The average rate on a conventional 30-year fixed-rate mortgage is 3.257% today, slightly higher than it was on Friday. The rates for other loan categories, such as FHA and VA loans, are lower.

Rates remain very low, and borrowers with strong credit who apply for a new home loan or refinance their existing loan will find attractive rates and low monthly payments.

• The last rate on a 30 year fixed rate mortgage is 3.257%.
• The last rate for a 15 year fixed rate mortgage is 2.368%.
• The latest rate on a Jumbo ARM 5/1 is 2.168%.
• The latest rate on a 7/1 compliant ARM is 3.345%.
• The latest rate on a 10/1 compliant ARM is 3.677%.

Current mortgage rates: 30-year fixed rate mortgage rates

• The 30-year rate is 3.257%.
• It’s a day infold by 0.006 percentage point. ??
• It’s a month offold by 0.013 percentage point. ??

The advantages of fixed rate mortgages include stable interest rates and predictable monthly payments. With a fixed term of 30 years, the most popular of all mortgage options, the long payback period translates into lower monthly payments than shorter-term loans. However, the interest rate is usually higher, so despite the low payments, you will actually be paying more for the loan in the form of higher interest.

Current mortgage rates: 15 years fixed rate mortgage rates

• The 15-year rate is 2.368%.
• It’s a day infold by 0.012 percentage point. ??
• It’s a month infold by 0.012 percentage point. ??

A 15 year fixed rate mortgage has many of the same benefits as a 30 year fixed rate loan. However, since 15-year borrowers agree to repay their debt in half the time, the monthly payments on the same size loan will be higher. The interest rate will be lower, however, so you will save money by not paying as much interest.

Current mortgage rates: jumbo variable rate mortgage rates 5/1

• The ARM 5/1 rate is 2.168%.
• It is unchanged starting on Friday. ??
• It’s a month offold by 0.048 percentage point. ??

If you opt for an adjustable rate loan, you will start with a fixed interest rate for the first few years of the loan. Thereafter, the rate will be reset at specific intervals. The monthly payments will be fixed initially, then adjusted when the rate is reset. An ARM 5/1, for example, will have a fixed rate and monthly payments for five years. After five years, the rate and payments will change each year. Besides the 5/1 adjustable rate loan, you can also find ARM 7/1 and ARM 10/1.

Current mortgage rates: VA, FHA and jumbo loan rates

The average rates for FHA, VA and jumbo loans are:

• The rate on a 30-year FHA mortgage is 2.99%. ??
• The rate for a 30-year VA mortgage is 3.027%. ??
• The rate for a 30-year jumbo mortgage is 3.363%. ??

Current mortgage refinancing rates

The average rates for 30-year, 15-year and 5/1 jumbo ARM loans are:

• The refinance rate on a 30 year fixed rate refinance is 3.41%. ??
• The refinance rate on a 15 year fixed rate refinance is 2.483%. ??
• The refinancing rate on an ARM 5/1 jumbo is 2.428%. ??
• The refinancing rate on a 7/1 compliant ARM is 4.184%. ??
• The refinancing rate on a 10/1 compliant ARM is 3.924%. ??

Where Are Mortgage Rates Going This Year?

Mortgage rates fell through 2020. Millions of homeowners responded to low mortgage rates by refinancing existing loans and taking out new ones. Many people have bought homes that they might not have been able to afford if the rates were higher.

In January 2021, rates briefly fell to all-time low levels, but tended to rise throughout the month and into February.

Looking ahead, experts believe that interest rates will rise further in 2021, but modestly. Factors that could influence the rates include how quickly COVID-19 vaccines are distributed and when lawmakers can agree on another cost-effective relief package. More vaccinations and government stimulus could lead to improved economic conditions, which would increase rates.

Although mortgage rates are likely to rise this year, experts say the increase will not happen overnight and it will not be a dramatic jump. Rates are expected to stay near their historically low levels throughout the first half of the year, rising slightly later in the year. Even with rates rising, this will still be a good time to finance a new home or refinance a mortgage.

Factors that influence mortgage rates include:

• The Federal Reserve. The Fed took swift action when the pandemic hit the United States in March 2020. The Fed announced its intention to move money through the economy by lowering the Federal Fund’s short-term interest rate between 0% and 0.25%, which is as low as they go. The central bank has also committed to buying mortgage-backed securities and treasury bills, thereby supporting the housing finance market. The Fed has reaffirmed its commitment to these policies for the foreseeable future on several occasions, most recently at a policy meeting in late January.
• The 10-year Treasury note. Mortgage rates move at the same pace as the yields on 10-year government treasury bills. Yields fell below 1% for the first time in March 2020 and have slowly risen since then. Currently, yields have hovered above 1% year-to-date, pushing interest rates up slightly. On average, there is typically a 1.8 point “spread” between Treasury yields and benchmark mortgage rates.
• The economy in the broad sense. Unemployment rates and changes in gross domestic product are important indicators of the overall health of the economy. When employment and GDP growth are low, it means the economy is weak, which can lower interest rates. Thanks to the pandemic, unemployment levels hit historic highs early last year and have yet to recover. GDP has also been affected, and although it has rebounded somewhat, there is still a lot of room for improvement.

Tips for getting the lowest mortgage rate possible

There is no universal mortgage rate that all borrowers receive. Qualifying for the lowest mortgage rates takes a bit of work and will depend on both personal financial factors and market conditions.

Check your credit score and your credit report. Mistakes or other red flags that can lower your credit score. The borrowers with the highest credit scores will get the best rates, so it’s essential to check your credit report before you begin the home search process. Taking action to correct mistakes will help increase your score. If you have high credit card balances, paying them off can also give you a quick boost.

Save money for a large down payment. This will lower your loan-to-value ratio, which means how much of the home’s price the lender has to finance. A lower LTV usually results in a lower mortgage rate. Lenders also like to see money that has been saved in an account for at least 60 days. It tells the lender that you have the money to finance the purchase of the house.

Shop around for the best rate. Don’t settle for the first interest rate a lender offers you. Check with at least three different lenders to see who is offering the lowest interest rate. Also consider the different types of lenders, such as credit unions and online lenders, in addition to traditional banks.

Also take the time to learn about the different types of loans. While the 30-year fixed-rate mortgage is the most common type of mortgage, consider a shorter-term loan such as a 15-year loan or an adjustable rate mortgage. These types of loans often have a lower rate than a conventional 30-year mortgage. Compare everyone’s costs to see which one best suits your needs and your financial situation. Government loans – such as those backed by the Federal Housing Authority, the Department of Veterans Affairs, and the Department of Agriculture – may be more affordable options for those who qualify.

Finally, lock in your rate. Locking in your rate once you find the right rate, the right loan product, and the lender will help ensure that your mortgage rate does not increase until the loan closes.

Our mortgage rate methodology

Money’s Daily Mortgage Rates show the average rate offered by over 8,000 lenders in the United States for which the most recent rates are available. Today we are posting the rates for Friday August 20, 2021. Our rates reflect what a typical borrower with a credit score of 700 can expect to pay on a home loan right now. These rates were offered to people with a 20% deposit and include reduction points.

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