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Published: Feb 12, 2021 10 min read
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Interest rates stopped their two-day slide. With rates for most purchase loans edging higher today compared to yesterday. The exception is the 5/1 ARM, which is unchanged.

Rates for refinance loans, on other hand, are higher across the board. Week-over-week, however, rates are lower across almost all loan types with the exception of jumbo and the ARM, which are higher.

Even with today's increase, mortgage rates are near historic lows. Borrowers looking to refinance their mortgages or purchase new homes can do so and lock in a lower monthly payment.

  • Today's rate on a 30-year fixed-rate mortgage is 3.111%
  • Today's rate on a 15-year fixed-rate mortgage is 2.313%
  • Today's rate on a 5/1 jumbo ARM is 2.913%

Today's 30-year fixed mortgage rates

  • Today’s average is 3.111%, down 0.019 percentage points from last week.

A fixed-rate mortgage guarantees your interest rate will not change over the full term of the loan. As a result, your monthly payment won't change either. The most popular type of fixed-rate mortgage is the 30-year loan, favored by 75% of all borrowers.

When compared to a 15-year fixed-rate loan, the interest rate on a 30-year loan will be higher but the monthly payment will be lower, as you're spreading the payments out over a longer period of time. Because you're paying interest for twice the amount of time, you'll pay more in overall interest with a 30-year loan.

Today's 15-year fixed mortgage rate

  • Today’s average is 2.279%, down 0.024 percentage points from last week.

As with a 30-year loan, both your interest and monthly payments will remain unchanged through the full term of the loan.

Some borrowers prefer a 15-year fixed-rate mortgage over a 30-year loan because the interest rate tends to be lower. As a result, the overall interest paid over the life of the loan will be less than that paid on a 30-year loan. However, because you're paying off the loan in half the time, your monthly payments will be higher.

Today's 5/1 jumbo adjustable-rate mortgage rates

  • Today’s average is 2.913%, up 0.067 percentage points from last week

Adjustable-rate mortgages, as opposed to fixed-rate mortgages, will have fluctuating interest rates. Typically, an ARM will have an initial fixed-rate period during which your interest rates and monthly payments will remain constant. Once that period ends, your interest rate will vary according to market conditions. As a result, your mortgage payment can change.

With a 5/1 mortgage, your rate and payments will be constant through the first five years of the loan. Once that initial period ends, your interest rate will reset every year and your monthly payment could change. The interest rate on ARMs is usually lower than on fixed-rate loans. However, in today's market, fixed-rate loans are often lower.

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 2.892%.
  • Today’s rate on a 30-year VA mortgage is 2.954%.
  • Today’s rate on a 30-year jumbo mortgage is 3.524%.

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 3.417%.
  • Today’s rate on a 15-year fixed-rate refinance is 2.573%.
  • Today’s rate on a 5/1 jumbo ARM is 3.142%.

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.