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Published: Feb 10, 2021 11 min read
Money; Getty Images

The average rate for a 30-year fixed-rate mortgage is down today, but still higher than a week ago. Today's mortgage rates are lower than yesterday's across all home loan types and for both buyers and homeowners looking to refinance. Lower daily rates are good news for those interested in either buying a home or refinancing a mortgage.

However, rates are still trending higher week-over-week and compared to a month ago. While rates have been slowly rising since early January, historically speaking they are still very low, making it a good time to buy or refinance a home.

  • Today's rate on a 30-year fixed-rate mortgage is 3.109%
  • Today's rate on a 15-year fixed-rate mortgage is 2.302%
  • Today's rate on a 5/1 jumbo ARM is 2.858%

Current 30-year fixed mortgage rates

  • Today’s average is 3.109%, up 0.007 percentage points from last week.

With a 30-year fixed-rate mortgage, your monthly payment will remain constant throughout the term of the loan. The interest rate won't change either, as it is fixed for the entire 30 year period. With today's historically low rates, borrowers taking out home purchase or refinance loans can lock in low monthly payments.

While your interest rates will be higher with a 30-year loan when compared to a 15-year loan, your mortgage payments will be lower, as you're spreading the loan payments out over a longer period of time (360 months for a 30-year versus 180 months for a 15-year). However, you will pay more interest over the full term of the loan.

Current 15-year fixed mortgage rate

  • Today’s average is 2.302%, down 0.037 from last week.

A 15-year fixed-rate mortgage typically offers a lower interest rate than a 30-year fixed-rate mortgage. Both the interest rate and the monthly payments will remain constant throughout the term of the loan. Because you're paying a lower interest rate for a shorter period of time, you will pay less in total interest when compared to a 30-year loan.

However, because you are paying the loan over a shorter period of time, your monthly payments will be higher than those of a 30-year loan.

Current 5/1 jumbo adjustable-rate mortgage rates

  • Today’s average is 2.858%, up 0.032 percentage points from last week

An adjustable-rate mortgage will have an initial period where the interest rate is fixed. Your monthly payments will also be constant during this fixed-rate period. Once the initial fixed period ends, your interest rate will reset, usually every year, according to market conditions. As a result, your interest rates and monthly payments can fluctuate. A 5/1 loan means your rate will be fixed for the first five years of the loan, then reset every year afterward. Other adjustable-rate loan terms include 7/1 and 10/1.

Adjustable rate mortgages typically have the lowest interest rates when compared to 30 and 15-year fixed-rate, making them attractive for some buyers looking for lower monthly payments. Today, however, mortgage rates for fixed-rate loans are lower than ARMs, making them less attractive.

VA, FHA, and jumbo loan rates today

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

  • Today’s rate on a 30-year FHA mortgage is 2.884%.
  • Today’s rate on a 30-year VA mortgage is 2.926%.
  • Today’s rate on a 30-year jumbo mortgage is 3.58%.

Mortgage refinance rates today

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

  • Today’s rate on a 30-year fixed-rate refinance is 3.438%.
  • Today’s rate on a 15-year fixed-rate refinance is 2.56%.
  • Today’s rate on a 5/1 jumbo ARM is 3.137%.

Where are mortgage rates heading?

Mortgage interest rates dropped throughout 2020, as policy makers and investors adjusted to the economic fallout from the COVID-19 pandemic. To start 2021, rates briefly dropped to the lowest levels on record (2.65%, according to Freddie Mac, which tracks weekly rates for the most qualified borrowers). Rates have trended higher in the weeks since.

Millions of homeowners responded to low mortgage rates by refinancing existing loans and taking out new ones, often on homes they may not have been able to afford if rates were higher. Lately the trend has been for larger, more spacious homes away from urban centers.

Looking ahead, experts believe interest rates will rise in 2021, but modestly. Factors that could influence rates include how quickly the COVID-19 vaccines are distributed and quickly Congress and Biden administration can agree on an economic package. More vaccinations and stimulus from the government could all lead to improved economic conditions and 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.

Factors that influence mortgage rates include:

  • The Federal Reserve. The Federal Reserve took swift action when the pandemic first hit the United States in March of 2020. The Fed announced plans to maintain liquidity by dropping the short-term Federal Fund interest rate to between 0% and 0.25%. The central bank also pledged to buy mortgage-backed securities and treasuries. As recently as late January, the Fed has reaffirmed its commitment to these policies for the foreseeable future.
  • 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, 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 levels and gross domestic product are important indicators of the overall health of the economy. When unemployment and GDP 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, or 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 previous business day. 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.