Today’s mortgage and refinance rates
Average mortgage rates climbed higher yesterday. There have been plenty of up–and–down daily movements this week. But the overall rise has been fairly modest.
Still, the cumulative rises over the last couple of months have taken their toll. Indeed, Mortgage News Daily reckons rates were yesterday at their highest in a year. And, right now, they look set to continue to climb. So I’m expecting that mortgage rates will again rise modestly next week.Find and lock a low rate (Dec 6th, 2021)
Current mortgage and refinance rates
|Conventional 30 year fixed|
|Conventional 30 year fixed||3.291%||3.31%||Unchanged|
|Conventional 15 year fixed|
|Conventional 15 year fixed||2.528%||2.557%||Unchanged|
|Conventional 20 year fixed|
|Conventional 20 year fixed||3.126%||3.158%||Unchanged|
|Conventional 10 year fixed|
|Conventional 10 year fixed||2.618%||2.68%||Unchanged|
|30 year fixed FHA|
|30 year fixed FHA||3.307%||4.071%||Unchanged|
|15 year fixed FHA|
|15 year fixed FHA||2.585%||3.229%||Unchanged|
|5/1 ARM FHA|
|5/1 ARM FHA||2.177%||3.085%||Unchanged|
|30 year fixed VA|
|30 year fixed VA||3.202%||3.397%||Unchanged|
|15 year fixed VA|
|15 year fixed VA||3.001%||3.345%||Unchanged|
|5/1 ARM VA|
|5/1 ARM VA||2.559%||2.441%||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?
The trend for mortgage rates so far this year has been upward. And I can’t currently see any reason to think it will suddenly reverse. Of course, such a reversal is not impossible; just unlikely.
So my recommendations remain:
- LOCK if closing in 7 days
- LOCK if closing in 15 days
- LOCK if closing in 30 days
- LOCK if closing in 45 days
- LOCK if closing in 60 days
However, 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.
What’s moving current mortgage rates
It was the economic effects of the pandemic that caused mortgage rates to tumble to several new all–time lows last year. And it’s the prospect of a post–pandemic recovery that’s now pushing them higher.
This week, that recovery got two serious boosts. First, the $1.9–trillion American Rescue Plan Act of 2021 became law. That should flood the economy with cash, much of which will be spent quickly.
And, secondly, President Joe Biden unveiled his timetable for the vaccine rollout. Every American adult should have access to one from May 1. And there is hope that life will nearly be back to normal by July 4. Meanwhile, COVID–19 figures for new cases, hospitalizations and deaths continue to tumble.
So the economic recovery looks increasingly certain and increasingly likely to kick in sooner than previously expected. And that means more certain rises in mortgage rates more quickly than we once thought.
Inflation fears fading
Last week, we were talking about investors’ fears of future inflation further stoking mortgage rate rises. But those fears evaporated midweek when the February consumer price index was published. That showed lower inflation that month than most analysts had expected.
However, those fears could reemerge as quickly as they disappeared. And, if they do, they’ll probably accelerate rises in mortgage rates.
Although everything currently looks set fair for the recovery, stuff happens. And nobody knows what the future holds.
For example, some economists think the stock market is in bubble territory. And, were that to burst, we could see lower mortgage rates.
More scary is the possible emergence of a vaccine–resistant variant of SARS–CoV–2, the virus that causes COVID–19. True, scientists seem confident that they can quickly re–engineer existing vaccines to counter such an eventuality. But it would take time to roll those out. And that would cause the recovery to stumble, probably pushing mortgage rates lower.
Both of these (and there are others) are possibilities rather than probabilities. And the smart money is on the recovery doing just fine. So I would not recommend using them as an excuse to delay locking your mortgage rate.
Economic reports next week
Tuesday’s the big day for economic reports next week. Figures for retail sales and industrial production are out that day.
But Wednesday is also important for markets. Because Federal Reserve Chair Jerome Powell will hold a 2:30 p.m. (ET) news conference following the latest meeting of the key Fed policy committee, the Federal Open Market Committee (FOMC). Investors may well react to what’s said both there and in the documentation that’s published 30 minutes earlier.
Markets may well shrug off the other reports this week. However, any data can have an impact if it varies significantly from expectations.
Here are next week’s main economic reports:
- Tuesday – February retail sales and industrial production
- Wednesday – February housing starts and building permits. Plus that FOMC news conference and publication
- Thursday – Weekly new claims for unemployment insurance.
Typically, markets react to unexpectedly good news with higher mortgage rates. You usually see lower rates if figures are bad. But it takes a lot to move them far.
Mortgage interest rates forecast for next week
For the last couple of months, it’s been groundhog day for mortgage rates: mostly small rises slightly outweighing mostly small falls. And I’m not expecting that to change this week.
Mortgage and refinance rates usually move in tandem. But note that refinance rates are currently a little higher than those for purchase mortgages. That gap’s likely to remain constant as they change.
How your mortgage interest rate is determined
Mortgage and refinance rates are generally determined by prices in a secondary market (similar to the stock or bond markets) where mortgage–backed securities are traded.
And that’s highly dependent on the economy. So mortgage rates tend to be high when things are going well and low when the economy’s in trouble.
But you play a big part in determining your own mortgage rate in five ways. You can affect it significantly by:
- Shopping around for your best mortgage rate – They vary widely from lender to lender
- Boosting your credit score – Even a small bump can make a big difference to your rate and payments
- Saving the biggest down payment you can – Lenders like you to have real skin in this game
- Keeping your other borrowing modest – The lower your other monthly commitments, the bigger the mortgage you can afford
- Choosing your mortgage carefully – Are you better off with a conventional, FHA, VA, USDA, jumbo or another loan?
Time spent getting these ducks in a row can see you winning lower rates.
Remember, it’s not just a mortgage rate
Be sure to count all your forthcoming homeownership costs when you’re working out how big a mortgage you can afford. So focus on your “PITI” That’s your Principal (pays down the amount you borrowed), Interest (the price of borrowing), (property) Taxes, and (homeowners) Insurance. Our mortgage calculator can help with these.
Depending on your type of mortgage and the size of your down payment, you may have to pay mortgage insurance, too. And that can easily run into three figures every month.
But there are other potential costs. So you’ll have to pay homeowners association dues if you choose to live somewhere with an HOA. And, wherever you live, you should expect repairs and maintenance costs. There’s no landlord to call when things go wrong!
Finally, you’ll find it hard to forget closing costs. You can see those reflected in the annual percentage rate (APR) you’ll be quoted. Because that effectively spreads them out over your loan’s term, making that higher than your straight mortgage rate.
But you may be able to get help with those closing costs and your down payment, especially if you’re a first–time buyer. Read:
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.