We want to help you make more informed decisions. Certain links on this page – clearly marked – may direct you to a partner website and earn us a referral commission. For more information, see How we make money.
What we’re seeing today is that a handful of major mortgage rates have gone down. Both 30-year and 15-year fixed mortgage rates have come down. We are also witnessing a contraction in the average rate of mortgage loans at adjustable rate (ARM) 5/1.
Consult the prices of the day:
Current mortgage refinancing rates
There is good news if you are considering refinancing, as the average rates for 15-year and 30-year fixed refinance loans have declined. If you’re considering a 10-year refinance loan, just be aware that average rates have gone down as well.
The refinancing averages for 30-year, 15-year and 10-year loans are:
Compare mortgage rates nationwide from various lenders.
30-year fixed rate mortgage rates
The 30-year average fixed mortgage interest rate is 3.07%, down 6 basis points from last week.
You can use NextAdvisor’s mortgage calculator to determine your monthly payments and understand the impact of adding additional payments on your loan. The mortgage calculator can also show you how much interest you will pay over the life of the loan.
15-year fixed rate mortgage rates
The median rate for a 15-year fixed-rate mortgage is 2.39%, which is 5 basis points down from seven days ago.
The monthly payment on a 15-year fixed rate mortgage is more than what you would pay on a 30-year mortgage. However, 15-year loans have huge advantages: you will save thousands of dollars in interest and pay off your loan much faster.
Variable rate mortgage rates 5/1
A 5/1 ARM has an average rate of 3.00%, a decrease of 33 basis points from the same period last week.
An adjustable rate mortgage is ideal for borrowers who will sell or refinance before the rate changes. If not, their interest rates could end up being significantly higher after a rate adjustment.
For the first five years, a 5/1 ARM will typically have a lower interest rate than a 30-year fixed mortgage. Just keep in mind that your payment could end up being several hundred dollars higher after a rate adjustment, depending on the terms of your loan.
Mortgage rate trends
To get an idea of where the mortgage rate may move, use the information collected by Bankrate, which is owned by the same parent company as NextAdvisor. Looking at historic mortgage rates, we see low rates like never before. The table below compares average rates today to what they were a week ago, and is based on information provided to Bankrate by lenders across the country:
Prices as of July 5, 2021.
A number of factors can influence mortgage rates, from inflation to unemployment. In general, inflation results in higher interest rates and vice versa. The dollar loses value with rising inflation, making mortgage-backed securities less attractive to investors, leading to lower prices and higher yields. And if yields rise, interest rates become more expensive for borrowers.
While there isn’t a single entity that sets mortgage rates, Federal Reserve Bank policies can have an impact on what happens with interest rates. And he expressed his desire to keep rates low for the foreseeable future to help the economic recovery. To achieve this, it kept the federal funds rate (the overnight interest rate for interbank lending) at around zero and committed to buying a large number of mortgage-backed securities each month. These two actions will help keep rates low.
Is it a good idea to lock in my mortgage rate now?
It is impossible to know in which direction mortgage rates will go overnight. This is why a mortgage rate foreclosure is such a useful tool, because it protects you if rates go up. And with interest rates so low right now, you should lock in your rate as soon as you can.
When you lock in your rate, ask your lender how long the lockout is valid. A rate lockout can last anywhere from 30 to 60 days, which usually gives you enough time to close before the lockout expires. If you want to extend the rate foreclosure, find out about the fees, as many lenders charge a fee for extending a rate foreclosure.
What future for mortgage rates?
To start the year, mortgage rates skyrocketed and crossed 3%, a level we haven’t seen since July 2020. After this dramatic hike, we saw a cut that brought rates below. 3%. With rates hovering around 3%, they’re still close to or below the levels many experts expected mortgage rates to be in 2021.
The way we have handled the coronavirus and our economic recovery will have a huge impact on rates. If consumer and government spending increases, it will likely lead to higher inflation. In this scenario, we will most likely see mortgage rates start to climb. But despite the potential for rising inflation, mortgage rates are expected to stay low this year. One reason for this: The Federal Reserve believes that low rates will help our economy regain momentum. It is therefore likely to take political decisions in favor of keeping rates low.
Mortgage rate forecasts 2021
In the short term, any change in mortgage rates should be minimal. Rates should therefore hover around 3% for the moment.
However, the economy still has a long way to go before it returns to pre-pandemic levels. If we’re surprised by bad news, it could put a damper on rates.
How to get the best mortgage rate
Comparing mortgage offers is a great way to get the lowest rate.
Your mortgage rate depends on a number of factors that lenders take into account when assessing the risk of loaning you money to buy a home. Your credit score and debt-to-income ratio (DTI) affect your mortgage rate. And even the value of the property relative to your mortgage balance matters. So increasing your down payment can lower your mortgage rate.
But the banks will look at your situation differently. So you can give the same documentation to three different lenders, and get offers with three different mortgage rates and fees that vary equally.