Some closely watched mortgage rates dropped today. The 15-year fixed mortgage rates and the 30-year fixed rates decreased, at the same time, the average rates for the 5/1 adjustable rate mortgages also fell. Mortgage interest rates are never set in stone, but interest rates are the lowest in years. Because of this, now is an ideal time for prospective home buyers to set a fixed rate. But, as always, be sure to consider your personal goals and circumstances before buying a home, and shop around to find a lender who can best meet your needs.
Find the current mortgage rates for today
30-year fixed rate mortgages
The average 30-year fixed mortgage rate is 2.98%, which represents a decrease of 3 basis points compared to a week ago. (One basis point equals 0.01%). The most common loan term is a 30-year fixed mortgage. A 30-year fixed-rate mortgage will generally have a lower monthly payment than a 15-year, but generally a higher interest rate. Although you will pay more interest over time (you are paying off your loan over a longer period of time), if you are looking for a lower monthly payment, a 30-year fixed mortgage may be a good option.
15-year fixed rate mortgages
The average rate for a 15-year fixed mortgage is 2.28%, which represents a decrease of 3 basis points from the same period last week. Compared to a 30-year fixed mortgage, a 15-year fixed mortgage with the same loan value and interest rate will have a higher monthly payment. But a 15-year loan will generally be the best deal, as long as you can afford the monthly payments. These generally include being able to get a lower interest rate, pay off your mortgage earlier, and pay less total long-term interest.
Adjustable rate 5/1 mortgages
A 5/1 adjustable rate mortgage has an average rate of 2.99%, a drop of 4 basis points compared to a week ago. With an ARM mortgage, you will typically get a lower interest rate than a 30-year fixed mortgage for the first five years. But you may end up paying more after that time, depending on the terms of your loan and how the rate adjusts to the market rate. For borrowers who plan to sell or refinance their home before the rate changes, an ARM might be a good option. Otherwise, changes in the market could significantly increase your interest rate.
Mortgage rate trends
We use the data collected by Bankrate, which is owned by the same parent company as CNET, to track changes in these daily rates. This table summarizes the average rates offered by lenders nationwide:
|Loan term||Today’s rate||Last week||Change|
|30-year mortgage rate||2.98%||3.01%||-0.03|
|15-year fixed rate||2.28%||2.31%||-0.03|
|30-year jumbo mortgage rate||2.80%||2.78%||+0.02|
|30-year mortgage refinance rate||2.97%||2.99%||-0.02|
Exact rates as of August 2, 2021.
Finding Custom Mortgage Rates
You can get a personalized mortgage rate by connecting with your local mortgage broker or by using an online calculator. Be sure to consider your current financial situation and your goals when shopping for a mortgage. Things that affect the mortgage interest rate you can get include: your credit score, down payment, loan-to-value ratio, and your debt-to-income ratio. Having a good credit score, a higher down payment, a low DTI, a low LTV, or any combination of those factors can help you get a lower interest rate. The interest rate is not the only factor that affects the cost of your home; Be sure to also consider other factors such as fees, closing costs, taxes, and discount points. Be sure to shop around with various lenders, such as credit unions and online lenders, as well as local and national banks, to get the mortgage that best meets your needs.
What is the best loan term?
When choosing a mortgage, it is important to consider the term of the loan or the payment schedule. The most common mortgage terms are 15 years and 30 years, although there are also 10, 20 and 40 year mortgages. Mortgages are in turn divided into fixed rate and adjustable rate mortgages. Interest rates on a fixed rate mortgage are stable for the life of the loan. For adjustable rate mortgages, interest rates are stable for a certain number of years (most often five, seven, or 10 years), then the rate fluctuates annually based on the market interest rate.
An important factor to consider when choosing between a fixed-rate and an adjustable-rate mortgage is how long you plan to live in your home. If you plan to live long-term in a new home, fixed-rate mortgages may be the best option. Fixed-rate mortgages offer more stability over time compared to adjustable-rate mortgages, but adjustable-rate mortgages can offer lower interest rates up front. However, if you don’t plan to keep your new home for more than three to 10 years, an adjustable-rate mortgage might offer you a better deal. The best term for a loan depends on your personal situation and your goals, so be sure to consider what is important to you when choosing a mortgage.