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Today, a handful of closely followed mortgage rates crept upward. Average 30-year fixed mortgage rates moved higher, while average 15-year fixed mortgage rates declined. The most common type of variable-rate mortgage is the 5/1 adjustable-rate mortgage, trended upward.
Mortgage interest rates are dynamic. However, for months they’ve hovered near historic lows. If you’re looking for a mortgage, now it can be a good idea to pick up a low fixed rate. Yet shopping around is still an important step in the process.
Find current mortgage rates for today.
30-Year Fixed-Rate Mortgages
The average 30-year fixed mortgage interest rate is 2.92%, which is a growth of 6 basis points from last week.
You can use NextAdvisor’s mortgage calculator to work out what your monthly payments would be and understand how adding extra payments will impact your loan. The mortgage calculator can also show you how much interest you’ll owe over the life of the loan
15-Year Fixed-Rate Mortgages
The median rate for a 15-year, fixed mortgage is 2.38%, which is a decrease of 2 basis points compared to a week ago.
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 easier. However, 15-year loans have some considerable benefits: You’ll pay thousands less in interest and pay off your loan much sooner.
5/1 Adjustable-Rate Mortgages
A 5/1 adjustable-rate mortgage has an average rate of 3.06%, an addition of 1 basis point compared to a week ago.
An ARM is ideal for borrowers that will sell or refinance before the rate changes. If that’s not the case, their interest rates could end up being a significant amount 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, your rate could climb higher and your payment might grow by hundreds of dollars a month.
Where Rates Are Trending
To see where mortgage rates are going we rely on information collected by Bankrate, which is owned by the same parent company as NextAdvisor. This table has current average rates based on information provide to Bankrate by lenders from across the country:
|Loan type||Interest rate||A week ago||Change|
|30-year fixed rate||2.92%||2.86%||+0.06|
|15-year fixed rate||2.38%||2.40%||-0.02|
|30-year jumbo mortgage rate||2.94%||2.89%||+0.05|
|30-year mortgage refinance rate||2.97%||2.92%||+0.05|
Updated on December 24, 2020.
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.
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 Does the Future Hold for Mortgage Rates?
In recent months, we’ve seen mortgage interest rates linger near all-time lows. But it’s difficult to determine where they will go from here. Where rates go is largely dependent on what happens with the economy. In addition, how well the coronavirus pandemic is contained will also play a role. A vaccine could help boost the economy and lead to an increase in mortgage rates. Conversely, mortgage rates are likely to stay low if the coronavirus continues to cause economic hardship.
Is Now a Good Time to Buy a Home?
Whether or not you 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 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.