Mortgage Rates Today Are Falling Again | March 26, 2021
Mortgage rates today are falling in all purchase loan categories. The rate on a 30-year fixed-rate mortgage fell but remained just above 3.5%. All refinance loan the categories have also seen their prices drop.
Average interest rates have fallen for four consecutive days. For borrowers who want to buy a house Where refinance your mortgage, today’s lower rates may provide an opportunity to lock in a low monthly payment.
- The average rate for a 30-year fixed-rate mortgage is 3.52% today.
- The average rate for a 15-year fixed-rate mortgage today is 2.598%.
- The average rate on a Jumbo ARM 5/1 is 2.953% today.
- The average rate on a 7/1 compliant ARM is 4.294% today.
- The average rate on a 10/1 compliant ARM is 4.338% today.
Today’s 30-year fixed mortgage rates
- The 30-year rate is 3.52%.
- It’s a day offold by 0.030 percentage point.
- It’s a month to augment by 0.029 percentage point.
The interest rate and monthly payment for a 30-year fixed rate mortgage will remain the same for the life of the loan. If you pay the required monthly payment, the debt will be paid off in 360 months, unless you refinance the loan or sell the house.
Compared to a shorter-term product like a 15-year mortgage, the interest rate on a 30-year mortgage will be higher but the monthly payment will be lower because the balance is spread over twice a month. On the other hand, as you pay a higher interest rate for a longer period of time, you will pay more total interest.
Lower monthly payments make 30-year loans popular among borrowers, although they get more expensive over time.
Today’s 15-year fixed mortgage rates
- The 15-year rate is 2.598%.
- It’s a day offold by 0.037 percentage point.
- It’s a month infold by 0.010 percentage point.
The interest rate and monthly payment for a 15-year fixed rate mortgage will also remain unchanged for the duration of the loan. By paying the required monthly amount, the loan will be paid off in 180 months, unless you refinance or sell the house.
A 15 year loan will have a lower interest rate than a 30 year mortgage. However, the monthly payments will be higher because the balance is spread over half the time. On the plus side, because you are paying a lower rate over a shorter period of time, you will actually pay less total interest.
The ability to pay off the loan faster and save on interest can make 15-year loans attractive to borrowers who can afford higher monthly payments.
Today’s 5/1 Jumbo Variable Rate Mortgage Rates
- The ARM 5/1 rate is 2.953%.
- It’s a day offold by 0.023 percentage point.
- It’s a month to augment by 0.009 percentage point.
A variable rate loan will actually have a fixed interest rate for a number of years, after which the rate will change. Consequently, the monthly payment will not change during the period of the fixed rate but may increase or decrease thereafter depending on the evolution of the rate.
For example, a 5/1 adjustable rate loan will have a fixed rate for the first five years of the loan, then reset each year thereafter. Other common variable rate terms are a 7/1 and a 10/1. ARMs will be amortized in 30 years.
A 5/1 adjustable rate loan will have one of the lowest initial rates in the market, making it an attractive option for borrowers who do not plan to stay in the home beyond the fixed rate period. . However, borrowers who plan to stay in the home should be aware that the rate can increase dramatically at some point after five years.
VA, FHA and Jumbo Loan Rates Today
The average rates for FHA, VA and jumbo loans are:
- The rate on a 30-year FHA mortgage is 3.302%.
- The rate for a 30-year VA mortgage is 3.381%.
- The rate for a 30-year jumbo mortgage is 3.653%.
Mortgage Refinance Rate Today
The average rates for 30-year, 15-year and 5/1 jumbo ARM loans are:
- The refinance rate on a 30 year fixed rate refinance is 3.766%.
- The refinance rate on a 15 year fixed rate refinance is 2.906%.
- The refinancing rate on a Jumbo ARM 5/1 is 3.422%.
- The refinancing rate on a 7/1 compliant ARM is 4.654%.
- The refinancing rate on a 10/1 compliant ARM is 4.821%.
Where Are Mortgage Rates Going This Year?
Mortgage rates fell through 2020. Millions of homeowners responded to low mortgage rates by refinancing existing loans and taking out new ones. Many people have bought homes that they might not have been able to afford if the rates were higher.
In January 2021, rates briefly fell to all-time low levels, but tended to rise throughout the month and into February.
Looking ahead, experts believe that interest rates will rise further in 2021, but modestly. Factors that could influence the rates include how quickly COVID-19 vaccines are distributed and when lawmakers can agree on another cost-effective relief package. More vaccinations and government stimulus could lead to improved economic conditions, which would increase rates.
Although mortgage rates are likely to rise this year, experts say the increase will not happen overnight and it will not be a dramatic jump. Rates are expected to stay near their historically low levels throughout the first half of the year, rising slightly later in the year. Even with rates rising, this will still be a good time to finance a new home or refinance.
Factors that influence mortgage rates include:
- The Federal Reserve. The Fed took swift action when the pandemic hit the United States in March 2020. The Fed announced plans to move money through the economy by lowering the Federal Fund’s short-term interest rate between 0% and 0.25%, which is as low as they go. The central bank has also committed to buying mortgage-backed securities and treasury bills, thereby supporting the housing finance market. The Fed has reaffirmed its commitment to these policies for the foreseeable future on several occasions, most recently at a policy meeting in late January.
- The 10-year Treasury note. Mortgage rates move at the same pace as the yields on 10-year government treasury bills. Yields fell below 1% for the first time in March and have slowly risen since then. Currently, yields have hovered above 1% year-to-date, pushing interest rates up slightly. On average, there is typically a 1.8 point “spread” between Treasury yields and benchmark mortgage rates.
- The economy in the broad sense. Unemployment rates and changes in gross domestic product are important indicators of the overall health of the economy. When employment and GDP growth are low, it means the economy is weak, which can lower interest rates. Thanks to the pandemic, unemployment levels hit historic highs early last year and have yet to recover. GDP has also been affected, and although it has rebounded somewhat, there is still a lot of room for improvement.
Tips for getting the lowest mortgage rate possible
There is no universal mortgage rate that all borrowers receive. Qualifying for the lowest mortgage rates takes a bit of work and will depend on both personal financial factors and market conditions.
Check your credit score and your credit report. Mistakes or other red flags that can lower your credit score. The borrowers with the highest credit scores will get the best rates, so it’s essential to check your credit report before you begin the home search process. Taking action to correct mistakes will help increase your score. If you have high credit card balances, paying them off can also give you a quick boost.
Save money for a large down payment. This will lower your loan-to-value ratio, which means how much of the home’s price the lender has to finance. A lower LTV usually results in a lower mortgage rate. Lenders also like to see money that has been saved in an account for at least 60 days. It tells the lender that you have the money to finance the purchase of the house.
Shop around for the best rate. Don’t settle for the first interest rate a lender offers you. Check with at least three different lenders to see who is offering the lowest interest rate. Also consider the different types of lenders, such as credit unions and online lenders, in addition to traditional banks.
Also take the time to learn about the different types of loans. While the 30-year fixed-rate mortgage is the most common type of mortgage, consider a shorter-term loan such as a 15-year loan or an adjustable rate mortgage. These types of loans often have a lower rate than a conventional 30-year mortgage. Compare everyone’s costs to see which one best suits your needs and your financial situation. Government loans – such as those backed by the Federal Housing Authority, the Department of Veterans Affairs, and the Department of Agriculture – may be more affordable options for those who qualify.
Finally, lock in your rate. Locking in your rate once you’ve found the right rate, the right loan product, and the lender will help ensure that your mortgage rate doesn’t increase until the loan closes.
Our mortgage rate methodology
Money’s Daily Mortgage Rates show the average rate offered by over 8,000 lenders in the United States on the previous business day. Today we are posting the rates for Thursday, March 24. Our rates reflect what a typical borrower with a credit score of 700 can expect to pay on a home loan right now. These rates were offered to people contributing 20% and include discount points.