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Published: Feb 17, 2021 11 min read
Money; Getty Images

The 30-year fixed-rate loan has edged close to 3.2% for the first time since mid-January. Interest rates are up across the board following a long holiday weekend for part of the country. Today's rates are higher when compared to both yesterday's rates and last Wednesday's rates.

Even with today's increases, mortgage rates remain near record lows. It is still a great time for borrowers looking to finance a home purchase to lock in a low rate.

  • The average rate on a 30-year fixed-rate mortgage is 3.188% today.
  • The average rate on a 15-year fixed-rate mortgage is 2.397% today.
  • The average rate on a 5/1 jumbo ARM is 2.962% today.

Current 30-year fixed mortgage rates

  • Today's 30-year rate is 3.188%.
  • That's a one-day increase of 0.058 percentage points.
  • That's a one-week increase of 0.079 percentage points

A 30-year-fixed rate means that you will finish paying off your loan in 30 years unless you sell the home or refinance before that time. Your interest rate will be fixed throughout the term of the loan and your monthly payments will also remain unchanged.

The interest rate on a 30-year mortgage is typically higher when compared to the interest rate on a shorter-term loan, like a 15-year mortgage. Because you're paying off the loan over a longer period of time, your monthly payments will be lower than those of a 15-year, but you will pay more in overall interest.

Current 15-year fixed mortgage rate

  • Today's 15-year rate is 2.397%.
  • That's a one-day increase of 0.070 percentage points.
  • That's a one-week increase of 0.095 percentage points.

A 15-year fixed-rate means it will take 15 years to completely pay off the loan. As with a 30-year fixed loan, your interest rate will be fixed throughout the full term of the mortgage, and your monthly payments won't change.

Compared to a 30-year loan, the interest rate on a 15-year mortgage is typically lower. As a result, you'll pay less in interest over the full term of the loan. Because you're spreading the payments over half the time, however, your monthly payments will be higher than those of a 15-year loan.

Current 5/1 jumbo adjustable-rate mortgage rates

  • Today's 5/1 ARM rate is 2.962%.
  • That's a one-day increase of 0.057 percentage points.
  • That's a one-week increase of 0.104 percentage points.

An adjustable-rate mortgage means that your interest rate will change over the life of the loan. In the case of a 5/1 ARM, your rate will be fixed for the first five years of the loan, then change every year after according to market conditions. As a result, your interest rate could either increase or decrease every year after the initial fixed-rate period. If the interest rate changes, your monthly payments will change as well.

Adjustable-rate mortgages usually have lower initial interest rates than fixed-rate loans. However, in today's pandemic-altered market, the 30-year mortgage often has a lower average rate.

Current VA, FHA, and jumbo loan rates

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

  • The latest rate on a 30-year FHA mortgage is 3.158%.
  • The latest rate on a 30-year VA mortgage is 3.096%.
  • The latest rate on a 30-year jumbo mortgage is 3.561%.

Current mortgage refinance rates

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

  • The latest refinance rate on a 30-year fixed-rate refinance is 3.578%.
  • The latest refinance rate on a 15-year fixed-rate refinance is 2.629%.
  • The latest refinance rate on a 5/1 jumbo ARM is 3.179%.

Where are mortgage rates heading?

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, 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. Today, we are showing rates for Tuesday, February 16. 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.