A variety of major mortgage rates are down today. The averages of both 30-year fixed-rate mortgages and 15-year fixed-mortgages declined. The most common type of variable rate mortgage is the 5/1 adjustable rate mortgage (ARM), which also tends to tilt downward.
Take a look at today’s prices:
Where Are Mortgage Rates Heading in 2021?
We seem to have passed the days of mortgage rates constantly hitting record lows. A strong economy, rising inflation, and mounting concerns about the Omicron variable for COVID-19 are driving interest rates. If inflation remains high, this could lead to an increase in interest rates. The latest CPI reading was the highest in nearly 40 years. The emerging COVID variant is instilling economic fear. As a result of recent changes in Federal Reserve policy, rates are expected to rise throughout this year and into 2022, many experts predicted. However, prices can bounce from day to day and week to week.
What do current mortgage rate trends mean for homebuyers?
Over the past few weeks, rates have slowly risen higher. Despite the increasing increases, mortgage rates are still well below pre-pandemic levels and mortgage rates are considered historically favorable.
Persistently low rates help homebuyers increase their purchasing power, which can combat rising home values. The housing market is calming, but rising home values can overshadow potential savings from a lower mortgage rate. The higher interest rate will also contribute to the higher cost of home ownership along with higher home prices.
What do you know about loan fees?
When getting a mortgage, be sure to pay close attention to closing costs. There is usually 3 to 6% of the loan amount in closing costs, including construction fees, upfront interest, and property taxes.. One way to cut costs out of your pocket is if you accept a higher interest rate in exchange for lender credits. This strategy can save you money in the short term, so it’s worth considering if there is an opportunity to sell the house or refinance in five to eight years.
Today’s Mortgage Refinance Rates
There is good news if you are considering refinancing because the average rates for 15-year and 30-year fixed refinancing loans are lagging behind. Fixed-return 10-year mortgage refinancing loans have also shrunk.
The average refinancing rates for 30-year, 15-year and 10-year loans are:
Find current mortgage rates for today.
Fixed interest rates on a 30-year mortgage
For a 30-year fixed rate mortgage, the average rate you’ll pay is 3.19%, a drop of 5 basis points from last week.
Fixed mortgage rates for 15 years
The average 15-year fixed-rate mortgage is 2.50%, which is down 2 basis points from the same period last week.
The monthly payment for a 15-year fixed-rate mortgage will be much greater. So finding space in your budget to make a monthly payment for a 30-year loan will be simpler. However, 15-year loans have some big benefits: you’ll pay thousands less in interest and pay off your loan much earlier.
1/5 ARM Prices
The average 5/1 ARM arm rate is 2.74%, a decrease of one basis point from seven days ago.
An adjustable mortgage is ideal for families who will refinance or sell before the rate changes. If not, interest rates may end up significantly higher after the rate adjustment.
In the first five years, 1/5 ARM usually has a lower interest rate compared to a 30-year fixed mortgage. Keep in mind that your price may go up and your payment may increase by hundreds of dollars per month.
How are our mortgage rates calculated
To find out where mortgage rates are headed, we rely on information collected by Bankrate, which is owned by the same parent company as NextAdvisor. Our daily rate survey focuses on mortgages where the borrower has a high credit score (740+), a loan-to-value ratio (LTV) of 80% or better, and the home is a primary residence.
This table contains current average rates based on information provided to banks by lenders nationwide:
Updated December 27, 2021.
Mortgage Rate Frequently Asked Questions (FAQ):
How to get the lowest mortgage rate
Your credit score and loan-to-value (LTV) ratio are among the most important factors lenders use to calculate your mortgage rate.
To get the best interest rate, you’ll need a credit score somewhere between 700-800. A credit score above 800 is great, but it likely won’t have much of an impact on your price.
Banks offer the largest discounts on mortgage rates to borrowers who are considered less risky. A large down payment is a sign for lenders that you have more features in the game and are less likely to default on the loan. A down payment of 20% or more will save you money in two ways: with a better mortgage rate, and you’ll be able to avoid paying for private mortgage insurance (PMI).
Should I Fix My Mortgage Rate Now?
Mortgage rates move up and down on a daily basis, and it is impossible to tell when the market is. So fixing the interest rate now is a good idea because rates are generally exceptionally low.
The price lock will last for a set amount of time, usually 30-60 days. If you run into a snag during closing and it looks like your rate lock will expire, you should speak with the lender. It may provide a lock extension, however, you may have to pay a fee for this privilege.