A couple of major mortgage rates rose today. Mortgage rates for 15 and 30 years have increased. We also saw an increase in the average rate of 5/1 adjustable rate mortgages. Although mortgage rates are constantly changing, they are now quite low. For those looking to get a flat rate, now is a good time to finance a home. But, as always, remember to first consider your personal goals and circumstances before buying a home and look for the lender that best suits your needs.
Take a look at mortgage rates for different types of loans
30 year fixed rate mortgage
The average 30-year fixed mortgage rate is 3.08%, up 7 basis points from a week ago. (The base point is equivalent to 0.01%.) The most common loan term is a fixed mortgage for 30 years. A 30 year fixed rate mortgage will often have a higher interest rate than a 15 year fixed rate mortgage, but will also have a lower monthly payment. Although you will pay more interest over time – you pay off the loan over a longer period of time – 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 2.38%, up 7 basis points from a week ago. Compared to a fixed mortgage for 30 years, a fixed mortgage for 15 years with the same loan amount and interest rate will have a higher monthly payment. But a 15 year loan will usually be a better deal if you can afford the monthly payments. You usually get a lower interest rate and you will pay less interest overall because you pay off your mortgage much faster.
5/1 Adjustable Rate Mortgage
The 5/1 adjustable rate mortgage has an average rate of 3.11%, up 9 basis points from seven days ago. With ARM, you usually get a lower interest rate than a 30-year fixed mortgage for the first five years. However, since the rate changes with the market rate, you may end up paying more after that time, as described in your loan terms. If you are planning to sell or refinance your home prior to the rate change, an adjustable rate mortgage may make sense to you. Otherwise, changes in the market mean that your interest rate could be much higher after adjusting it.
Dynamics of mortgage rates
We use data collected by Bankrate, owned by the same parent company as CNET, to track rate changes over time. This table shows the average rates offered by US lenders:
Current average mortgage interest rates
|Loan type||Interest rate||A week ago||Change|
|30 year flat rate||3.08%||3.01%||+0.07|
|15 year flat rate||2.38%||2.31%||+0.07|
|30 year giant mortgage rate||2.80%||2.80%||N / C|
|30 year mortgage refinancing rate||3.07%||2.99%||+0.08|
Updated August 31, 2021
How to find customized mortgage rates
You can get a customized mortgage rate by contacting your local mortgage broker or by using an online calculator. When choosing mortgage rates for your home, consider your goals and current financial situation. A number of factors, including your down payment, credit rating, loan-to-value ratio, and debt-to-income ratio, will affect your mortgage interest rate. A good credit rating, higher down payment, low DTI, low LTV, or any combination of these factors can help you get a lower interest rate.
In addition to the mortgage interest rate, additional costs can also affect the value of your home, including closing costs, fees, discount points, and taxes. Be sure to buy from multiple lenders including credit unions and online lenders as well as local and national banks to get the loan that works best for you.
How does the loan term affect my mortgage?
When choosing a mortgage, do not forget to consider the loan term or payment schedule. The most commonly offered mortgages are 15 and 30 years, although you can also find mortgages for 10, 20 and 40 years. Another important difference is between fixed and adjustable rate mortgages. For mortgage loans with a fixed rate, interest rates are set for the entire duration of the loan. For adjustable rate mortgages, interest rates are stable for a certain number of years (usually five, seven, or 10 years), then the rate fluctuates annually depending on the market interest rate.
When choosing a fixed and adjustable rate mortgage, you should consider how long you plan to live in your home. For people who are planning to stay in a new home for a long time, a fixed rate mortgage may be the best option. A fixed rate mortgage provides more stability over time compared to an adjustable rate mortgage, but an adjustable rate mortgage may offer lower interest rates up front. However, if you don’t plan on keeping your new home for more than three to ten years, an adjustable rate mortgage can give you a better deal. There is no best loan term as a basic rule; it all depends on your goals and your current financial situation. Be sure to do your research and think about what is most important to you when choosing a mortgage.