A number of closely followed mortgage rates moved down today. Fifteen-year fixed and 30-year fixed mortgage rates both trended lower. For variable rates, the 5/1 adjustable-rate mortgages also were down. Mortgage interest rates are never set in stone, but interest rates are historically low. Because of this, right now is an excellent time for prospective homebuyers to secure a fixed rate. Before you purchase a home, remember to take into account your personal needs and financial situation, and shop around for different lenders to find the right one for you.
Here are mortgage rates for different styles of loan
30-year fixed-rate mortgages
The average 30-year fixed mortgage interest rate is 3.05%, which is a decrease of 4 basis points as seven days ago. (A basis point is equivalent to 0.01%.) Thirty-year fixed mortgages are the most common loan term. A 30-year fixed rate mortgage will usually have a smaller monthly payment than a 15-year one -- but usually a higher interest rate. You won't be able to pay off your house as quickly and you'll pay more interest over time, but a 30-year fixed mortgage is a good option if you're looking to minimize your monthly payment.
15-year fixed-rate mortgages
The average rate for a 15-year, fixed mortgage is 2.35%, which is a decrease of 3 basis points from seven days ago. Compared to a 30-year fixed mortgage, a 15-year fixed mortgage with the same loan value and interest rate will have a higher monthly payment. However, as long as you can afford the monthly payments, there are several benefits to a 15-year loan. You'll usually get a lower interest rate, and you'll pay less interest in total because you're paying off your mortgage much quicker.
5/1 adjustable-rate mortgages
A 5/1 adjustable-rate mortgage has an average rate of 3.07%, a decrease of 4 basis points from the same time last week. With an adjustable-rate mortgage, you'll typically get a lower interest rate than a 30-year fixed mortgage for the first five years. However, since the rate adjusts with the market rate, you might end up paying more after that time, as described in the terms of your loan. If you plan to sell or refinance your house before the rate changes, an ARM could make sense for you. But if that's not the case, you could be on the hook for a much higher interest rate if the market rates change.
Mortgage rate trends
We use information collected by Bankrate, which is owned by the same parent company as CNET, to track changes in these daily rates. This table summarizes the average rates offered by lenders nationwide:
Average mortgage interest rates| Product | Rate | Last week | Change |
|---|---|---|---|
| 30-year fixed | 3.05% | 3.09% | -0.04 |
| 15-year fixed | 2.35% | 2.38% | -0.03 |
| 30-year jumbo mortgage rate | 3.15% | 3.26% | -0.11 |
| 30-year mortgage refinance rate | 3.09% | 3.14% | -0.05 |
Rates as of May 11, 2021.
How to shop for the best mortgage rate
When you are ready to apply for a loan, you can reach out to a local mortgage broker or search online. Make sure to think about your current finances and your goals when looking for a mortgage. Specific mortgage interest rates will vary based on factors including credit score, down payment, debt-to-income ratio and loan-to-value ratio. Generally, you want a higher credit score, a higher down payment, a lower DTI and a lower LTV to get a lower interest rate. The interest rate isn't the only factor that affects the cost of your home — be sure to also consider additional factors such as fees, closing costs, taxes and discount points. Make sure to comparison shop with multiple lenders -- including credit unions and online lenders in addition to local and national banks -- in order to get a loan that's best for you.
What's the best loan term?
One important thing to keep in mind when choosing a mortgage is the loan term, or payment schedule. The most common mortgage terms are 15 years and 30 years, although 10-, 20- and 40-year mortgages also exist. Another important distinction is between fixed-rate and adjustable-rate mortgages. The interest rates in a fixed-rate mortgage are set for the duration of the loan. Unlike a fixed-rate mortgage, the interest rates for an adjustable-rate mortgage are only stable for a certain amount of time (commonly five, seven or 10 years). After that, the rate fluctuates annually based on the current interest rate in the market.
When choosing between a fixed-rate and adjustable-rate mortgage, you should think about how long you plan to live in your home. Fixed-rate mortgages might be a better fit if you plan on staying in a home for a while. While adjustable-rate mortgages might offer lower interest rates upfront, fixed-rate mortgages are more stable over time. However you might get a better deal with an adjustable-rate mortgage if you only intend to keep your house for a couple years. There is no "best" loan term as a rule of thumb; it all depends on your goals and your current financial situation. It's important to do your research and think about what matters to you when choosing a mortgage.
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May 11, 2021 at 06:00PM
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Current mortgage rate for May 11, 2021: Rates retreat - CNET
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