Mortgage Rates Today, October 6, 2020 | Benchmark rate retreats

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Mortgage rates moved in different directions today, but one key rate was down. The average for a 30-year fixed-rate mortgage slid down, but the average rate on a 15-year fixed climbed. The average rate on 5/1 adjustable-rate mortgages, meanwhile, trended upward.

Rates for mortgages change daily, but they continue to represent a bargain compared to rates before the Great Recession. If you’re in the market for a mortgage, it could make sense to go ahead and lock if you see a rate you like. Just make sure you shop around first.

Compare mortgage rates in your area now.

30-year fixed mortgages

The average rate for a 30-year fixed mortgage is 3.06 percent, a decrease of 1 basis point from a week ago. Last month on the 6th, the average rate on a 30-year fixed mortgage was higher, at 3.08 percent.

At the current average rate, you’ll pay principal and interest of $424.85 for every $100,000 you borrow. That’s $0.54 lower, compared with last week.

You can use Bankrate’s mortgage rate calculator to estimate your monthly payments and find out how much you’ll save by adding extra payments. It will also help you computehow much interest you’ll pay over the life of the loan.

15-year fixed mortgages

The average 15-year fixed-mortgage rate is 2.57 percent, up 3 basis points since the same time last week.

Monthly payments on a 15-year fixed mortgage at that rate will cost around $670 per $100,000 borrowed. Yes, that payment is much bigger than it would be on a 30-year mortgage, but it comes with some big advantages: You’ll save thousands of dollars over the life of the loan in total interest paid and build equity much faster.

5/1 ARMs

The average rate on a 5/1 ARM is 3.11 percent, rising 20 basis points over the last week.

These loan types are best for those who expect to sell or refinance before the first or second adjustment. Rates could be considerably higher when the loan first adjusts, and thereafter.

Monthly payments on a 5/1 ARM at 3.11 percent would cost about $428 for each $100,000 borrowed over the initial five years, but could ratchet higher by hundreds of dollars afterward, depending on the loan’s terms.

Where rates are headed

To see where Bankrate’s panel of experts expect rates to go from here, check out our mortgage interest rates forecast.

Want to see where rates are at this moment? Lenders nationwide respond to our weekday mortgage rates survey to bring you the most current rates available. Here you can see the latest marketplace average rates for a wide variety of purchase loans:

Current average mortgage interest rates
Loan type Interest rate A week ago Change
30-year fixed rate 3.06% 3.07% -0.01
15-year fixed rate 2.57% 2.54% -0.03
30-year fixed jumbo rate 3.07% 3.10% -0.03
30-year fixed refinance rate 3.13% 3.06% +0.07

Updated on October 6, 2020.

Lock your mortgage rate now or wait?

A rate lock guarantees your interest rate for a specified period of time. Lenders often offer 30-day rate locks for a nominal fee or roll the price of the lock into your loan. Some lenders will lock rates for longer periods, even exceeding 60 days, but those locks can be pricey. In today’s volatile market, some lenders will lock an interest rate for only two weeks because they don’t want to take on unnecessary risk.

The benefit of a rate lock is that if interest rates rise, you’re locked into the guaranteed rate. You may be able to find a lender that offers a floating rate lock. A floating rate lock lets you get a lower rate if interest rates decline before closing your loan. It could be worth the cost in a declining rate environment. Because there is no guarantee of where mortgage rates will head in the future, it may be smart to lock in a low rate instead of holding out on rates for potentially decline further.

Remember: During the pandemic, all aspects of real estate and mortgage closings are taking much longer than usual. Expect the closing on a new mortgage to take at least 60 days, and expect refinancing to take at least a month..

What causes mortgage rates to move

A number of economic factors influence mortgage rates. Among them are inflation and unemployment. Higher inflation typically leads to higher mortgage rates. The opposite is also true; when inflation is low, mortgage rates typically are as well. As inflation increases, the dollar loses value. That drives investors away from mortgage-backed securities (MBS), which causes the prices to decrease and yields to increase. When yields move higher, rates become more expensive for borrowers.

A strong economy usually means more people buying homes, which drives demand for mortgages. This increased demand can push rates higher. The opposite is also true; less demand can trigger a drop in rates.

What are current mortgage rates?

Mortgage rates have been volatile because of the COVID-19 pandemic. Generally, though, rates have been low. For a while, some lenders were increasing rates because they were struggling to deal with the demand. In general, however, rates are consistently below 4 percent and even dipping into the mid to low 3s. This is an especially good time for people with good to excellent credit to lock in a low rate for a purchase loan. However, lenders are also raising credit standards for borrowers and demanding higher down payments as they try to dampen their risks.

Methodology: The rates you see above are Bankrate.com Site Averages. These calculations are run after the close of the previous business day and include rates and/or yields we have collected that day for a specific banking product. Bankrate.com site averages tend to be volatile — they help consumers see the movement of rates day to day. The institutions included in the “Bankrate.com Site Average” tables will be different from one day to the next, depending on which institutions’ rates we gather on a particular day for presentation on the site.

To learn more about the different rate averages Bankrate publishes, see “Understanding Bankrate’s Rate Averages.”

Other daily news articles:
Mortgage refinance rates today
Current 30-year mortgage and refinance rates
Shopping for the right lender?
Movement Mortgage Review
Valley National Bank Mortgage Review
CityWorth Mortgage Review
Sebonic Financial Mortgage Review
Explore other loan types
LOAN TYPE PURCHASE RATES REFINANCE RATES
The table above links out to loan-specific pages to help our readers learn more about rates by loan type.
30-Year Loan Today’s 30-Year Mortgage Rates 30-Year Refinance Interest Rates
20-Year Loan 20-Year Mortgage Rates 20-Year Refi Rates
15-Year Loan Current 15 Year Mortgage Rates 15-Year Mortgage Refinance Rates
10-Year Loan 10-Year Mortgage Rates 10-Year Mortgage Refinance Rates
FHA Loan FHA Mortgage Interest Rates Current FHA Loan Refinance Rates
VA Loan VA Mortgage Rates VA Refinance Loan Rates
ARM Loan ARM Mortgage Rates ARM Refinance Rates
Jumbo Loan Jumbo Mortgage Rates Jumbo Refi Interest Rates

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