Current Mortgage Interest Rates, February 17, 2021 | Rates Trending Upward - NextAdvisor

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A number of principal mortgage rates all marched higher today. Both 30-year fixed and 15-year fixed mortgage rates climbed up. The most common type of variable-rate mortgage is the 5/1 adjustable-rate mortgage (ARM) tapered off.

The averages for 30-year fixed, 15-year fixed, and 5/1 ARMs are:

Current Mortgage Refinance Rates

Refinancing became a bit more expensive today as 30-year fixed and 15-year fixed refinance mortgages saw their average rates go higher. Shorter term 10-year fixed-rate refinance mortgages also moved up.

The refinance averages for 30-year, 15-year, and 10-year loans are:

Find current mortgage rates for today.

30-Year Fixed-Rate Mortgages

The average 30-year fixed mortgage interest rate is 2.94%, which is a growth of 12 basis points from last week.

You can use NextAdvisor’s mortgage calculator to get an idea of what your monthly payments will be and play around with extra mortgage payments to wrap your head around how much you could save. The mortgage calculator can also show you how much interest you’ll pay over the life of the loan

15-Year Fixed-Rate Mortgages

The median rate for a 15-year fixed mortgage is 2.39%, which is an increase of 5 basis points compared to a week ago.

A 15-year, fixed-rate mortgage’s monthly payment is larger and will put more stress on your monthly budget than a 30-year mortgage would. However, 15-year loans have some considerable benefits: You’ll save thousands of dollars in interest and pay off your loan much faster.

5/1 Adjustable-Rate Mortgages

A 5/1 ARM has an average rate of 2.94%, a slide of 1 basis point compared to last week.

An ARM is ideal for borrowers who will sell or refinance before the rate changes. If that’s not the case, their interest rates could end up being noticeably higher after a rate adjusts.

For the first five years, a 5/1 ARM will typically have a lower interest rate compared to a 30-year fixed mortgage. Just keep in mind that depending on how much your loan’s rate adjusts, your payment has the potential to increase by a large amount.

How Mortgage Rates Have Changed

To see where mortgage rates are moving we rely on information collected by Bankrate, which is owned by the same parent company as NextAdvisor. Looking at historical mortgage rates, we’re seeing low rates like never before. This table has current average rates based on information provided to Bankrate by lenders nationwide:

Rates as of February 17, 2021.

There isn’t a single factor that causes mortgage rates to move, but rather there are many. Chief among them are things including inflation and even the unemployment rate. When you see inflation increasing that usually means mortgage rates are about to climb higher. On the other hand, lower inflation typically accompanies lower mortgage rates. With higher inflation, the dollar becomes less valuable. This scenario pushes buyers away from mortgage-backed securities, which leads to price decreases and the need for increasing yields. And higher yields require borrowers to pay higher interest rates.

The demand for housing can also impact mortgage rates. If more people are buying homes, there is a greater need for mortgages. This type of demand can drive interest rates up. And if there is less demand for mortgages, that can cause a decline in mortgage rates.

What’s in Store for Mortgage Rates in 2021

In recent months, mortgage rates fell to new all-time lows. Since there’s not much room for rates to decline further, many experts predict mortgage rates will remain flat or increase just slightly in 2021.

Where rates go is largely dependent on what happens with the economy. How effective we are in dealing with the impacts of the coronavirus pandemic is key to our economic recovery.
A stronger economy, along with increased spending from consumers and the government, is likely to drive inflation higher. In this scenario, we’ll most likely see mortgage rates begin to climb upward. Conversely, mortgage rates are likely to stay low if the coronavirus continues to cause economic hardship. The Federal Reserve could also choose to increase its purchasing of mortgage-backed securities, which could cause mortgage rates to drop.

Factors Influencing Today’s Mortgage Rates

There is a wide range of factors that affect mortgage rates. Some are broader economic factors, and others are related to your personal circumstances.

Overall health of the economy
Federal Reserve policy decisions
Consumer and government spending
Yields for 10-year Treasury bonds
Inflation
Personal situation: Loan term, type and location of the property, and credit score

How to Qualify for the Lowest Mortgage Rate

Shopping around for a home loan is a great way to qualify for the lowest mortgage rate.

The mortgage rate you get depends on a variety of factors lenders consider when assessing how the likelihood that you’ll be able to make your mortgage payments for the long term. Your credit score and debt-to-income ratio (DTI) factor into the decision. And your loan-to-value (LTV) ratio is also important, so having a larger down payment is better for your mortgage rate.

But, lenders will consider your circumstances differently. So you can provide the same documentation to three different banks, and receive mortgage offers with vastly different rates and fees.

Is Now a Good Time to Buy a Home?

There’s no “right time” to buy a house — the decision is a highly personal one. Keep in mind, when you purchase a home the monthly payment won’t be your only cost. You’ll also need enough money saved up for upfront closing costs and a down payment. And you’ll get a better deal if you have a higher credit score and lower debt-to-income ratio.

However, the pandemic has led to an even greater shortage of homes. That’s caused a bidding war and rising prices. Those trends mean it can be a frustrating market for buyers.

How We Got These Rates

The rates we have included are averages provided by Bankrate.com Site Averages and are calculated after the close of the previous business day. The lenders that the “Bankrate.com Site Average” tables include are not the same every day.

National lenders provide this mortgage rate information to Bankrate.com. It is possible the mortgage rates we reference has changed since this was published.