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Published: Apr 17, 2021 12 min read
Money; Getty Images

Mortgage rates have been trending downward over the last two weeks, with the average 30-year fixed-rate mortgage settling in at 3.375% after reaching a peak of 3.647% on March 31. Most other loan categories for both purchasing a home and refinancing an existing mortgage ended the week lower as well.

Despite the recent slide, experts still expect interest rates to slowly increase throughout the rest of the year.

  • The latest rate on a 30-year fixed-rate mortgage is 3.375%.
  • The latest rate on a 15-year fixed-rate mortgage is 2.533%.
  • The latest rate on a 5/1 jumbo ARM is 2.891%.
  • The latest rate on a 7/1 conforming ARM is 4.293%.
  • The latest rate on a 10/1 conforming ARM is 4.275%.

Current 30-year fixed mortgage rates

  • The 30-year rate is 3.375%.
  • That's a one-day decrease of 0.016 percentage points.
  • That's a one-month decrease of 0.253 percentage points.

A 30-year fixed-rate mortgage will have a steady interest rate and a monthly payment that won't change over the full term of the loan. By making the required monthly payments, you'll pay the mortgage off in 360 months unless you refinance or sell the home. You can also shorten the term by paying extra toward the principal monthly or in a lump sum.

The interest rate on a 30-year loan will be higher than that on some other loans, but the monthly payments will be lower because you're spreading the payments over a longer time period. You'll pay more in overall interest with a 30-year loan, however, because you're paying a higher rate for a longer time. By making extra mortgage payments towards the principal you can save on the interest.

A 30-year loan is the most popular mortgage loan since borrowers tend to prefer the lower monthly payments.

Current 15-year fixed mortgage rates

  • The 15-year rate is 2.533%.
  • That's a one-day decrease of 0.009 percentage points.
  • That's a one-month decrease of 0.147 percentage points.

The interest rate and monthly payments on a 15-year fixed-rate mortgage also won't change over the term of the loan. You'll pay the mortgage off in 180 months unless you pay extra each month, refinance or sell the home.

A 15-year loan will have a lower interest rate than a 30-year loan, but the monthly payments will be higher because the balance is being paid off over a shorter term. However, because you're paying a lower rate for a shorter time, you'll pay less in total interest.

For borrowers who can want to save on interest and pay the loan off faster, a 15-year loan could be the right choice.

Current 5/1 jumbo adjustable-rate mortgage rates

  • The 5/1 ARM rate is 2.891%.
  • That's a one-day decrease of 0.021 percentage points.
  • That's a one-month decrease of 0.103 percentage points.

The interest rate on an adjustable-rate mortgage will be fixed for a pre-determined number of years and then change, usually every year after the fixed-rate period ends. As a result, your monthly payment will be fixed at first but will vary once the rate starts changing.

A 5/1 adjustable-rate loan will have a fixed rate and monthly payment for five years, then reset every year after. The loan is paid off in full after 360 months unless you refinance or sell the home. Other common adjustable-rate terms include a 7/1 and a10/1.

The interest rate on a 5/1 ARM will be among the lowest available on the market, making it an attractive for borrowers who don't plan on staying in the home long term. Keep in mind that if you stay in the home beyond five years, the interest rate could increase at some point.

Current VA, FHA and jumbo loan rates

The average rates for FHA, VA and jumbo loans are:

  • The rate on a 30-year FHA mortgage is 3.087%.
  • The rate on a 30-year VA mortgage is 3.129%.
  • The rate on a 30-year jumbo mortgage is 3.561%.

Current mortgage refinance rates

The average rates for 30-year loans, 15- year loans and 5/1 jumbo ARMs are:

  • The refinance rate on a 30-year fixed-rate refinance is 3.701%.
  • The refinance rate on a 15-year fixed-rate refinance is 2.733%.
  • The refinance rate on a 5/1 jumbo ARM is 3.082%.
  • The refinance rate on a 7/1 conforming ARM is 4.527%.
  • The refinance rate on a 10/1 conforming ARM is 4.872%.

Where are mortgage rates heading this year?

Mortgage rates sunk through 2020. Millions of homeowners responded to low mortgage rates by refinancing existing loans and taking out new ones. Many people bought homes they may not have been able to afford if rates were higher.

In January 2021, rates briefly dropped to the lowest levels on record, but trended higher through the month and into February.

Looking ahead, experts believe interest rates will rise more in 2021, but modestly. Factors that could influence rates include how quickly the COVID-19 vaccines are distributed and when lawmakers can agree on another economic relief package. More vaccinations and stimulus from the government could lead to improved economic conditions, which would boost 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 should stay near historically low levels through the first half of the year, rising slightly later in the year. Even with rising rates, it will still be a favorable time to finance a new home or refinance.

Factors that influence mortgage rates include:

  • The Federal Reserve. The Fed took swift action when the pandemic hit the United States in March of 2020. The Fed announced plans to keep money moving through the economy by dropping the short-term Federal Fund interest rate to between 0% and 0.25%, which is as low as they go. The central bank also pledged to buy mortgage-backed securities and treasuries, propping up the housing finance market. The Fed has reaffirmed its commitment to these policies for the foreseeable future multiple times, most recently at a late January policy meeting.
  • The 10-year Treasury note. Mortgage rates move in lockstep with the yields on the government’s 10-year Treasury note. Yields dropped below 1% for the first time in March 2020 and have been slowly rising since then. Currently, yields have been hovering above 1% since the beginning of the year, pushing interest rates slightly higher. On average, there is typically a 1.8 point “spread” between Treasury yields and benchmark mortgage rates.
  • The broader economy. Unemployment rates and change 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 push interest rates down. Thanks to the pandemic, unemployment levels reached all-time highs early last year and have not yet recovered. GDP also took a hit, and while it has bounced back somewhat, there is still a lot of room for improvement.

Tips for getting the lowest mortgage rate possible

There is no universal mortgage rate that all borrowers receive. Qualifying for the lowest mortgage rates takes a little bit of work and will depend on both personal financial factors and market conditions.

Check your credit score and credit report. Errors or other red flags that may be dragging your credit score down. Borrowers with the highest credit scores are the ones who will get the best rates, so checking your credit report before you start the house-hunting process is key. Taking steps to fix errors will help you raise your score. If you have high credit card balances, paying them down can also provide a quick boost.

Save up money for a sizeable down payment. This will lower your loan-to-value ratio, which means how much of the home’s price the lender has to finance. A lower LTV usually translates to 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 you have the money to finance the home purchase.

Shop around for the best rate. Don’t settle for the first interest rate that a lender offers you. Check with at least three different lenders to see who offers the lowest interest. Also consider different types of lenders, such as credit unions and online lenders in addition to traditional banks.

Also take time to find out about different loan types. While the 30-year fixed-rate mortgage is the most common type of mortgage, consider a shorter-term loan like a 15-year loan or an adjustable-rate mortgage. These types of loans often come with a lower rate than a conventional 30-year mortgage. Compare the costs of all to see which one best fits your needs and financial situation. Government loans — such as those backed by the Federal Housing Authority, the Department of Veterans Affairs and the Department of Agriculture — can be more affordable options for those who qualify.

Finally, lock in your rate. Locking your rate once you’ve found the right rate, loan product and lender will help guarantee your mortgage rate won’t increase before you close on the loan.

Our mortgage rate methodology

Money’s daily mortgage rates show the average rate offered by over 8,000 lenders across the United States the most recent business day rates are available for. Today, we are showing rates for Thursday, April 15. Our rates reflect what a typical borrower with a 700 credit score might expect to pay for a home loan right now. These rates were offered to people putting 20% down and include discount points.

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