Today’s mortgage and refinance rates
Average mortgage rates fell again last Friday. And conventional loans started out this morning at 3.063% (3.063% APR) for a 30-year, fixed-rate mortgage.
There was another vaccine announcement overnight. And that wasn’t good for borrowers. Mortgage rates look likely to hold steady or inch higher today rather than fall.Find and lock a low rate (Dec 3rd, 2020)
Current mortgage and refinance rates
|Conventional 30 year fixed|
|Conventional 30 year fixed||3.063%||3.063%||Unchanged|
|Conventional 15 year fixed|
|Conventional 15 year fixed||2.813%||2.813%||Unchanged|
|Conventional 5 year ARM|
|Conventional 5 year ARM||3%||2.743%||Unchanged|
|30 year fixed FHA|
|30 year fixed FHA||3%||3.982%||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%||3.179%||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.|
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?
I wouldn’t lock today unless I were close to closing. Although good-news items (such as today’s vaccine-related one) can generate rate rises, they tend to be short-lived.
Last week’s from Pfizer caused two days of increases before small falls resumed. This morning’s bump following Moderna’s announcement so far seems to be lasting closer to two hours. See “Are mortgage and refinance rates rising or falling?” (below) for more.
So, my personal rate lock recommendations are:
- 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 last Friday morning, were:
- The yield on 10-year Treasurys held steady at 0.90%. (Neutral 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 higher on opening. (Bad 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 rose to $41.65 from $40.57 a barrel. (Bad for mortgage rates* because energy prices play a large role in creating inflation and also point to future economic activity.)
- Gold prices edged down to $1,888 from $1,892 an ounce. (Neutral 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
- CNN Business Fear & Greed index — Rose to 69 from 59 out of 100. (Bad for mortgage rates.) “Greedy” investors push bond prices down (and interest rates up) as they leave the bond market and move into stocks, while “fearful” investors do the opposite. So lower readings are better than higher ones
*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.
Caveats about markets and rates
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. But, with that caveat, they’re looking quiet for mortgage rates today.
Important notes on today’s mortgage rates
Here are some things you need to know:
- 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
- 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
- Only “top-tier” borrowers (with stellar credit scores, big down payments and very healthy finances) get the ultralow mortgage rates you’ll see advertised
- Lenders vary. Yours may or may not follow the crowd when it comes to daily rate movements — though they all usually follow the wider trend over time
- When rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
- 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?
We were quietly confident in predicting lower rates right up until Moderna announced progress on its vaccine this morning. Now we think mortgage rates are likely to hold steady or just inch higher today.
Moderna’s trial showed an efficacy rate of nearly 95%, which is even better than Pfizer’s previously amazing 90%. And Moderna’s product is much easier to store and transport. So it’s not surprising that markets initially responded positively.
But that optimism evaporated within hours. Because things elsewhere are looking grim.
This morning’s Financial Times ran the headline, “US surge in coronavirus cases darkens outlook for economy.” And, with The New York Times reporting new cases up 81% over the previous 14 days, that’s undeniable. Many governors and mayors are already imposing new COVID-19 restrictions, which must inevitably have grave economic consequences.
The good news on vaccines is tempered by the fact that they won’t come soon enough to prevent a difficult winter for many economies.Neil Shearing, group chief economist, Capital Economics — quoted by CNN Business
Of course, the Moderna and Pfizer vaccines could eventually change everything. But how quickly? Over the weekend, the CEO of BioNTech (Pfizer’s partner in its vaccine project) appeared on the BBC. Uğur Şahin said that:
- Even if the vaccine were distributed and administered with all possible speed it would likely be next winter before it had a serious impact on the pandemic
- In the field, it would probably reduce infection rates by 50%, even though it had 90% efficacy in trials
As this reality sinks in, you might expect mortgage rates to gradually move yet lower over the next few months — absent other, shockingly good events. After all, two vaccines are unlikely to halve the time it takes to get the population inoculated in large numbers.
Over the last few months, the overall trend for mortgage rates has clearly been downward. A new all-time low was set during each of the weeks ending Oct. 15 and 22 and Nov. 5, according to Freddie Mac. However, last Thursday’s report said rates had “jumped” that week.
But note that Freddie’s figures relate to purchase mortgages alone and ignore refinances. And if you average out across both, rates have been consistently higher than the all-time low since a record set in August. The gap between the two has been widened by a controversial regulatory change.
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).
But note that Fannie’s (out on Oct. 19) and the MBA’s (Oct. 21) are updated monthly. However, Freddie’s are now published quarterly. And its latest was released on Oct. 14.
The numbers in the table below are for 30-year, fixed-rate mortgages:
So predictions vary considerably. You pays yer money …
Find your lowest rate today
Some lenders have been made nervous by the pandemic. And they’re restricting their offerings to just the most vanilla-flavored mortgages and refinances.
But others remain brave. And you can still probably find the cash-out refinance, investment mortgage or jumbo loan you want. You just have to shop around more widely.
But, of course, you should be comparison shopping widely, no matter what sort of mortgage you want. As federal regulator the Consumer Financial Protection Bureau says:
Verify your new rate (Dec 3rd, 2020)
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.
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.