Mortgage and refinance rates today, January 19, 2021

Peter Warden
The Mortgage Reports editor

Today’s mortgage and refinance rates 

Average mortgage rates had a good week last week with another small fall on Friday. They’re now 10 or 11 basis points (a basis point is one-hundredth of one percent) above the all-time low. But that’s still an exceptionally great rate.

Judging by markets first thing this morning, it looks as if mortgage rates might have a quiet day today, holding steady or just inching either side of the neutral line. But, of course, that could change as the hours pass.

Find and lock a low rate (Feb 26th, 2021)

Current mortgage and refinance rates 

Program Mortgage Rate APR* Change
Conventional 30 year fixed
Conventional 30 year fixed 2.745% 2.745% Unchanged
Conventional 15 year fixed
Conventional 15 year fixed 2.313% 2.313% Unchanged
Conventional 5 year ARM
Conventional 5 year ARM 3% 2.743% Unchanged
30 year fixed FHA
30 year fixed FHA 2.438% 3.415% Unchanged
15 year fixed FHA
15 year fixed FHA 2.438% 3.38% Unchanged
5 year ARM FHA
5 year ARM FHA 2.5% 3.226% -0.01%
30 year fixed VA
30 year fixed VA 2.308% 2.479% Unchanged
15 year fixed VA
15 year fixed VA 2.25% 2.571% Unchanged
5 year ARM VA
5 year ARM VA 2.5% 2.406% -0.01%
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 (Feb 26th, 2021)

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?

We’re still in a position where discerning mortgage rate trends is impossible. Conflicting forces are currently acting on them (read on for details), one pushing them higher and the other dragging them lower. And nobody knows which will win out.

So we’re unusually uncertain about what to expect for weeks and months to come. But, for now, my personal rate lock recommendations, which are only my hunches, are:

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

Still, 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.

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Market data affecting today’s mortgage rates 

Here’s a snapshot of 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 1.11%. (Bad 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 edged lower to 52.83 from $52.89 a barrel. (Neutral for mortgage rates* because energy prices play a large role in creating inflation and also point to future economic activity.) 
  • Gold prices nudged down to $1,836 from $1,842 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 — Inched down to 61 from 63 out of 100. (Good 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, so far mortgage rates today look likely to remain unchanged or barely changed.

Find and lock a low rate (Feb 26th, 2021)

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. 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 daily 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 are 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 and soon

I’m expecting mortgage rates to hardly move today. But that could change as the hours pass.

So what are those conflicting forces mentioned above? Well, the one winning out last week was the pandemic, which continues to cause serious damage to the economy. And struggling economies almost always have low rates.

The other force is the likelihood of higher government borrowing under the incoming administration. Now, this is a bit more complicated and involves the action of supply and demand in bond markets on prices and yields. But suffice to say that extra borrowing tends to increase yields on US Treasury bonds — and push up mortgage rates.

Unfortunately, nobody can confidently predict which of these forces will eventually prove stronger. We can be pretty sure mortgage rates will rise once vaccines turn the tide of the pandemic and return the economy to something close to normal.

But that’s likely to be several months in the future. And, in the meantime, we can only watch the two forces wrestle for advantage.

Recently

Over the last several months, the overall trend for mortgage rates has clearly been downward. And a new, weekly all-time low was set on 16 occasions last year, according to Freddie Mac.

The most recent such record occurred on Jan. 7. But that had already been overtaken by events, even before it was published. And rates are now appreciably higher, as the latest, Jan. 14, announcement from Freddie confirmed.

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 each quarter of 2021 (Q1/21, Q2/21, Q3/21 and Q4/21).

Fannie’s were released on Jan. 15, Freddie’s on Jan. 14 and the MBA’s on Dec. 21. The numbers in the table below are for 30-year, fixed-rate mortgages:

Forecaster Q1/21 Q2/21 Q3/21 Q4/21
Fannie Mae 2.7% 2.7% 2.8% 2.8%
Freddie Mac 2.9% 2.9% 3.0% 3.0%
MBA 2.9% 3.0% 3.2% 3.2%

But, given so many unknowables, the current crop of forecasts may be even more speculative than usual.

Find your lowest rate today

Some lenders have been spooked 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:

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 (Feb 26th, 2021)

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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.