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A few benchmark mortgage rates fell today. The 30-year and 15-year fixed mortgage averages have declined. We have also seen a decrease 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:
A look at today’s mortgage refinance rates
There is good news if you are considering refinancing, as the average rates for 15-year fixed-rate refinancing loans and 30-year fixed-rate refinancing loans have declined. If you’re considering a 10-year refinance loan, just be aware that average rates have gone down as well.
The average refinancing rates are as follows:
Find the current mortgage rates for today.
30 year fixed rate mortgages
The average 30-year fixed mortgage interest rate is 3.07%, down 4 basis points from last week.
You can use NextAdvisor’s home loan calculator to figure out your monthly payments and play with additional mortgage payments to figure out how much you could save. The mortgage calculator can also tell you how much interest you will pay during the term of the loan.
15 year fixed rate mortgages
The median rate for a 15-year fixed mortgage is 2.35%, down 4 basis points from seven days ago.
The monthly payment on a 15-year fixed rate mortgage is higher and will put more strain on your monthly budget than a 30-year mortgage. But 15-year loans have huge advantages: you’ll pay thousands of interest less and pay off your loan much sooner.
5/1 variable rate mortgages
A 5/1 ARM has an average rate of 3.19%, a decrease of 7 basis points from last week.
An adjustable rate mortgage is ideal for people who will refinance or sell before rate changes. If not, their interest rates could end up being remarkably 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 across the country:
Prices exact as of May 7, 2021.
A number of factors can influence mortgage rates, including everything from inflation to unemployment. In general, inflation leads to higher interest rates and vice versa. The dollar loses value with increased inflation, causing mortgage-backed securities to become less attractive to investors, leading to lower prices and higher yields. And if yields rise, interest rates become more expensive for borrowers.
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.
What future for mortgage rates?
Recently, mortgage rates have climbed past 3% – a level we haven’t seen since last summer. Even with this dramatic increase, rates are close to or still lower than the levels many experts expected mortgage rates to be in 2021.
How we deal with the coronavirus and its impact on the economy will have a huge impact on rates. If spending increases, by government and consumers, it will likely lead to higher inflation. In this scenario, we will most likely see mortgage rates start to climb. However, the Federal Reserve wants 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 would still like 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.
Factors Influencing Current Mortgage Rates
There is a wide range of factors that affect mortgage rates. Some are broader economic factors and others are related to your individual situation.
- Overall health of the economy
- Federal Reserve policies
- Government and consumer spending
- U.S. Treasury Bill Yields
- Personal financial situation: size of your down payment, credit history and debt ratio
How to get the best mortgage rate
There are three main things to getting the best mortgage interest rate: Debt-to-Income Ratio (DTI), Loan-to-Value Ratio (LTV), and your credit score.
To get the lowest mortgage rate, you will need a credit score between 700 and 800. Having a credit score above 800 is good, but will likely have minimal impact on your rate.
If you are looking for a new home, you better have less debt. Your DTI will decrease when you have less monthly debt. And a lower DTI will help you get a better interest rate.
Banks grant the most substantial mortgage rate discounts to borrowers considered less risky. A sure-fire way to show that you are a less risky borrower is to bring a larger down payment to the closing table. A down payment of 20% or more will save you money in two ways: with a lower mortgage rate, and you can avoid paying for private mortgage insurance (PMI).
The impact of rising mortgage rates on buying a home
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 budgets, don’t expect it to turn into a buyer’s market anytime soon.
Demand for the few homes on the market should not be dampened by current mortgage rates, which are still historically low. So, for the spring shopping season, the real estate market is shaping up to be more similar – difficult for buyers.
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 âBankrate.com Site Averageâ tables are not the same from day to 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.