Mortgage and refinance rates today, October 28, 2020

Peter Warden
The Mortgage Reports editor

Today’s mortgage and refinance rates 

Average mortgage rates inched lower yesterday. And conventional loans today start at 2.75% (2.75% APR) for a 30-year, fixed-rate mortgage. 

Mortgage rates would be lower yet were they closely shadowing other key markets, as they used to. Yes, they’re heading in the same direction. But much more slowly.

Find and lock a low rate (Dec 4th, 2020)

Current mortgage and refinance rates 

Program Mortgage Rate APR* Change
Conventional 30 year fixed
Conventional 30 year fixed 2.75% 2.75% Unchanged
Conventional 15 year fixed
Conventional 15 year fixed 3.063% 3.063% Unchanged
Conventional 5 year ARM
Conventional 5 year ARM 3% 2.743% Unchanged
30 year fixed FHA
30 year fixed FHA 2.25% 3.226% Unchanged
15 year fixed FHA
15 year fixed FHA 2.25% 3.191% Unchanged
5 year ARM FHA
5 year ARM FHA 2.5% 3.239% Unchanged
30 year fixed VA
30 year fixed VA 3.063% 3.242% Unchanged
15 year fixed VA
15 year fixed VA 2.25% 2.571% Unchanged
5 year ARM VA
5 year ARM VA 2.5% 2.419% Unchanged
Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions here.

Find and lock a low rate (Dec 4th, 2020)


COVID-19 mortgage updates: Mortgage lenders are changing rates and rules due to COVID-19. To see the latest on how coronavirus could impact your home loan, click here.

Should you lock a mortgage rate today?

For the reasons in “Are mortgage and refinance rates rising or falling?” (below), I stand by my opinion that mortgage rates are likely to carry on inching lower, though only slowly and unsteadily. And that those falls will be punctuated by occasional, brief and modest rises.

So my personal recommendations remain:

  • LOCK if closing in 7 days
  • LOCK if closing in 15 days
  • FLOAT if closing in 30 days
  • FLOAT if closing in 45 days
  • FLOAT if closing in 60 days

But, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So be guided by your gut and your personal tolerance for risk.

Market data affecting today’s mortgage rates 

Here’s the state of play this morning at about 9:50 a.m. (ET). The data, compared with about the same time yesterday morning, were:

  • The yield on 10-year Treasurys edged lower to 0.75% from 0.79%. (Good for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields, though less so recently
  • Major stock indexes were sharply lower on opening. (Good for mortgage rates.) When investors are buying shares they’re often selling bonds, which pushes prices of those down and increases yields and mortgage rates. The opposite happens when indexes are lower
  • Oil prices moved down to $37.45 from $38.87 a barrel. (Good for mortgage rates* because energy prices play a large role in creating inflation and also point to future economic activity.) 
  • Gold prices fell to $1,881 from $1,907 an ounce. (Bad for mortgage rates*.) In general, it’s better for rates when gold rises, and worse when gold falls. Gold tends to rise when investors worry about the economy. And worried investors tend to push rates lower.

*A change of less than $20 on gold prices or 40 cents on oil ones is a fraction of 1%. So we only count meaningful differences as good or bad for mortgage rates.

Owing to its inaccessibility, we’ve dropped the CNN Business Fear and Greed index from the above list. We’ll be happy to reinstate it when we can view it.

Before the pandemic and the Federal Reserve’s interventions in the mortgage market, you could look at the above figures and make a pretty good guess about what would happen to mortgage rates that day. But that’s no longer the case. The Fed is now a huge player and some days can overwhelm investor sentiment.

So use markets only as a rough guide. They have to be exceptionally strong (rates are likely to rise) or weak (they could fall) to rely on them. Today, they’re looking good for mortgage rates.

Find and lock a low rate (Dec 4th, 2020)

Important notes on today’s mortgage rates

Here are some things you need to know:

  1. The Fed’s ongoing interventions in the mortgage market (way over $1 trillion) should put continuing downward pressure on these rates. But it can’t work miracles all the time. So expect short-term rises as well as falls. And read “For once, the Fed DOES affect mortgage rates. Here’s why” if you want to understand this aspect of what’s happening
  2. Typically, mortgage rates go up when the economy’s doing well and down when it’s in trouble. But there are exceptions. Read How mortgage rates are determined and why you should care
  3. Only “top-tier” borrowers (with stellar credit scores, big down payments and very healthy finances) get the ultralow mortgage rates you’ll see advertised
  4. Lenders vary. Yours may or may not follow the crowd when it comes to rate movements — though they all usually follow the wider trend over time
  5. When rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
  6. Refinance rates are typically close to those for purchases. But some types of refinances from Fannie Mae and Freddie Mac are currently appreciably higher following a regulatory change

So there’s a lot going on here. And nobody can claim to know with certainty what’s going to happen to mortgage rates in coming hours, days, weeks or months.

Are mortgage and refinance rates rising or falling?

Today

There seems little on the horizon that’s likely to cheer up markets more than briefly. But tomorrow’s gross domestic product (GDP) figures might provide just such a short fillip.

However, everyone knows they cover the third quarter (July-September), which was a very different time from now. Back then, people were hoping COVID-19 was retreating and the economic recovery was surging.

But now we know it’s the virus that’s surging (500,000 new cases in America just this last week) and the economy that might well soon be in retreat. So tomorrow’s cheer, if it comes, may be hollow.

Meanwhile, hopes for a preelection economic stimulus package seem to be transitioning from life support to the morgue. And the possibility of a disputed election result looms.

Small wonder, then, that Robert J. Shiller, Sterling Professor of Economics at Yale, wrote in The New York Times on Oct. 23:

The coronavirus crisis and the November election have driven fears of a major market crash to the highest levels in many years. At the same time, stocks are trading at very high levels. That volatile combination doesn’t mean that a crash will occur, but it suggests that the risk of one is relatively high. This is a time to be careful.

All of this gloom is great news for those who want lower mortgage rates. But it’s terrible for everyone else.

Recently

Over the last few months, the overall trend for mortgage rates has clearly been downward. A new all-time low was set early in August and we’ve gotten close to others since. Indeed, Freddie Mac said that a new low was set during each of the weeks ending Oct. 15 and 22.

But not every mortgage expert agrees with Freddie’s figures. In particular, Freddie’s relate to purchase mortgages alone and ignore refinances. And if you average out across both, rates are higher than the all-time low.

Expert mortgage rate forecasts

Looking further ahead, Fannie Mae, Freddie Mac and the Mortgage Bankers Association (MBA) each has a team of economists dedicated to monitoring and forecasting what will happen to the economy, the housing sector and mortgage rates.

And here are their current rates forecasts for the last quarter of 2020 (Q4/20) and the first three of 2021 (Q1/21, Q2/21 and Q3/21).

Note that Fannie’s (out on Oct. 19) and the MBA’s (Oct. 21) are updated monthly. However, Freddie’s are now published quarterly. Its latest was released on Oct. 14.

The numbers in the table below are for 30-year, fixed-rate mortgages:

ForecasterQ4/20Q1/21Q2/21Q3/21
Fannie Mae2.9%2.8%2.8%2.8%
Freddie Mac3.0%3.0%3.0%3.0%
MBA3.0%3.1%3.1%3.2%

So predictions vary considerably. You pays yer money …

Find your lowest rate today

The pandemic — together with a surge in home sales and mortgage and refinance applications — has created some turmoil in the home loans industry.

And that’s making it harder for some borrowers to find the sorts of mortgages they need. So be prepared to shop around even more widely than usual.

But, of course, comparison shopping for a loan is always important. As federal regulator the Consumer Financial Protection Bureau says:

Shopping around for your mortgage has the potential to lead to real savings. It may not sound like much, but saving even a quarter of a point in interest on your mortgage saves you thousands of dollars over the life of your loan.

Verify your new rate (Dec 4th, 2020)

Mortgage rate methodology

The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.