Current Mortgage Rates, October 23, 2020 | Rates climb

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Several benchmark mortgage rates floated higher today. The average rates on 30-year fixed and 15-year fixed mortgages both moved higher. On the variable-mortgage side, the average rate on 5/1 adjustable-rate mortgages sunk lower.

Today’s mortgage interest rates
Loan term Today’s Rate Last week Change
30-year mortgage rate 3.03% 3.02% +0.01
15-year mortgage rate 2.57% 2.54% -0.03
30-year jumbo mortgage rate 3.09% 3.06% +0.03
30-year mortgage refinance rate 3.19% 3.13% +0.06

Rates accurate as of October 23, 2020.

Mortgage rates change daily, but they have remained in a historically low range for quite some time. If you’re in the market for a mortgage, it may be a great time to lock in a rate. Just don’t do so without shopping around first.

Find the right mortgage rate for your specific criteria.

30-year fixed mortgages

The average rate for the benchmark 30-year fixed mortgage is 3.03 percent, up 1 basis point over the last seven days. A month ago, the average rate on a 30-year fixed mortgage was lower, at 3.02 percent.

At the current average rate, you’ll pay a combined $423.22 per month in principal and interest for every $100,000 you borrow. That’s $0.54 higher compared with last week.

You can use Bankrate’s mortgage payment calculator to figure out your monthly payments and see the effect of adding extra payments. It will also help you determinehow 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. The bigger payment may be a little more difficult to find room for in your monthly budget than a 30-year mortgage payment would, 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 3.06 percent, sliding 2 basis points over the last 7 days.

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

Monthly payments on a 5/1 ARM at 3.06 percent would cost about $425 for each $100,000 borrowed over the initial five years, but could climb hundreds of dollars higher 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 rate predictions for this week.

Want to see where rates are right now? 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:

When to lock your mortgage rate

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, sometimes for more than 60 days, but those locks can be costly. In today’s volatile market, some lenders will lock an interest rate for only two weeks to avoid 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.

Why do mortgage rates move up and down?

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.

Generally speaking, when the economy is strong, more people buy homes. That drives demand for mortgages. Increased demand for mortgages can cause rates to increase. The opposite is also true; less demand can lead to lower rates.

Are mortgage rates rising or falling?

Mortgage rates have hovered around all-time lows in recent months, but where they go from here is nearly impossible to predict. Much depends on the direction of the economy, and how well public health officials can contain the coronavirus pandemic. The general consensus: If the economy continues to bounce back, and if drugmakers are successful in developing a vaccine, rates will rise. However, if the economy suffers pandemic-related setbacks, rates will stay low or even fall further.

How do mortgage rates affect homebuyers?

In this housing boom, mortgage rates have been a mixed bag for buyers. Low rates give borrowers more buying power. A $300,000 loan at 4 percent equates to a monthly payment of $1,432. If rates fall to 3 percent, the payment plunges to $1,265.

One downside, however, is that a significant decline in mortgage rates can help push up home prices. Indeed, home values have increased in recent months.

Here’s one way to see the offsetting effects of soaring home prices and plunging mortgage rates. Say you decided not to buy a $300,000 home a year ago, when the 30-year mortgage rate was at about 3.75 percent. Your down payment at 20 percent would have been $60,000, and your monthly payment would have been $1,111.

The price of the same house has jumped to $335,000 today. However, you can get a 30-year mortgage at 3 percent. As a result, your monthly payment rises only slightly, to $1,130. However, you’ll have to come up with an extra $7,000 to make a 20 percent down payment.

Is now a good time to buy a house?

There’s never a straightforward answer to this question. It always depends. Do you have a reliable income, a good credit score and money saved for a down payment and repairs? If you can answer all of those questions affirmatively, you’re ready to buy.

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.

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 average rates.”

Read about other loan terms:
Refinance interest rates today
30 year interest rates today
Shopping for the right mortgage lender?
Movement Mortgage Review
Ally Home Mortgage Review
CityWorth Mortgage Review
Valley National Bank Mortgage Review
Check rates for specific loan types
PRODUCT PURCHASE RATES REFINANCE RATES
The chart above links out to loan-specific content to help our readers learn more about rates by mortgage type.
30-Year Loan 30 Year Fixed Mortgage Rates 30-Year Refinance Interest Rates
20-Year Loan 20-Year Mortgage Interest Rates 20-Year Refinance Interest Rates
15-Year Loan Today’s 15-Year Mortgage Rates 15-Year Refi Interest Rates
10-Year Loan 10-Year Fixed Mortgage Rates Current 10-Year Refinance Rates
FHA Loan FHA Mortgage Interest Rates FHA Refinance Rates
VA Loan VA Mortgage Rates VA Refi Interest Rates
ARM Loan ARM Interest Rates ARM Refi Mortage Rates
Jumbo Loan Jumbo Loan Interest Rates Current Jumbo Refinance Rates

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