Mortgage rates are down again for almost all loan types today, with the sole exception being the 10/1 adjustable-rate loan. The rate on a 30-year fixed-rate purchase loan dropped to 3.333%, the lowest it has been since late February. Rates to refinance were down across the board.
Today's decrease marks the third consecutive day of declining rates after they rose briefly on Monday. Lower rates good news for anyone interested in buying a house and increase the number of people who could save by refinancing their mortgage.
- The latest rate on a 30-year fixed-rate mortgage is 3.333%.
- The latest rate on a 15-year fixed-rate mortgage is 2.454%.
- The latest rate on a 5/1 jumbo ARM is 3.746%.
- The latest rate on a 7/1 conforming ARM is 4.142%.
- The latest rate on a 10/1 conforming ARM is 4.007%.
Today's 30-year fixed mortgage rates
- The 30-year rate is 3.333%.
- That's a one-day decrease of 0.046 percentage points.
- That's a one-month decrease of 0.245 percentage points.
A 30-year fixed-rate mortgage will have a consistent interest rate and monthly payments for however long you keep the loan. You'll pay the mortgage off in 360 months unless you make extra payments, refinance or sell the home.
The interest rate on a 30-year loan will be higher when compared to a shorter-term loan like a 15-year mortgage. On the other hand, the monthly payments will be lower because the balance is being spread out over a longer time. Despite the lower payments, you'll end up paying more in total interest with a 30-year loan because you'll be paying a higher interest rate for twice as long.
Most mortgage borrowers in the United States choose a 30-year mortgage because of the lower monthly payments.
Today's 15-year fixed mortgage rates
- The 15-year rate is 2.454%.
- That's a one-day decrease of 0.049 percentage points.
- That's a one-month decrease of 0.204 percentage points.
Like the go-to 30-year, a 15-year fixed-rate mortgage will maintain the same interest rate and monthly payment for as long as you have the loan. You'll pay it off in 180 months unless you pay extra, refinance or sell.
When you compare the interest rate on a 15-year loan to the rate on a longer-term loan like a 30 year, the 15-year rate will be lower. However, because you're paying the loan off in half the time, the monthly payments will be higher. Even though the payments are higher, you'll actually pay less in total interest because you'll be paying a lower rate for less time.
A 15-year mortgage could be a good option if you can afford the higher payments.
Today's 5/1 jumbo adjustable-rate mortgage rates
- The 5/1 ARM rate is 3.746%.
- That's a one-day decrease of 0.018 percentage points.
- That's a one-month increase of 0.758 percentage points.
The interest rate and monthly payment on an adjustable-rate mortgage will be fixed for the first few years of the loan. Once that fixed period ends, the interest rate will reset, typically on a yearly basis. Once the rate starts to change, your monthly payment can change as well.
If you choose a 5/1 ARM, the interest rate won't change during the first five years of the loan. Afterward, the rate will reset every year until the end of the loan term. ARMs will be paid off in 30 years unless you refinance or sell the home. You can also choose a 7/1 or a 10/1 ARM.
A 5/1 adjustable-rate loan will have one of the lowest interest rates you can find, making it a good option if you don't plan on keeping the home beyond five years. If you do decide to stay in the home longer, keep in mind that the interest rate can increase at some point.
Today's 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 3.047%.
- The rate on a 30-year VA mortgage is 3.089%.
- The rate on a 30-year jumbo mortgage is 3.606%.
Today's 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 3.663%.
- The refinance rate on a 15-year fixed-rate refinance is 2.674%.
- The refinance rate on a 5/1 jumbo ARM is 3.988%.
- The refinance rate on a 7/1 conforming ARM is 4.465%.
- The refinance rate on a 10/1 conforming ARM is 4.529%.
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 Wednesday, April 20. 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.
More from Money:
- Best Mortgage Lenders of 2021
- Mortgage Calculator by Money
- How to Get the Lowest Mortgage Rate: A Step-by-Step Guide
- How to Get Preapproved for a Mortgage: A Step-by-Step Guide for Homebuyers
- Is Now a Good Time to Refinance My Mortgage? A Decision-Making Guide
- What Is an FHA Loan?
- You're Only Ready to Buy a House if You Can Answer 'Yes' to These 7 Questions
- Mortgage Rates Are on the Rise, and It's Messing With People's Home Buying Plans
Rates are subject to change. All information provided here is accurate as of the publish date.