Today's Mortgage & Refinance Rates — February 23, 2021

Interest rates trended higher today for all loan types, with the 30-year fixed-rate mortgage coming in just under 3.3%. It's the first time the average 30-year rate has been that high since the first week of December 2020. Rates have been trending higher since hitting a low in early January.

However, the increases had been gradual until this week, when rates have been edging higher at a slightly faster pace. Still, historically speaking, rates are very low and very favorable for those interested in purchasing a home or refinancing a mortgage.

The average rate on a 30-year fixed-rate mortgage is 3.299% today.
The average rate on a 15-year fixed-rate mortgage is 2.487% today.
The average rate on a 5/1 jumbo ARM is 2.942% today.
The average rate on a 7/1 jumbo ARM is 2.941% today.
The average rate on a 10/1 jumbo ARM is 4.178% today.

30-year fixed mortgage rates today

Today's 30-year rate is 3.299%.
That's a one-day increase of 0.043 percentage points.
That's a one-month increase of 0.243 percentage points.

The interest rate on fixed-rate mortgages has been trending higher for the past few weeks. With a 30 year fixed-rate mortgage, your interest rate will remain fixed for the full term of the loan. As a result, your monthly payment will also remain fixed for through the life of the loan, unless you refinance or sell before the 30-year period is up.

The interest rate on a 30-year loan will tend to be higher than that of a shorter-term loan, like a 15-year mortgage, for example. Despite having a higher rate, a 30-year loan will typically have lower monthly payments than a 15-year loan because you're spreading the payments out over a longer period of time. For this reason, the 30-year fixed-rate mortgage is the most common type of home loan.

15-year fixed mortgage rate today

Today's 15-year rate is 2.487%.
That's a one-day increase of 0.054 percentage points.
That's a one-month increase of 0.174 percentage points.

As with a 30-year fixed-rate loan, the interest rate on a 15-year fixed-rate mortgage will remain unchanged through the full term of the loan. Your monthly payment will also remain unchanged until you either pay it off or refinance or sell your home.

The average interest rate on 15-year loans is typically lower than on 30-year loans. Because of the shorter payoff period and lower interest rate, you'll save on the overall interest paid over the life of the loan compared to the 30-year. However, your monthly payment will be higher.

5/1 jumbo adjustable-rate mortgage rates today

Today's 5/1 ARM rate is 2.942%.
That's a one-day increase of 0.015 percentage points.
That's a one-month increase of 0.096 percentage points.

Adjustable-rate mortgages will have an initial period during which your interest rates will remain fixed. After that initial period, the rate will then adjust according to market conditions, which means that it could either increase or decrease. Your monthly payments will follow the same pattern. They will be unchanged for the initial fixed-interest period, but they could change afterward once the interest rate resets.

The common terms for adjustable-rate mortgages are the 5/1, where the first five years have a fixed interest rate and then reset annual, as well as the 7/1 ARM and the 10/1 ARM. The total payoff period is typically 30-years.

The initial interest rates on ARMs tend to be some of the lowest available on the market, particularly for the 5/1. However, ever since the onset of the COVID-19 pandemic, those with excellent credit can often find lower rates on a 30-year fixed-rate mortgage.

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 3.277%.
The latest rate on a 30-year VA mortgage is 3.219%.
The latest rate on a 30-year jumbo mortgage is 3.589%.

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 3.724%.
The latest refinance rate on a 15-year fixed-rate refinance is 2.813%.
The latest refinance rate on a 5/1 jumbo ARM is 3.233%.
The latest refinance rate on a 7/1 jumbo ARM is 3.487%.
The latest refinance rate on a 10/1 jumbo ARM is 4.698%.

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, 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, 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 Monday, February 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.

Today's Mortgage Rates Trending Higher | February 23, 2021