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Published: Apr 23, 2021 12 min read
Money; Getty Images

Mortgage rates are mixed today with rates for most loan categories higher than yesterday. The average rate on the popular 30-year fixed-rate mortgage, however, is down.

If you're interested in buying a home, the 30-year rate slipped 0.10 percentage points to 3.323%. For those interested in refinancing their home loan, the interest rate on a 30-year loan decreased to 3.641%.

Meanwhile, Freddie Mac's benchmark rate for a 30-year loan slipped back under 3% yesterday for the first time since February. Freddie Mac's rates are updated weekly and reflect rates being offered to the most qualified borrowers. Money's rates are updated daily and reflect an average borrower.

While lower rates can help ease the affordability crunch that has affected home buyers, most experts forecast rates to rise throughout the remainder of the year. The question remains how long these sub-3% rates will last.

  • The latest rate on a 30-year fixed-rate mortgage is 3.323%.
  • The latest rate on a 15-year fixed-rate mortgage is 2.422%.
  • The latest rate on a 5/1 jumbo ARM is 3.746%.
  • The latest rate on a 7/1 conforming ARM is 4.163%.
  • The latest rate on a 10/1 conforming ARM is 3.902%.

Current 30-year fixed mortgage rates

  • The 30-year rate is 3.323%.
  • That's a one-day decrease of 0.010 percentage points.
  • That's a one-month decrease of 0.197 percentage points.

If you choose a 30-year fixed-rate mortgage, the interest rate and monthly payment will remain unchanged for as long as you have the loan. You'll pay the debt off in 360 months unless you pay extra, refinance the loan or sell the home.

The interest rate on a 30-year loan will be higher than a shorter term loan like a 15-year loan, but your monthly payments will be lower because you're spreading the payments out for a longer time. Although the monthly payments are lower, you will pay more in total interest since you'll be paying a higher rate for twice as long.

The lower monthly payments make a 30-year loan the go-to for a majority of home loan borrowers.

Current 15-year fixed mortgage rates

  • The 15-year rate is 2.422%.
  • That's a one-day decrease of 0.032 percentage points.
  • That's a one-month decrease of 0.176 percentage points.

If you decide to go with a 15-year fixed-rate mortgage instead, it will have a constant interest rate and monthly payment for the life of the loan. You'll pay the loan off in 180 months unless you make extra payments, refinance or sell the home.

A 15-year loan will have a lower interest rate than a 30-year loan. However, the monthly payments will be higher since you're paying the loan off in half the time. A big advantage of a 15-year loan, on the other hand, is that you actually pay less in total interest because you're paying a lower rate over a shorter time.

Homeowners who can afford the higher payments may find a 15-year mortgage to be preferable because of the savings on the overall cost of the loan.

Current 5/1 jumbo adjustable-rate mortgage rates

  • The 5/1 ARM rate is 3.746%.
  • The rate remained unchanged from yesterday.
  • That's a one-month increase of 0.793 percentage points.

You can also opt for an adjustable-rate mortgage. With an ARM, the interest rate will be fixed for a pre-specified number of years, then reset on a yearly basis. The monthly payments on the loan will be fixed at first as well but can change once the interest rate becomes variable.

A common term is the 5/1 ARM. With this type of loan, the interest rate will be fixed for the first five years of the loan, then reset every year after. The loan will be paid off after 360 months. Other common ARM terms include a 7/1 and a 10/1.

An adjustable-rate loan could be a good option if you're not planning on staying in the home long-term. However, you should be aware that if you keep the home beyond the fixed-rate period, the interest rate could increase.

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 3.043%.
  • The rate on a 30-year VA mortgage is 3.123%.
  • The rate on a 30-year jumbo mortgage is 3.609%.

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 3.641%.
  • The refinance rate on a 15-year fixed-rate refinance is 2.647%.
  • The refinance rate on a 5/1 jumbo ARM is 3.988%.
  • The refinance rate on a 7/1 conforming ARM is 4.496%.
  • The refinance rate on a 10/1 conforming ARM is 4.521%.

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 22. 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.