Mortgage rates are mixed today. Both 30-year and 15-year fixed-rate mortgages slipped from yesterday, as well as from last week. On the other hand, the average rate for a 5/1 ARM is higher both-day-over-day and week-over-week.
Rates have been hovering around 3.1% for the past three weeks as economic conditions have remained challenging. Still, for borrowers interested in either a home purchase or a mortgage refinance, the low rate environment is still very favorable.
- Today's rate on a 30-year fixed-rate mortgage is 3.083%
- Today's rate on a 15-year fixed-rate mortgage is 2.279%
- Today's rate on a 5/1 jumbo ARM is 2.913%
30-year fixed mortgage rates today
- Today’s average is 3.083%, down 0.022 percentage points from last week.
A 30-year fixed-rate mortgage means that both your interest rates and monthly payments will remain constant throughout the full term of the loan. When compared to a 15-year loan, interest rates will generally be higher, but your payments will be lower, as you're taking twice as long to pay off the debt.
Interest rates on 30-year loans have been near historic lows since the beginning of the year and borrower demand has remained high. Traditionally, 30-year loans have been the most popular loan type, making up around 75% of all originations.
15-year fixed mortgage rate today
- Today’s average is 2.279%, down 00.047 percentage points from last week.
A 15-year fixed-rate mortgage means that your interest rate and monthly payments will not change throughout the term of the loan.
When compared to a 30-year loan, the interest rate will typically be lower. However, because you are paying the loan off in a shorter time period, your monthly payment will be higher. In terms of the total amount of interest paid, you will pay less overall with a 15-year loan versus a 30-year loan.
5/1 jumbo adjustable-rate mortgage rates today
- Today’s average is 2.913%, up 0.087 percentage points from last week
An adjustable-rate mortgage means that your interest rate will remain fixed for a set period of time and then reset after that period has expired. As a result, both your interest rate and your monthly payments can fluctuate. With a 5/1 ARM, your interest rate will be fixed for the first five years of the loan, then reset every year afterward. Other common adjustable-rate terms include 7/1 and 10/1.
Adjustable-rate mortgages historically 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 2.832%.
- Today’s rate on a 30-year VA mortgage is 2.897%.
- Today’s rate on a 30-year jumbo mortgage is 3.544%.
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 3.385%.
- Today’s rate on a 15-year fixed-rate refinance is 2.547%.
- Today’s rate on a 5/1 jumbo ARM is 3.093%.
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.
More from Money:
- Best Mortgage Lenders of 2021
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- 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
- Low Rates Are Putting 15-Year Mortgages — and Big Savings — Within Reach for Millions of Homeowners
Rates are subject to change. All information provided here is accurate as of the publish date.