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A variety of notable mortgage rates receded today. The averages for both 30-year fixed and 15-year fixed mortgages fell down. For variable rates, the 5/1 adjustable-rate mortgage (ARM) increased.
Mortgage rates currently are:
Current Mortgage Refinance Rates
Today’s slump in rates for 15-year fixed refinance loans was not matched by 30-year fixed refinance rates, which saw average rates hold steady. If you’ve been considering a 10-year refinance loan, average rates went down.
The refinance averages for 30-year, 15-year, and 10-year loans are:
Check out mortgage rates that meet your distinct needs.
30-Year Fixed-Rate Mortgages
For a 30-year, fixed-rate mortgage, the average rate you’ll pay is 2.84%, which is a decrease of 2 basis points from seven days ago.
You can use NextAdvisor’s mortgage payment calculator to determine your monthly payments and calculate what you’ll save with additional payments. 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 2.33%, which is a decrease of 3 basis points compared to a week ago.
A 15-year, fixed-rate mortgage’s monthly payment is, undeniably, a much bigger monthly payment than what you’d get with a 30-year mortgage offering the same interest rate. But, 15-year loans have some considerable benefits: You’ll save thousands of dollars in interest and pay off your loan much faster.
5/1 Adjustable-Rate Mortgages
A 5/1 adjustable-rate mortgage has an average rate of 3.00%, an addition of 2 basis points 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 noticeably 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 your payment could end up being hundreds of dollars higher after a rate adjustment, depending on the terms of your loan.
Where Rates Are Trending
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. The table below compares today’s average rates to what they were a week ago, and is based on information provided to Bankrate by lenders from across the country:
Rates accurate as of February 2, 2021.
There isn’t a single factor that causes mortgage rates to move, but rather there are many. 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.
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’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, the possibility for rates to rise is there.
The economy will play a big factor, which is tied to how well the coronavirus can be contained. 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.
What Impacts the Current Mortgage Rates?
Everything from the economy to your individual financial situation can influence mortgage rates. Not only that, but the type of mortgage and the property itself also factor into the equation.
Here are a few factors that influence rates:
- Overall strength of the economy
- Federal Reserve policies
- Consumer and government spending
- U.S. Treasury bond Yields
- Rate of inflation
- Personal finances: Credit score, down payment, and debt-to-income ratio
Is Now a Good Time to Buy a Home?
There’s no “right time” to buy a house — the decision is a highly personal one. Keep in mind, when you purchase a home the monthly payment won’t be your only cost. You’ll also need enough money saved up for upfront closing costs and a down payment. And you’ll get a better deal if you have a higher credit score and lower debt-to-income ratio.
However, the pandemic has led to an even greater shortage of homes. That’s caused a bidding war 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.