Today’s mortgage and refinancing rates
Average mortgage rates remained virtually unchanged on Friday. And that was the end of the week in which they moved up. But such a small change would not change your life.
Yes, mortgage rates remain unpredictable next week… But, if I had to make a prediction (and I suppose I should), I would expect further modest growth, simply based on recent momentum.
Current mortgage and refinancing rates
|Program||Mortgage rate||Annual interest rate *||Change|
|Regular 30 year fixed||3.064%||3.069%||-0.04%|
|Regular 15 year fixed||2.25%||2,367%||Without changes|
|Regular 20 year fixed||2.781%||2.873%||-0.03%|
|Regular 10 year fixed||1.924%||2.115%||+ 0.06%|
|30 year fixed FHA||2.813%||3.47%||Without changes|
|15 year fixed FHA||2.496%||3.097%||Without changes|
|5 years ARM FHA||2.5%||3.201%||Without changes|
|30-year fixed VA||2,383%||2,555%||+ 0.01%|
|15 year fixed VA||2.25%||2,571%||Without changes|
|5 years of ARM VA||2.5%||2,379%||Without changes|
|Rates are provided by our partner network and may not reflect the market. Your rating may be different. Click here for a personalized quote… See our rate suggestions here…|
COVID-19 Mortgage News: Mortgage lenders are changing rates and rules due to COVID-19. For the latest information on how the coronavirus can affect your home loan, Click here…
Should you fix your mortgage rate today?
Average mortgage rates are up again this week. And they remain at their highest level in more than a month.
I expect to see more upturns in the coming weeks and months as the economic recovery picks up steam. So I would block my bet now if I were you. But there is no certainty, and you may prefer to follow your instincts.
However, my personal recommendations remain valid:
- LOCK if closing 7 days
- LOCK if closing fifteen days
- LOCK if closing thirty days
- LOCK if closing 45 days
- LOCK if closing 60 days
However, with so much uncertainty at the moment, your instincts can easily turn out to be as good as mine – or even better. So be guided by your instinct and personal risk tolerance.
What drives current mortgage rates
Do you remember the so-called 2013 Cone Tantrum? If you weren’t involved in it, there is no reason why you should do it.
But this caused a sharp jump in mortgage rates. Indeed, interest rates on 30-year fixed-rate mortgages jumped to 4.07% in June of that year. And that’s up from 3.54% in May, according to data Freddie Mac Archive… And they continued to rise, ending 2013 at 4.46% and staying above 4% until December 2014.
I’m not going to give history lessons. But you need to be aware of the events of 2013, because many expect a repeat this or next year.
What is hysteria and why is it important?
A decline in price in this context occurs when the Federal Reserve is slowly cutting back on asset purchases. And hysteria occurs when the markets don’t like what’s going on and throw their toys out of the stroller.
So, in 2013, after five years, during which he bought almost $ 2 trillion On the asset side, mortgage rates rose sharply when the Fed announced a phasing out of purchases. Why? Well, those assets included mountains of Mortgage Backed Securities (MBS). Thus, the Fed artificially lowered mortgage rates.
Right now, the Fed is buying assets again – at the rate of $ 120 billion a month. And this is probably the biggest buyer of these MBSs and a big contributor to today’s low mortgage rates.
But on Wednesday the minutes of his last political meeting showed that some of his leaders wanted to raise the topic of a second narrowing in the near future. So there is every reason to fear a second hysteria – and the sharp increase in mortgage rates that it could bring.
More than a tantrum of fear
Unfortunately, we are likely to see higher mortgage rates this year, even if the hysteria somehow ends. Check out last week’s release to see how fear of future inflation and the possibility of an economic boom could push them up anyway.
Unfortunately, no one has a schedule for these events. We see them coming, but we don’t know when they might appear. And it is this – and the abundance of caution – that has led me to stick to my recommendations for locking or floating locking lately.
Of course, there is always the possibility that some extremely dangerous event will stifle the recovery and force the Fed to keep buying assets. And such a disaster is likely to cause mortgage rates to fall again, possibly to new record lows. But there is more to fear than betting concerns.
Economic reports next week
You will most likely be able to relax next week until Friday. Most of the economic reports so far are relatively secondary. However, any report can move the market off the ground if it contains shocking and unexpected data.
But pay attention on Friday. Because these are the April core inflation figures. And the markets are now obsessed with it. On the same day, data on personal income and consumer spending will be published.
But the others listed below are unlikely to cause your heart rate to rise. Moreover, regular readers know that the markets have ignored most economic reports in recent weeks. Thus, the following effects may differ from the usual ones:
- Tuesday – March CoreLogic Case-Shiller National Home Price Index. Plus May Consumer Confidence and April New Home Sales
- Thursday – the April index of leading economic indicators. Also durable goods orders for April. Plus new weekly unemployment insurance claims
- Friday – April – data on core inflation, personal income and consumer spending. Plus May Consumer Sentiment Index
So stay tuned for Friday.
Forecast of interest rates on mortgages for the next week
Mor loan rates could rise again this week, although they remain largely unpredictable.… And for that prediction I have little to do other than the momentum I have.
Mortgage and refinancing rates usually change at the same time. But keep in mind that refinancing rates are currently slightly higher than mortgage rates. This gap is likely to remain fairly constant as they change.
Meanwhile, a recent legislative change has made the bulk of investment property and vacation home mortgages more expensive.
How the mortgage interest rate is determined
Mortgage and refinancing rates are usually determined by prices in the secondary market (similar to the stock or bond market) where mortgage-backed securities are traded.
And this is highly dependent on the economy. Thus, mortgage rates are usually high when things are going well and low when the economy is in trouble.
But you play a big role in determining your own mortgage interest rate in five ways. You can significantly influence this:
- Find the best mortgage rate – these vary greatly from lender to lender.
- Improving your credit score – even a small jump can make a big difference in your rates and payments
- You will save the largest down payment – lenders like you will have real skin in this game
- Keep your other loan modest – the smaller your other monthly commitments, the more mortgage you can afford.
- Choose your mortgage carefully – would you rather take a regular, FHA, VA, USDA, large or other loan?
Taking the time to get these ducks in a row can result in you winning lower rates.
Remember, this is not just a mortgage rate
Be sure to calculate all the upcoming homeownership costs when deciding how much mortgage you can afford. So focus on your PETE. It’s yours Principal (pays the loan amount), Iinterest (borrowing price), (property) Taxes, and (homeowners) Iinsurance. Our mortgage calculator can help with this.
Depending on your type of mortgage and the amount of your down payment, you may also have to pay for mortgage insurance. And that can easily translate into three-digit numbers every month.
But there are other potential costs too. So you have to pay homeowners association fees if you decide to live somewhere with an HOA. And wherever you live, you should expect repair and maintenance costs. When something goes wrong, there is no owner to call!
Finally, it will be difficult for you to forget about the closing costs. You can see them in the Annual Percentage Rate (APR) that you specify. Because it effectively distributes them over the term of your loan, making it higher than your direct mortgage rate.
But you may be able to get help with these final costs. as well as your down payment, especially if you are buying for the first time. To read:
Mortgage rate methodology
Mortgage reports get rates based on selected criteria from several credit partners every day. We get the average rate and annual interest rate for each loan type displayed in our chart. Since we average a set of rates, this gives you a better idea of what you can find on the market. In addition, we average rates for the same loan types. For example, FHA is fixed with fixed FHA. The end result is a good snapshot of daily rates and how they change over time.