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What we are seeing today is that a handful of closely watched mortgage rates have fallen. Fixed 30-year and 15-year fixed mortgage rates have declined. We have also seen an increase in the average rate for variable rate mortgages (ARMs) 5/1.
The averages for 30 fixed years, 15 fixed years and 5/1 ARM are:
Current mortgage refinancing rates
There is good news if you are considering refinancing, as the average rates for 15-year and 30-year fixed-rate refinancing loans have declined. Shorter-term 10-year fixed rate refinance mortgages have also been discontinued.
The current refinancing rates are:
Current mortgage rates.
30 year fixed rate mortgages
The average 30-year fixed mortgage rate is 3.12%, down 6 basis points from last week.
You can use NextAdvisor’s mortgage calculator to calculate your monthly payments and calculate what you’ll save with additional payments. The mortgage calculator can also show you the total interest you will pay over the life of the loan.
15 year fixed rate mortgages
The median rate for a 15-year fixed mortgage is 2.43%, a decrease of 1 basis point from the same period last week.
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 sooner.
5/1 variable rate mortgages
A 5/1 ARM has an average rate of 3.21%, up 13 basis points from the same period last week.
An ARM is ideal for borrowers who will refinance or sell before rate changes. If not, their interest rates could end up being much 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 hundreds of dollars higher after a rate adjustment, depending on the terms of your loan.
Recent movement in mortgage rates
To see where mortgage rates are going, we rely on information collected by Bankrate, which is owned by the same parent company as NextAdvisor. If we look at historic mortgage rates, we are in the middle of a period of unprecedented low rates. The table below compares average rates today to what they were a week ago, and is based on information provided to Bankrate by lenders nationwide:
Updated April 20, 2021.
There isn’t one factor that drives mortgage rates, but there are many. The main ones are things like inflation and even the unemployment rate. When you see inflation going up, it usually means mortgage rates are about to go up. In contrast, lower inflation usually accompanies lower mortgage rates. With higher inflation, the dollar loses its value. This scenario pushes buyers away from mortgage-backed securities, leading to lower prices and the need to increase yields. And higher yields force borrowers to pay higher interest rates.
Demand for housing can also have an impact on mortgage rates. If more people buy a house, there is a greater need for mortgages. This type of demand can drive up interest rates. And if there is less demand for mortgages, it can lead to lower mortgage rates.
Where are mortgage rates going in 2021?
In February, mortgage rates rose above 3% for the first time in more than seven months. However, rates are still historically favorable for borrowers. And for 2021, some experts predict that mortgage rates will not increase much. Although the possibility of future price increases exists.
The direction of rates will depend on the economy. And effectively dealing with the impacts of the coronavirus pandemic is the key to our economic recovery. As the economy recovers, we should see inflation rise, pushing interest rates higher. However, the Federal Reserve has expressed its willingness to help the recovery by keeping rates low beyond 2021. So you can expect historically low rates for the foreseeable future.
Mortgage Forecasts This Month
Following the recent wave of activity with mortgage rates, many experts predict that mortgage rates will be calmer this month.
The Federal Reserve still wants to keep rates low to stimulate the economy. And some experts say the inflation fears that have driven rates up are a bit over the top. So while mortgage interest rates are likely to continue to rise over the long term, a massive spike is not likely.
This Week’s Mortgage Predictions
The current rise in mortgage rates is what we would expect to see with the economy appearing to be starting to recover. So this week’s mortgage rate forecast is more or less the same, but with only moderate upside potential.
While there is nothing this week that should cause rates to spike or drop dramatically, the unexpected can happen. And currently, the economy still has a long way to go to return to its pre-pandemic level.
What impact on current mortgage rates?
Your mortgage rate depends on several factors. First of all, your personal finances have a big influence. A higher credit score or the ability to make a larger down payment will help you get a lower rate. However, not everything is under your control, many more important economic factors also play a role:
- Overall health of the economy
- Federal Reserve policies
- Spending in the private and public sectors
- 10-Year Treasury Bill Yields
- Inflation rate
- Personal financial situation: size of your down payment, credit history and debt ratio
How to qualify for the lowest mortgage rate
When working to get the absolute best interest rate, you need to focus on three things: credit score, loan-to-value ratio (LTV), and debt-to-income ratio (DTI).
To get the best interest rate, it is best to have a credit score between 700 and 800. Having a credit score above 800 is good, but probably won’t have a major impact on your rate.
The amount of your debt will have an impact not only on the price of the house you can afford, but also on your interest rate. The maximum debt ratio (DTI) for most mortgages is 43%. So if you earn $ 3,000 per month you will be allowed to have up to $ 1,290 in monthly bills. To get the best mortgage rate, aim for a DTI ratio of 28% or less.
Lenders give the most substantial mortgage rate reductions to homebuyers deemed to be less risky. A surefire way to signal that you are a less risky borrower is to have a larger down payment. A down payment of 20% or more will save you money in two ways: with a cheaper mortgage rate, and you can avoid paying for private mortgage insurance (PMI).
What you need to know about recent rate increases
In recent months, mortgage rates have skyrocketed. Since we hit an unprecedented 2.65% average for 30-year fixed mortgages, mortgage interest rates have climbed to 3.09%.
The recent 0.44% increase in mortgage rates will affect your bottom line. The monthly mortgage payment of $ 300,000 over 30 years is now $ 71 per month at current interest rates. However, while buyers will have to adjust their home buying budget, don’t expect it to turn into a buyer’s market anytime soon.
Demand for the few homes on the market is unlikely to be offset by current mortgage rates, which are still historically favorable. So, for the spring shopping season, the real estate market is shaping up to be more similar – a sellers’ market.
How we got these rates
The rates we have included are averages provided by the Bankrate.com website averages and are calculated after the close of the previous business day. The lenders included in the “Bankrate.com Site Average” tables are not the same every day.
National lenders provide this mortgage rate information to Bankrate.com. It is possible that the mortgage rates we refer to have changed since its publication.