Current Mortgage Interest Rates, February 26, 2021 | Rates Increased - NextAdvisor

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A number of principal mortgage rates all increased today. Both 30-year fixed and 15-year fixed mortgage rates grew. For variable rates, the 5/1 adjustable-rate mortgage (ARM) also floated higher.

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 mean rates trend upward. Shorter term 10-year fixed-rate refinance mortgages also inched up.

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

Current Mortgage Rates.

30-Year Fixed-Rate Mortgages

For a 30-year fixed-rate mortgage, the average rate you’ll pay is 3.15%, which is an increase of 16 basis points from the previous week.

You can use NextAdvisor’s home loan payment calculator to determine your monthly payments 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 2.48%, which is an increase of 9 basis points from the same time last week.

A 15-year, fixed-rate mortgage’s monthly payment is larger than what you would pay with a 30-year mortgage. But, 15-year loans have some considerable benefits: You’ll save thousands of dollars in interest and pay off your loan much earlier.

5/1 Adjustable-Rate Mortgages

A 5/1 ARM has an average rate of 2.97%, an uptick of 3 basis points from the same time last week.

An adjustable-rate mortgage is ideal for individuals who will refinance or sell before the rate changes. If that’s not the case, their interest rates could end up being significantly 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 mortgage rate history, we’re seeing low rates like never before. This table has current average rates based on information provided to Bankrate by lenders from across the nation:

Rates as of February 26, 2021.

A number of factors can influence mortgage rates, including everything from inflation to unemployment. In general, inflation leads to higher interest rates and vice versa. The dollar loses value with increased inflation, and this causes mortgage-backed securities to become less enticing for investors, which leads to falling prices and higher yields. And if yields increase, interest rates become more expensive for borrowers.

A strong economy has historically increased demand for homes. When more homes are sold, the demand for mortgages also increases, which can cause rates to go up. But the flip side is also true: A drop in demand for mortgages could signal a coming downturn in mortgage rates.

What’s in Store for Mortgage Rates in 2021

In recent months, we’ve seen mortgage interest rates linger near all-time lows. And for 2021, some experts see mortgage rates continuing to stay low. Although, toward the end of the year we could see rates start to gradually rise.

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.
As the economy recovers, we should see inflation rise, which will put upward pressure on mortgage rates. 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 Behind Today’s Mortgage Rates

Everything from the direction of the economy to your individual financial situation can affect mortgage rates. Not only that, but the type of mortgage and the property itself also make a difference.

Here are a few factors that influence rates:

Overall health of the economy
Federal Reserve policies
Spending in the private and public sectors
Yields for 10-year Treasury bonds
Inflation rates
Personal financial situation: Size of your down payment, credit history, and debt-to-income ratio

How to Get the Lowest Mortgage Rate

Getting loan offers from a few lenders is one of the best ways to get the lowest mortgage interest rate.

The mortgage rate you get depends on a number of factors lenders consider when assessing how risky it is to give you a mortgage. 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 interest rate.

But, banks will evaluate your situation differently. So you can give the same documentation to three different lenders, and get offers with three different mortgage rates and fees that vary just as much.

Is Now a Good Time to Buy a Home?

Deciding when to buy a home is a highly personal choice. Your financial situation will play a big role in your decision. Before you buy a home, you’ll want to have a secure source of income, enough saved for closing costs, and a high credit score.

However, the pandemic has exacerbated a shortage of homes, leading to bidding wars 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 can change daily.

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