Today’s mortgage and refinance rates
Average mortgage rates rose yesterday. It was the first increase in more than a week. And it barely made a dent in those recent falls.
Unfortunately, that rise may not be the last. And I’m expecting 2021’s upward trend to resume, probably right away. So mortgage rates might rise modestly next week. Let’s hope I’m wrong – as I was when I made the same prediction last week.Find and lock a low rate (Nov 26th, 2021)
Current mortgage and refinance rates
|Conventional 30 year fixed|
|Conventional 30 year fixed||3.426%||3.444%||-0.03|
|Conventional 15 year fixed|
|Conventional 15 year fixed||2.829%||2.859%||Unchanged|
|Conventional 20 year fixed|
|Conventional 20 year fixed||3.278%||3.314%||-0.05|
|Conventional 10 year fixed|
|Conventional 10 year fixed||2.782%||2.839%||Unchanged|
|30 year fixed FHA|
|30 year fixed FHA||3.546%||4.315%||Unchanged|
|15 year fixed FHA|
|15 year fixed FHA||2.852%||3.5%||Unchanged|
|5/1 ARM FHA|
|5/1 ARM FHA||2.753%||3.278%||Unchanged|
|30 year fixed VA|
|30 year fixed VA||3.393%||3.589%||Unchanged|
|15 year fixed VA|
|15 year fixed VA||3.015%||3.359%||Unchanged|
|5/1 ARM VA|
|5/1 ARM VA||2.606%||2.51%||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?
Some economists put this week’s falls down to technical reasons. Big investors often use the end of each calendar quarter to reassess and rebalance their portfolios. And they could account for lower rates.
If so, the lull in increases will be temporary. And yesterday’s rise might herald a resumption (now or soon) of the upward trend. Read on for why the underlying drivers of that trend remain powerful.
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
We all want to believe this week’s falls in mortgage rates were the beginning of a new trend that will bring fresh all–time lows. But I fear that’s unlikely.
The explanation I offered earlier (investors rebalancing their portfolios at the end of the quarter) seems more likely to me. And other factors may have added to that.
For example, some economic data have been disappointing recently. If that data were indicative of underlying problems, we might indeed see further rate falls. But most of those numbers were down to extreme weather conditions in February (think Texas) rather than continuing economic problems.
Of course, we have those, especially with employment. But the economic recovery looks to be accelerating and will probably bring a boom. And as long as investors see that as the case, they’re likely to push mortgage rates higher. So, absent some cataclysmic event that undermines the recovery, chances are we have months of rises ahead of us.
Don’t despair. As recently as 2008, if you’d told your parents or grandparents that you’d one day have a mortgage with a rate that began with a 3, they’d have thought you delusional. And, by historical standards, today’s rates are still ridiculously low.
Economic reports next week
Once again, Friday’s the big day next week. That’s when the monthly employment situation report is published. And that’s arguably the most important report of all at the moment.
Investors and analysts are less likely to care much about the other reports next week. Unless, that is, they differ wildly from expectations. Even minor reports can move markets if they contain unexpected news.
Here are next week’s main economic reports:
- Tuesday – January Case–Shiller national home price index and March consumer confidence index
- Wednesday – March ADP employment report (private sector jobs)
- Thursday – Weekly new claims for unemployment insurance. Plus March Institute for Supply Management (ISM) manufacturing index and motor vehicle sales with February construction spending
- Friday – March employment situation report, comprising nonfarm payrolls, unemployment rate and average hourly earnings
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
Sadly, I expect that we’ll look back and see this week’s falls as a little squiggle in a graph line that continues upward. In other words, I think mortgage rates are likely to resume their rises next week, although some days of falls would be unsurprising.
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.
Meanwhile, a recent regulatory change has made most mortgages for investment properties and vacation homes more expensive.
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.