Some closely watched mortgage rates have dropped today. Both 15-year fixed and 30-year fixed mortgage rates fell. The average rate of the most common type of floating rate mortgage, 5/1 adjustable rate mortgages, has also tended to decline. Although mortgage rates are dynamic, they are at historic lows. Because of this, now is a great time for potential home buyers to get a flat rate. Before you buy a home, be sure to think about your personal needs and financial situation and talk to different lenders to find the best one for you.
View mortgage rates that suit your specific needs
30 year fixed rate mortgage
The average interest rate on a standard 30-year fixed mortgage is 3.02%, which is 3 basis points lower than seven days ago. (The base point is equivalent to 0.01%.) Fixed rate mortgage loans for 30 years are the most common loan term. A 30-year fixed-rate mortgage will usually have a lower monthly payment than a 15-year, but often a higher interest rate. Although you will pay more interest over time – you pay off the loan over a longer period – if you are looking for a lower monthly payment, a 30-year fixed mortgage may be a good option.
Mortgage with a fixed interest rate for 15 years
The average 15-year fixed-term mortgage rate is 2.31%, down 4 basis points from a week ago. You will definitely have a larger monthly payment with a 15-year fixed mortgage compared to a 30-year fixed mortgage, even if the interest rate and loan amount are the same. But a 15 year loan will usually be a better deal if you can afford the monthly payments. These usually include the ability to get a lower interest rate, pay off your mortgage faster, and pay less interest in the long run.
5/1 Adjustable Rate Mortgage
ARM 5/1 has an average of 3.03%, down 5 basis points from a week ago. You usually get a lower interest rate (compared to a fixed 30 year mortgage) with a 5/1 adjustable rate mortgage for the first five years of the mortgage. But since the rate changes with the market rate, you may end up paying more after that time, as described in the terms of your loan. For borrowers who plan to sell or refinance their home prior to the rate change, ARM may be a good option. Otherwise, changes in the market mean that your interest rate could be significantly higher after adjusting it.
Dynamics of mortgage rates
We use information collected by Bankrate, owned by the same parent company as CNET, to track daily trends in mortgage rates. This table shows the average rates offered by lenders by country:
Current average mortgage interest rates
|Loan type||Interest level||A week ago||Change|
|30 year flat rate||3.02%||3.05%||-0.03|
|15 year flat rate||2.31%||2.35%||-0.04|
|30 year giant mortgage rate||2.80%||2.80%||N / C|
|30 year mortgage refinancing rate||3.00%||3.04%||-0.04|
Updated on August 19, 2021.
How to find customized mortgage rates
When you’re ready to apply for a loan, you can contact your local mortgage broker or search online. Be sure to consider your current financial situation and your goals when looking for a mortgage. A number of factors, including your down payment, credit rating, loan-to-value ratio, and debt-to-income ratio, will influence your mortgage rate. A higher credit rating, higher down payment, lower DTI, lower LTV, or any combination of these factors can help you get a lower interest rate. In addition to the interest rate, other costs can also affect the value of your home, including closing costs, fees, discount points, and taxes. You should talk to several different lenders such as local and national banks, credit unions and online lenders, and a comparison store to find the best loan for you.
What is a good loan term?
When choosing a mortgage, do not forget to consider the loan term or payment schedule. The most common loan terms are 15 and 30 years, although mortgages also exist for 10, 20 and 40 years. Mortgages are classified into fixed rate and adjustable rate mortgages. For fixed rate mortgages, interest rates are fixed for the entire life of the loan. Unlike fixed rate mortgages, interest rates on adjustable rate mortgages are only stable for a certain period of time (most often five, seven, or 10 years). Thereafter, the rate is adjusted annually based on the current market interest rate. When choosing a mortgage with a fixed or an adjustable rate, you must take into account the length of your stay in the home. A fixed rate mortgage may be better if you plan on staying in the home for a while. A fixed rate mortgage offers greater stability over time compared to an adjustable rate mortgage, but an adjustable rate mortgage may offer lower interest rates up front. However, you can get a better deal with an adjustable rate mortgage if you only plan to keep your home for a couple of years. The optimal loan term depends entirely on your situation and goals, so be sure to consider what is important to you when choosing a mortgage.