Mortgage rates increased every day this week. For the first time since mid-November, the average rate for a 30-year fixed rate mortgage is now above 3.6%. Average rates are higher than they were a week ago for most other loan categories, with the exception of some adjustable-rate options.
Though rates have been trending higher since January, the increases have been relatively slow and rates are still considered low historically. Many well-qualified buyers who want to either buy a house or refinancing a mortgage can still find attractive rates.
- The average rate on a 30-year fixed-rate mortgage is 3.628% today.
- The average rate on a 15-year fixed-rate mortgage is 2.68% today.
- The average rate on a 5/1 jumbo ARM is 2.994% today.
- The average rate on a 7/1 conforming ARM is 4.697% today.
- The average rate on a 10/1 conforming ARM is 4.614% today.
Current 30-year fixed mortgage rates
- The 30-year rate is 3.628%.
- That's a one-day increase of 0.02 percentage points.
- That's a one-month increase of 0.381 percentage points.
The interest rate and monthly payment on a 30-year fixed-rate mortgage won't change for the length of the loan. By making the required monthly payments, the loan will be paid off in 360 months unless you pay extra, refinance or sell the home.
Compared to a shorter-term mortgage like a 15-year loan, the rate on a 30-year mortgage will be higher. The monthly payments, on the other hand, will be lower because the loan balance is being spread out over a longer time period. Despite the lower payments, you'll pay more in overall interest on a 30-year than a 15-year since you'll be paying a higher rate over a longer term.
Low monthly payments make a 30-year mortgage the most popular choice for home loan borrowers.
Current 15-year fixed mortgage rates
- The 15-year rate is 2.68%.
- That's a one-day increase of 0.013 percentage points.
- That's a one-month increase of 0.258 percentage points.
Just as with other fixed-rate mortgages, the interest rate and monthly payment on a 15-year fixed-rate mortgage won't change over the full term of the loan. The loan will be complete in 180 months unless you pay extra, refinance or sell the home.
The interest rate on a 15-year loan will be lower than that on a 30-year loan. The monthly payments will be higher though, as the balance is spread out over a shorter period of time. However, you'll pay less in total interest because you're paying a lower rate over half the time.
Borrowers who can afford the higher monthly payments may find a 15-year mortgage more attractive because they can save on interest and pay the debt off faster.
5/1 jumbo adjustable-rate mortgage rates today
- The 5/1 ARM rate is 2.985%.
- That's a one-day increase of 0.009 percentage points.
- That's a one-month increase of 0.068 percentage points.
With an adjustable rate mortgage, the interest rate will actually be fixed during the first years of the loan. Once that period ends, the rate can change in response to market conditions, usually resetting once a year. As a result, the monthly payment on an ARM will change every time the interest rate changes.
For example, a 5/1 ARM will have a fixed rate and monthly payment during the first five years of the mortgage, then reset every year. Other common ARM options are 7/1 and 10/1 terms.
The interest rate on a 5/1 adjustable-rate loan will typically be lower than that of a 30-year loan during the first five years. The initial low rate makes it a popular choice for borrowers who don't plan on staying in the home beyond the fixed rate period, but the rate may rise substantially later on.
VA, FHA and jumbo loan rates today
The average rates for FHA, VA and jumbo loans are:
- The rate a 30-year FHA mortgage is 3.575%.
- The rate on a 30-year VA mortgage is 3.611%.
- The rate on a 30-year jumbo mortgage is 3.73%.
Mortgage refinance rates today
The average rates for 30-year loans, 15- year loans and 5/1 jumbo ARMs are:
- The refinance rate on a 30-year fixed-rate refinance is 3.896%.
- The refinance rate on a 15-year fixed-rate refinance is 3.013%.
- The refinance rate on a 5/1 jumbo ARM is 3.582%.
- The refinance rate on a 7/1 conforming ARM is 4.882%.
- The refinance rate on a 10/1 conforming ARM is 4.853%.
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, which means 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 Thursday, March 18. 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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- 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.