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A handful of important mortgage rates all grew today. Both 30-year fixed and 15-year fixed mortgage rates climbed higher. The most common type of variable-rate mortgage is the 5/1 adjustable-rate mortgage (ARM) sunk lower.
The averages for 30-year fixed, 15-year fixed, and 5/1 ARMs are:
- 30-year fixed mortgage rates are averaging 3.28%
- 15-year fixed mortgage rates are averaging 2.53%
- Today’s average 5/1 adjustable-mortgage rate is 3.07%
Looking at Today’s Mortgage Refinance Rates
Interestingly, 30-year fixed refinance rates increased, when at the same time mean rates for a 15-year fixed refinance stayed flat. If you’ve been considering a 10-year refinance loan, just know average rates sank.
The average refinance rates are as follows:
- 30-year fixed refinance rates are averaging: 3.36%
- 15-year fixed refinance rate: 2.61%
- 10-year fixed-rate refinance: 2.48%
30-Year Fixed-Rate Mortgages
The average 30-year fixed mortgage interest rate is 3.28%, which is a growth of 3 basis points from last week.
You can use NextAdvisor’s home loan payment calculator to determine your monthly payments and see how much you’ll save if you make extra payments. The mortgage calculator can also show you the total interest you’ll pay over the life of the loan
15-Year Fixed-Rate Mortgages
The median rate for a 15-year fixed mortgage is 2.53%, which is an increase of 3 basis points from seven days ago.
A 15-year, fixed-rate mortgage’s monthly payment will be much bigger. So finding room in your budget for a 30-year loan’s monthly payment would be less difficult. However, 15-year loans have some considerable benefits: You’ll save thousands of dollars in interest and pay off your loan much sooner.
5/1 Adjustable-Rate Mortgages
A 5/1 ARM has an average rate of 3.07%, a slide of 1 basis point from seven days ago.
An ARM is ideal for borrowers who will sell or refinance before the rate changes. If that’s not the case, their interest rates could end up being significantly higher after a rate adjusts.
For the first five years, a 5/1 ARM will typically have a lower interest rate compared to a 30-year fixed mortgage. Just keep in mind that depending on how much your loan’s rate adjusts, your payment has the potential to increase by a large amount.
Recent Mortgage Rate Movement
To see where mortgage rates are headed, we rely on information collected by Bankrate, which is owned by the same parent company as NextAdvisor. Looking at the history of mortgage rates, we’re in the middle of a period of unprecedented low rates. The table below compares today’s average rates to what they were a week ago, and is based on information provided to Bankrate by lenders from across the nation:
|30-year jumbo mortgage rate||3.30%||3.26%||+0.04|
|30-year mortgage refinance rate||3.36%||3.32%||+0.04|
Rates as of April 6, 2021.
There isn’t a single factor that causes mortgage rates to move, but rather there are many. Chief among them are things including inflation and even the unemployment rate. When you see inflation increasing, that usually means mortgage rates are about to climb higher. On the other hand, lower inflation typically accompanies lower mortgage rates. With higher inflation, the dollar becomes less valuable. This scenario pushes buyers away from mortgage-backed securities, which leads to price decreases and the need for increasing yields. And higher yields require borrowers to pay higher interest rates.
The demand for housing can also impact mortgage rates. If more people are buying homes, there is a greater need for mortgages. This type of demand can drive interest rates up. And if there is less demand for mortgages, that can cause a decline in mortgage rates.
What’s in Store for Mortgage Rates in 2021
In February, we saw mortgage interest rates gain steam, moving above 3% for the first time in more than seven months. But, rates are still near all-time lows, which is great news for borrowers. And for 2021, some experts predict mortgage rates won’t go much higher. Although we could see rates start to gradually rise again as the year progresses.
What happens with rates will depend on the economy. And effectively dealing with the impacts of the coronavirus pandemic should boost our economic recovery. If consumer and government spending increases, that’s likely to drive inflation higher. And higher inflation usually leads to rising mortgage rates. But in spite of the potential for rising inflation, mortgage rates are likely to stay low this year. One reason for this: the Federal Reserve believes that low interest rates will help the economy rebound. So it’s likely to make policy decisions in favor of keeping rates low.
This Month’s Mortgage Predictions
Following the recent flurry of activity with mortgage rates, many experts are predicting mortgage rates will be calmer this month.
The Federal Reserve would still like to keep rates low to boost the economy. And some experts believe the fears of inflation that have been driving rates higher are a bit overblown. So even though mortgage interest rates are likely to continue to rise over the long term, a massive spike isn’t likely.
This Week’s Mortgage Predictions
The current rise in mortgage rates is what we’d expect to see with the economy looking like it’s starting to recover. So this week’s mortgage rates forecast is for more of the same, but with only a potential for a moderate uptick.
However, the economy still has a long way to go before it recovers to pre-pandemic levels. If we get surprised by any bad news, that could put a damper on rates.
What Impacts the Current Mortgage Rates?
Your mortgage rate depends on a number of things. First off, your personal finances have a big influence. A higher credit score or having the ability to make a larger down payment will help you get the best rate. However, not everything is in your control, many larger economic factors play a role as well:
- Condition of the economy
- Federal Reserve policies
- Consumer and government spending
- 10-year U.S. Treasury yields
- Rate of inflation
- Personal financial situation: Size of your down payment, credit history, and debt-to-income ratio
How to Qualify for the Lowest Mortgage Rate
Comparing home loan offers is a great way to get the lowest rate.
The mortgage rate you’ll qualify for depends on a variety of factors lenders consider when assessing how the likelihood that you’ll be able to afford a mortgage for the long term. Your credit score and debt-to-income ratio (DTI) impact your mortgage rate. And even the value of the property compared to your loan balance is important. So increasing your down payment can reduce your mortgage rate.
But lenders will evaluate your situation differently. So you can provide the same documentation to three different banks, and get offers with three different mortgage rates and fees that vary just as much.
What to Know About Recent Rate Hikes
Over the past few months, mortgage rates have been rising. Since we hit an all-time low average of 2.65% for 30-year fixed mortgages, the same rates have increased to 3.09%.
Rising rates can have a significant impact on your homebuying budget. The 0.44% increase we’ve experienced has increased the monthly payment on a 30-year $300,000 loan by $71 a month. But don’t expect current rates to cool off the red hot real estate market.
There is still a severe shortage of homes for sale. So as we enter peak buying season, expect to continue seeing bidding wars and rising prices. Those trends can make it can be a frustrating market for buyers.
How We Got These Rates
The rates we have included are averages provided by Bankrate.com Site Averages and are calculated after the close of the previous business day. The lenders that the “Bankrate.com Site Average” tables include are not the same can change daily.
National lenders provide this mortgage rate information to Bankrate.com. It is possible the mortgage rates we reference has changed since this was published.
Mortgage Interest Rates by Loan Type
Home Purchase Rates
- 30 Year Fixed Mortgage Rates
- 20 Year Fixed Mortgage Rates
- 15 Year Fixed Mortgage Rates
- 10 Year Fixed Mortgage Rates
- VA Mortgage Rates