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Published: Mar 24, 2021 12 min read
Money; Getty Images

Mortgage rates are easing for the second day in a row. The rate on a 30-year fixed-rate purchase loan is now below 3.6% for the first time since last week. Most other purchase loan categories were down and refinance rates were mostly lower too.

Today's slightly lower rates are good news for borrowers who are interested in either buying a home or refinancing a mortgage. Rates are up from record lows, but are still well below where they were just a year ago.

  • The average rate on a 30-year fixed-rate mortgage is 3.578% today.
  • The average rate on a 15-year fixed-rate mortgage is 2.658% today.
  • The average rate on a 5/1 jumbo ARM is 2.988% today.
  • The average rate on a 7/1 conforming ARM is 4.643% today.
  • The average rate on a 10/1 conforming ARM is 4.724% today.

Today's 30-year fixed mortgage rates

  • The 30-year rate is 3.578%.
  • That's a one-day decrease of 0.046 percentage points.
  • That's a one-month increase of 0.195 percentage points.

With a 30-year fixed-rate loan, both the interest rate and required monthly payment will remain the same over the full term of the loan. If you pay the required monthly amount, the mortgage will be paid off in 360 months unless you refinance the loan or sell the house. By paying more than the minimum, you can pay the debt off faster.

The average interest rate on a 30-year loan is higher than on a shorter-term loan like a 15-year. However, because the payments are made over a longer-term, the monthly payments will be lower. Keep in mind that even though the monthly payments are lower, you'll pay more in total interest with a 30-year loan because you're paying a higher interest rate for a longer period of time. Still, the low monthly payments make a 30-year mortgage the most popular home loan among borrowers.

Today's 15-year fixed mortgage rates

  • The 15-year rate is 2.658%.
  • That's a one-day decrease of 0.039 percentage points.
  • That's a one-month increase of 0.122 percentage points.

Just as with a 30-year fixed-rate loan, the interest rate and monthly payment on a 15-year fixed-rate mortgage won't change over the life of the loan. The debt will be paid off in 180 months unless you pay more than the required monthly amount, refinance the loan or sell the home.

The interest rate on a 15-year loan will be lower than the rate on a long-term loan. On the other hand, the monthly payment will be higher because you're paying the debt off in half the time.

In the long run, you'll pay less in total interest with a 15-year loan because you're paying a lower interest rate over a shorter period of time. Borrowers who are able to cover a higher monthly payment may opt for a 15-year loan in exchange for savings on interest and paying the debt off faster.

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

  • The 5/1 ARM rate is 2.988%.
  • That's a one-day decrease of 0.005 percentage points.
  • That's a one-month increase of 0.056 percentage points.

An adjustable-rate mortgage will actually have a fixed interest rate during the first several years of the loan term, then reset afterward, typically on a yearly basis. As a result, the monthly payment won't change during the fixed-rate period but can change in response to changes in the rate.

A 5/1 adjustable-rate mortgage, for example, will have a fixed rate during the first five years of the loan, then reset every year after. Other ARM terms include a 7/1 and 10/1. Adjustable-rate loans will have a full term of 360 months.

The initial interest rate on a 5/1 ARM will usually be among the lowest on the market. The low rate makes it popular among borrowers who don't plan on staying in the home longer than the initial fixed-rate period. However, keep in mind that if you stay in the home longer than five years, the interest rate could increase.

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 3.416%.
  • The rate on a 30-year VA mortgage is 3.481%.
  • The rate on a 30-year jumbo mortgage is 3.693%.

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 3.856%.
  • The refinance rate on a 15-year fixed-rate refinance is 2.991%.
  • The refinance rate on a 5/1 jumbo ARM is 3.569%.
  • The refinance rate on a 7/1 conforming ARM is 4.773%.
  • The refinance rate on a 10/1 conforming ARM is 4.839%.

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 Tuesday, March 23. 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.