Current Mortgage Rates, August 14, 2020 | Rates trend higher - Bankrate.com

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Multiple closely watched mortgage rates cruised higher today. The average rates on 30-year fixed and 15-year fixed mortgages both cruised higher. The average rate on 5/1 adjustable-rate mortgages, meanwhile, also trended upward.

Mortgage rates are in a constant state of flux, but they remain much lower overall than they were before the Great Recession. If you’re in the market for a mortgage, it could be a great time to lock in a rate. Just make sure you shop around first.

Find the right mortgage rate for your specific criteria.

30-year fixed mortgages

The average rate for the benchmark 30-year fixed mortgage is 3.21 percent, an increase of 14 basis points over the last week. This time a month ago, the average rate on a 30-year fixed mortgage was lower, at 3.13 percent.

At the current average rate, you’ll pay principal and interest of $433.01 for every $100,000 you borrow. That’s an increase of $7.62 over what you would have paid last week.

You can use Bankrate’s mortgage loan calculator to estimate your monthly payments and see how much you’ll save by adding extra payments. It will also help you computehow much interest you’ll pay over the life of the loan.

15-year fixed mortgages

The average 15-year fixed-mortgage rate is 2.67 percent, up 3 basis points over the last seven days.

Monthly payments on a 15-year fixed mortgage at that rate will cost around $675 per $100,000 borrowed. Yes, that payment is much bigger than it would be on a 30-year mortgage, but it comes with some big advantages: You’ll save thousands of dollars over the life of the loan in total interest paid and build equity much faster.

5/1 ARMs

The average rate on a 5/1 ARM is 3.33 percent, rising 5 basis points over the last week.

These types of loans are best for people who expect to sell or refinance before the first or second adjustment. Rates could be substantially higher when the loan first adjusts, and thereafter.

Monthly payments on a 5/1 ARM at 3.33 percent would cost about $440 for each $100,000 borrowed over the initial five years, but could ratchet higher by hundreds of dollars afterward, depending on the loan’s terms.

Where rates are headed

To see where Bankrate’s panel of experts expect rates to go from here, check out our Mortgage rate predictions for this week.

Want to see where rates are currently? Lenders across the nation respond to Bankrate.com’s weekday mortgage rates survey to bring you the most current rates available. Here you can see the latest marketplace average rates for a wide variety of purchase loans:

Updated on August 14, 2020.

Rate lock advice and recommendations

A rate lock guarantees your interest rate for a specified period of time. It’s common for lenders to offer 30-day rate locks for a fee or to include the price of the rate lock into your loan. Some lenders will lock rates for longer periods, even exceeding 60 days, but those locks can be costly. In today’s volatile market, some lenders will lock an interest rate for only two weeks because they don’t want to take on unnecessary risk.

With a rate lock, if interest rates rise, you’re locked into the guaranteed rate. You may be able to find a lender that offers a floating rate lock. A floating rate lock lets you get a lower rate if interest rates decline before closing your loan. It could be worth the cost in a declining rate environment. Because there is no guarantee of where mortgage rates will head in the future, it may be smart to lock in a low rate instead of holding out on rates for potentially decline further.

It’s important to keep in mind: During the pandemic, all aspects of real estate and mortgage closings are taking much longer than usual. Expect the closing on a new mortgage to take at least 60 days, and expect refinancing to take at least a month..

Why do mortgage rates move up and down?

Mortgage rates are influenced by a range of economic factors, from inflation to unemployment numbers. Typically, higher inflation means higher interest rates and vice versa. As inflation rises, the dollar loses value, which in turn drives off investors for mortgage-backed securities, causing the prices to fall and yields to climb. When yields climb, rates get more expensive for borrowers.

A strong economy usually means more people buying homes, which drives demand for mortgages. This increased demand can push rates higher. The opposite is also true; less demand can trigger a drop in rates.

Current mortgage rate landscape

Mortgage rates have been volatile because of the COVID-19 pandemic. Generally, though, rates have been low. Mortgage rates are rising and falling from week to week, as lenders are inundated with forbearance and refinance requests. In general, however, rates are consistently below 4 percent and even dipping into the mid to low 3s. This is an especially good time for people with good to excellent credit to lock in a low rate for a purchase loan. However, lenders are also raising credit standards for borrowers and demanding higher down payments as they try to dampen their risks.

Methodology: The rates you see above are Bankrate.com Site Averages. These calculations are run after the close of the previous business day and include rates and/or yields we have collected that day for a specific banking product. Bankrate.com site averages tend to be volatile — they help consumers see the movement of rates day to day. The institutions included in the “Bankrate.com Site Average” tables will be different from one day to the next, depending on which institutions’ rates we gather on a particular day for presentation on the site.

To learn more about the different rate averages Bankrate publishes, see “Bankrate’s Rate Averages Methodology.”

Searching for the right mortgage lender? See Bankrate’s lender reviews here.

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