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A handful of closely followed mortgage rates all grew today. Both 30-year fixed and 15-year fixed mortgage rates climbed higher. At the same time, average rates for 5/1 adjustable-rate mortgages (ARM) saw a decline.
The averages for 30-year fixed, 15-year fixed, and 5/1 ARMs are:
- 30-year fixed mortgage rates are averaging 3.11%
- 15-year mortgage rate: 2.39%
- Today’s average 5/1 adjustable-mortgage rate is 3.26%
Current Mortgage Refinance Rates
Refinancing became a bit more expensive today as 30-year fixed and 15-year fixed refinance mortgages saw their average rates climb. If you’ve been considering a 10-year refinance loan, just know average rates were stable.
The average refinance rates are as follows:
- The average 30-year fixed-rate refinance currently sits at: 3.17%
- 15-year fixed-rate refinance: 2.46%
- 10-year fixed-rate refinance: 2.41%
30-Year Fixed-Rate Mortgages
The average 30-year fixed mortgage interest rate is 3.11%, which is a growth of 4 basis points from seven days ago.
You can use NextAdvisor’s mortgage loan calculator to work out what your monthly payments would be and see how much you’ll save if you make extra payments. The mortgage calculator can also show you how much 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 2.39%, which is an increase of 4 basis points from seven days ago.
A 15-year, fixed-rate mortgage’s monthly payment is larger and will take up a bigger chunk of your monthly budget than a 30-year mortgage would. But, 15-year loans have some considerable benefits: You’ll pay thousands less in interest and pay off your loan much earlier.
5/1 Adjustable-Rate Mortgages
A 5/1 ARM has an average rate of 3.26%, a decrease of 1 basis point from seven days ago.
An ARM is ideal for individuals who will sell or refinance before the rate changes. If that’s not the case, their interest rates could end up being remarkably 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 going we rely on information collected by Bankrate, which is owned by the same parent company as NextAdvisor. Looking at mortgage rate history, we’re in the middle of a period of unprecedented low rates. This table has current average rates based on information provided to Bankrate by lenders from across the nation:
|30-year jumbo mortgage rate||3.13%||3.07%||+0.06|
|30-year mortgage refinance rate||3.17%||3.13%||+0.04|
Rates as of May 3, 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.
A strong economy has historically increased demand for homes. When more homes are sold, the demand for mortgages also increases, which can cause rates to go up. But the flip side is also true: A drop in demand for mortgages could signal a coming downturn in mortgage rates.
What’s in Store for Mortgage Rates in 2021
In February, mortgage rates increased, moving above 3% for the first time in more than seven months. However, rates are still near all-time lows, which is great news for borrowers. And for 2021, some experts see mortgage rates continuing to stay low. 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. As the economy recovers, we should see inflation rise, which will push interest rates higher. But in spite of the potential for rising inflation, it’s unlikely that we’ll see skyrocketing mortgage rates in 2021. 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
A modest rise is what some experts are forecasting for mortgage rates this week. This would be a bit of a leveling off from previous weeks.
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 making a bigger 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:
- Overall strength of the economy
- Decisions made by the Federal Reserve
- Government and consumer spending
- Yields for 10-year Treasury bonds
- Rate of inflation
- Individual circumstances: Loan-to-value ratio, credit history, and type of mortgage
How to Get the Best Mortgage Rate
Comparing home loan offers is a great way to qualify for the lowest mortgage rate.
The mortgage rate you get depends on a variety of factors lenders consider when assessing how likely you are to repay your mortgage. Your credit score and debt-to-income ratio (DTI) impact your mortgage rate. And even the property’s value compared to the size of your mortgage is important. So putting more money into your down payment can reduce your mortgage interest rate.
But lenders will consider your circumstances differently. So you can give the same documentation to three different banks, and find that none of the mortgage rates and fees you are offered are the same.
What to Know About the Recent Rate Increases
Since we saw an all-time low 30-year fixed rate average of 2.65% this January, rates have jumped 0.44%. While this rate growth isn’t unexpected, many experts believed it would be later 2021 before we saw rates rise to this level.
The recent 0.44% increase in mortgage rates will affect your bottom line. The monthly payment on a $300,000 30-year mortgage is now $71 a month at the current interest rates. However, even though buyers will have to adjust their homebuying budgets, don’t expect it to turn into a buyer’s market anytime soon.
There is still a severe shortage of homes for sale. So as we enter peak buying season, expect to continue seeing homes sell quickly for above the asking price. 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 every day.
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