% down payment and 700 credit scores — roughly the national average FICO score — would have been quoted.
|30-year fixed-rate purchase mortgage|
|Rate of October 23, 2020|
Mortgage rates vary from state to state. On Friday, borrowers in Illinois were quoted the lowest mortgage rates — at 3.34%. People looking for mortgages in Nevada saw the highest average rate at 3.814%. Nationwide, borrowers with the highest credit scores, 740 and above, were quoted rates averaging 3.084%, while those with credit of 640 or below were shown rates of 5.043% — a 1.959 percentage-point spread.
You may be able to negotiate a lower rate if you shop around or if you have other accounts with the lender. (Money’s picks for the best mortgage lenders are here.) Currently, some banks are hiking up advertised rates to keep demand in check, so you may be offered a lower rate if you reach out directly.
Freddie Mac’s widely quoted Primary Mortgage Market Survey put rates at 2.80% with 0.6 points paid for the week ending October 22, a new record low. The mortgage purchaser’s weekly survey reflects borrowers who put 20% down on conforming loans and have excellent credit.
Refinance rates today
Money’s survey also shows that the offered rate for a 30-year refinance for someone with a 740 credit score was 3.749% on Friday. Last October, the average mortgage rate (including fees) was 3.859%.
|30-year fixed-rate mortgage refi|
|Rate of October 23, 2020|
A homeowner with a $200,000 mortgage balance currently paying 3.859% on a 30-year could potentially cut their monthly payment from $939 to $926 by financing at the current lower rates. To determine if it’s worth it to refinance your mortgage, also consider the closing fees you paid on your current mortgage, how much your new lender is charging and how long you have left on your loan term. (Our picks for the best lenders for refinancing are here).
What else is happening in the housing market right now?
The median home sale price increased 15% from last year to a record high of $320,625, according to real estate brokerage Redfin’s Housing Market Update for the four week period ending October 18.
At the same time, the median asking price of new listings was up 14% over the same time period last year. The number of pending home sales were still 32% higher than last year. The average sale-to-price ratio, which measures how close to its asking price a home is sold, was at a record high 99.5%.
“It’s remarkable how this late in the year the market remains highly competitive,” said Redfin chief economist Daryl Fairweather. “There are still plenty of homebuyers lying in wait for new listings to hit the market. And when homebuyers see their perfect house listed amid the ongoing shortage of homes for sale, they are willing to pay asking price or even more just to make sure the deal goes through before another buyer swoops in. The election may slow down homebuying activity in the coming weeks as buyers and sellers get anxious about the outcome, but once the dust settles, it’s likely that there will still be a lot of pent-up demand that will heat things right back up.”
During the period included in the report, the number of new listings was up 8% year-over-year. However, the overall number of active listings, or the number of homes for sale at any point during the survey period, was down 29% from last year as homes are selling at a record pace. Forty-five percent of homes under contract had an accepted offer within the first two weeks of being on the market, a pace that is unheard of this late in a typical year.
Mortgage term of the Week
Understanding the lingo can be key to avoiding mistakes when you are buying a home or refinancing your mortgage. For more read: Everything You Need to Know About Mortgage Rates in 2020
Closing: The final step in the mortgage process. It involves the delivery of a deed, the signing of notes, any financial adjustments needed and the disbursement of funds to complete the sale of a property.