A few notable mortgage rates shrank today. The averages for both 30-year fixed and 15-year fixed mortgages took a tumble. At the same time, average rates for 5/1 adjustable-rate mortgages (ARM) were boosted.
Mortgage rates currently are:
What this means for borrowers:
Historically low interest rates continue to be available to highly qualified borrowers. But home buying is about much more than your mortgage rate. Exceptionally low inventory has led to a rise in bidding wars and pushed home prices higher at a rapid pace. With so few homes for sale, buyers can expect to face a competitive market.
Current Mortgage Refinance Rates
Today’s drop in rates for 15-year fixed refinance loans was not matched by 30-year fixed refinance rates, which saw national rate averages remained unaltered. Shorter term, 10-year fixed-rate refinance mortgages moved up.
Today’s refinance rates are:
Find current mortgage rates for today.
30-Year Fixed Mortgage Interest Rates
The 30-year fixed-mortgage rate average is 3.03%, which is a decrease of 3 basis points from last week.
You can use NextAdvisor’s home loan calculator to determine your monthly payments and calculate what you’ll save with additional payments. The mortgage calculator can also show you all of the interest you’ll pay over the life of the loan.
15-Year Fixed Mortgage Rates
The median rate for a 15-year fixed mortgage is 2.38%, which is a decrease of 4 basis points from the same time last week.
A 15-year, fixed-rate mortgage’s monthly payment will be much bigger. So finding room in your budget for a 30-year loan’s monthly payment would be more simple. 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 ARM Interest Rates
A 5/1 ARM has an average rate of 2.81%, which is an uptick of 1 basis point compared to last week.
An adjustable-rate mortgage 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 markedly 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. Keep in mind that depending on how much your loan’s rate adjusts, your payment has the potential to increase by a large amount.
Mortgage Rate Movement
To see where mortgage rates are headed,, we rely on information collected by Bankrate, which is owned by the same parent company as NextAdvisor. Looking at the history of mortgage rates, 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 country:
Rates as of July 19, 2021.
There are many factors that cause mortgage rates to move. 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.
While there is no single entity that sets mortgage rates, the Federal Reserve Bank’s policies can impact what happens with interest rates. And it has expressed its desire to keep rates low for the foreseeable future to aid in the economic recovery. To achieve this, it has kept the Federal Funds rate (the overnight interest rate for inter-bank lending ) to roughly zero, and it has committed to purchasing a large number of mortgage-backed securities each month. Both of these actions will help to keep rates low.
Is Now a Good Time to Lock in My Mortgage Rate?
Mortgage rates move up and down on a daily basis, and it’s impossible to time the market. So locking in your interest rate right now is a good idea because overall, rates are exceptionally low.
When you lock in your rate, ask your lender how long the lock will last. A rate lock can be good for anywhere from 30 to 60 days, which typically will give you enough time to close before the lock expires. If something happens where you need to extend your rate lock, ask about fees as many lenders charge a fee for extending a rate lock.
What’s in Store for Mortgage Rates in 2021
To start the year, mortgage rates jumped and crossed 3% – a level we haven’t seen since July 2020. After this dramatic increase, we saw a fall that brought rates back under 3%. Since then, rates have hovered around 3%, still near or below the levels many experts predicted they would hit in 2021.
What happens with rates will depend on the economy. A growing economy usually goes hand in hand with rising mortgage rates. And although inflation looks to be rising, the Federal Reserve believes this is only temporary. So inflation hasn’t pushed rates higher. But in spite of the potential for rising inflation, it’s unlikely that we’ll see skyrocketing mortgage rates in 2021. One reason for this: the Federal Reserve believes low rates will help our economy regain its momentum. So it’s unlikely to make moves that could increase rates.
2021 Mortgage Rate Forecast
In the near term, any changes in mortgage rates should be minimal. So rates should hover near 3% for the time being.
However, the economy still has a long way to go before it recovers to pre-pandemic levels. If we get surprised by any bad news, that could put a damper on rates.
How to Qualify for the Lowest Mortgage Rate
Your credit score, and loan-to-value ratio (LTV), and are the most important factors in determining your interest rate.
To get the best rate, you’ll need a credit score somewhere between 700-800. Having a credit score above 800 is nice, but will likely have no major impact on your rate.
Lenders give the largest mortgage rate discounts to home buyers that are seen as less risky. One surefire way to show you’re a less risky borrower is to bring a bigger down payment to the closing table. A down payment of 20% or more will save you money in two ways: with a more favorable mortgage rate, and you’ll be able to avoid paying for private mortgage insurance (PMI).
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July 19, 2021 at 06:30PM
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Current Mortgage Rates, July 19, 2021 | Rates Receded - NextAdvisor
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