Some major mortgage rates went higher today. Average interest rates for 15-year and 30-year fixed mortgages increased further. At the same time, average rates for 5/1 adjustable-rate mortgages also increased. Mortgage interest rates are never set in stone, but interest rates are at record lows. For those looking to get a flat rate, now is the ideal time to buy a home. But, as always, be sure to consider your personal goals and circumstances first before buying a home, and look for a lender who can best meet your needs.
Check out the mortgage rates that meet your specific needs
30-year fixed rate mortgages
The 30-year average fixed mortgage interest rate is 3.03%, which represents a growth of 5 basis points compared to seven days 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. You won’t be able to pay off your home as quickly and you’ll pay more interest over time, but a 30-year fixed mortgage is a good option if you’re looking to minimize your monthly payment.
15-year fixed rate mortgages
The average rate for a 15-year fixed mortgage is 2.33%, an increase of 5 basis points compared to a week ago. 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. However, as long as you can afford the monthly payments, there are several benefits to a 15-year loan. 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 3.06%, an increase of 7 basis points compared to a week ago. During the first five years, you will typically get a lower interest rate with a 5/1 adjustable rate mortgage compared to a 30-year fixed mortgage. However, changes in the market can cause your interest rate to increase after that time, as detailed in the terms of your loan. Because of this, an ARM could be a good option if you plan to sell or refinance your home before the rate changes. But if that’s not the case, you may have to pay a significantly higher interest rate if market rates change.
Mortgage rate trends
We use the rates collected by Bankrate, which is owned by the same parent company as CNET, to track daily mortgage rate trends. This table summarizes the average rates offered by lenders across the country:
Average mortgage interest rates
|30 years fixed||3.03%||2.98%||+0.05|
|15 years fixed||2.33%||2.28%||+0.05|
|30-year jumbo mortgage rate||2.80%||2.80%||N / C|
|30-year mortgage refinance rate||3.04%||2.97%||+0.07|
Rates as of August 9, 2021.
How to find the best mortgage rates
When you’re ready to apply for a loan, you can contact a local mortgage broker or search online. When researching home mortgage rates, consider your goals and your current financial situation. A variety of factors, including your down payment, credit score, loan-to-value, and debt-to-income ratio, will affect the interest rate on your mortgage. Generally, you want a higher credit score, a higher down payment, a lower DTI, and a lower LTV to get a lower interest rate. In addition to the interest rate, other factors, including closing costs, fees, discount points, and taxes, can also play a role in the cost of your home. Be sure to talk to a variety of lenders, such as local and national banks, credit unions, and online lenders, and shop around to find the best mortgage for you.
How does the term of the loan affect my mortgage?
An important aspect to consider when choosing a mortgage is the loan term or payment schedule. The most commonly offered loan terms are 15 years and 30 years, although you can also find 10, 20 and 40 year mortgages. Another important distinction is between 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 set for a certain number of years (most often five, seven, or 10 years), then the rate is adjusted annually based on the current interest rate in the market.
An important factor to consider when deciding between a fixed-rate and an adjustable-rate mortgage is how long you plan to stay in your home. Fixed rate mortgages may be more suitable for people who plan to stay in a house for a time. While adjustable-rate mortgages may offer lower interest rates up front, fixed-rate mortgages are more stable in the long term. However, you can get a better deal with an adjustable rate mortgage if you only have plans to keep your home for a couple of years. The best term for a loan depends on your personal situation and your goals, so be sure to think about what is important to you when choosing a mortgage.