Several key mortgage rates ticked downward today. The average rates on 30-year fixed and 15-year fixed mortgages both were down. On the variable-mortgage side, the average rate on 5/1 adjustable-rate mortgages also receded.
Average mortgage interest rates
Product Rate Last week Change
30-year fixed 2.92% 2.96% -0.04
15-year fixed 2.44% 2.47% -0.03
30-year fixed jumbo 2.97% 2.94% +0.03
30-year fixed refinance 3.06% 3.05% +0.01
Rates as of November 25, 2020.
Rates for mortgages are constantly changing, but they have remained in a historically low range for quite some time. 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 don’t do so without shopping around first.
Compare mortgage rates in your area now.
30-year fixed mortgages
The average 30-year fixed-mortgage rate is 2.92 percent, down 4 basis points since the same time last week. Last month on the 25th, the average rate on a 30-year fixed mortgage was higher, at 3.03 percent.
At the current average rate, you’ll pay $417.30 per month in principal and interest for every $100,000 you borrow. That’s $2.15 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 calculate how much interest you’ll pay over the life of the loan.
The average 15-year fixed-mortgage rate is 2.44 percent, down 3 basis points over the last seven days.
Monthly payments on a 15-year fixed mortgage at that rate will cost around $664 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 more quickly.
5/1 Adjustable Rate Mortgage Rates
The average rate on a 5/1 ARM is 3.02 percent, ticking down 1 basis point over the last 7 days.
These types of loans are best for people 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 3.02 percent would cost about $423 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 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:
Should you lock a 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 mortgage lenders will lock rates for longer periods, sometimes for more than 60 days, but those locks can be expensive. In today’s unstable 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. Some lenders have a floating-rate lock option, which allows you to get a lower rate if interest rates fall before you close your loan. In a falling rate environment, a float-down lock could be worth the cost. 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.
It’s important to keep in mind: 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, with refinancing taking at least a month.
Factors that influence mortgage rates
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.
Current mortgage rate environment
Mortgage rates have been volatile because of the COVID-19 pandemic. Generally, though, rates have been low. Mortgage rates are rising and falling from week to week, as lenders are inundated with forbearance and refinance requests. 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.
Are mortgage rates rising or falling?
Mortgage rates have fallen to record lows in recent months. Where they’ll go from here is nearly impossible to predict. The direction of rates depends largely on the direction of the economy. It also depends on how well the coronavirus pandemic is contained. The general consensus: If the economy continues to bounce back, and if drugmakers are successful in developing a vaccine, rates will rise. On the other hand, if the economy struggles because of coronavirus-related setbacks, mortgage rates will remain at record lows or fall even 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.
However, that sort of decline also can help push up home prices — and values indeed have jumped in recent months.
Here’s an example to show how soaring home prices and plunging mortgage rates can have offsetting effects. Let’s say you chose not to buy a $300,000 home a year ago, when the 30-year mortgage rate was around 3.75 percent. Your 20 percent down payment would’ve been $60,000 and your monthly payment would’ve been $1,111.
Today, the price of the same home has jumped to $335,000, but you can land a 30-year loan 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 exacerbated a shortage of homes, leading to bidding wars and rising prices. Those trends mean it can be a frustrating market for buyers.
To learn more about the different rate averages Bankrate publishes, see “Understanding Bankrate’s average rates.”
Current mortgage refinance rates
Today’s 30-year mortgage rates
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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.