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Published: Mar 25, 2021 12 min read
Money; Getty Images

Mortgage rates are down once again today with rates for all types of purchase loans declining. The rate for a 30-year fixed-rate loan is hovering around 3.5%. Rates for refinance loans were mixed, with most rates decreasing. The exception was the 10/1 ARM.

Today is the third straight day rates have declines. It remains to be seen whether this is a temporary rest before they started rising again or a longer-term pause. Lower rates means borrowers more can take advantage of historically low rates to buy a house or refinance a mortgage.

  • The average rate on a 30-year fixed-rate mortgage is 3.55% today.
  • The average rate on a 15-year fixed-rate mortgage is 2.635% today.
  • The average rate on a 5/1 jumbo ARM is 2.976% today.
  • The average rate on a 7/1 conforming ARM is 4.322% today.
  • The average rate on a 10/1 conforming ARM is 4.375% today.

Current 30-year fixed mortgage rates

  • The 30-year rate is 3.55%.
  • That's a one-day decrease of 0.028 percentage points.
  • That's a one-month increase of 0.136 percentage points.

The interest rate on a 30-year fixed-rate mortgage won't change over the term of the loan. As a result, the monthly payments will stay the same as well. The debt will be paid off in 360 months unless you pay more than the required monthly minimum, refinance the mortgage or sell the home.

The rate on a 30-year loan will be higher than on a 15-year loan, but the monthly payments will be lower. This is because the balance is stretched out over a longer period of time. However, by paying a higher interest rate over more months you'll pay more in overall interest with a longer loan.

Despite being more expensive in the long run, the lower monthly payments make a 30-year mortgage the most popular among borrowers.

Current 15-year fixed mortgage rates

  • The 15-year rate is 2.635%.
  • That's a one-day decrease of 0.023 percentage points.
  • That's a one-month increase of 0.088 percentage points.

The interest rate on a 15-year fixed-rate mortgage will remain unchanged over the life of the loan and the monthly payment will also stay the same. The loan will be completely paid off in 180 months unless you pay extra, refinance the mortgage or sell the home.

The interest rate on a 15-year loan will be lower than if you took out a 30-year, but the monthly payments will be higher because you're paying the balance off in half the time. You'll save on total interest with a 15-year loan compared to a 30-year, as you're paying a lower rate over a shorter period of time.

Fifteen-year loans are popular among borrowers who don't mind the higher monthly payments in exchange for savings on interest and the opportunity to pay the debt off faster.

Current 5/1 jumbo adjustable-rate mortgage rates

  • The 5/1 ARM rate is 2.976%.
  • That's a one-day decrease of 0.012 percentage points.
  • That's a one-month increase of 0.041 percentage points.

Adjustable-rate loans will have a fixed rate during the first few years of the loan term. During this time, the monthly payment will not change. Once the fixed-rate period expires, both the interest rate and monthly payment can change in response to market conditions. The loan is paid off in full in 360 months.

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. The monthly payment will also be fixed during the first five years but can either increase or decrease according to changes in the rate. Other common ARMs are a 7/1 and a 10/1.

The initial interest rate on a 5/1 ARM will normally be among the lowest you can find. The low initial rate makes it attractive to borrowers who plan on selling the home before the fixed-rate period is over. However, ARM borrowers should be aware that rates can increase over the long term if they decide to stay in the home.

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 3.325%.
  • The rate on a 30-year VA mortgage is 3.411%.
  • The rate on a 30-year jumbo mortgage is 3.677%.

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 3.836%.
  • The refinance rate on a 15-year fixed-rate refinance is 2.959%.
  • The refinance rate on a 5/1 jumbo ARM is 3.548%.
  • The refinance rate on a 7/1 conforming ARM is 4.75%.
  • The refinance rate on a 10/1 conforming ARM is 4.861%.

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 Wednesday, March 24. 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.