The interest rate on a 30-year fixed-rate mortgage ended the week at 3.23%, just 0.002 percentage point higher than Monday’s average rate. The rate declined for the first half of the week, briefly dropping below 3.2% before ending on a two-day rise.

Rates have been hovering for more than a year near their historic lows. These low rates allow qualified borrowers to apply for a new mortgage or refinance their existing loan and take advantage of lower monthly payments.

• The last rate on a 30 year fixed rate mortgage is 3.23%.
• The last rate on a 15 year fixed rate mortgage is 2.32%.
• The latest rate on a Jumbo ARM 5/1 is 2.128%.
• The latest rate on a 7/1 compliant ARM is 4.233%.
• The latest rate on a 10/1 compliant ARM is 3.991%.

Current mortgage rates: 30-year fixed rate mortgage rates

• The 30-year rate is 3.23%.
• It’s a day infold by 0.021 percentage point. ⇑
• It’s a month offold by 0.047 percentage point. ⇓

Most borrowers will opt for a 30-year fixed rate loan because the monthly payments are predictable and the long payback period keeps them low. However, the interest rate will be higher than on a shorter term or variable rate loan, so you will pay more interest because you will be paying a higher rate for longer.

Current mortgage rates: 15 years fixed rate mortgage rates

• The 15-year rate is 2.321%.
• It’s a day infold by 0.01 percentage point. ⇑
• It’s a month offold by 0.041 percentage point. ⇓

The payback time on a 15 year fixed rate loan will be half of that over 30 years. As a result, the monthly payments will be higher on a loan of the same amount. On the other hand, the interest rate will be lower, which means that you won’t pay as much interest, which makes the 15-year loan more economical in the long run.

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

• The ARM 5/1 rate is 2.128%.
• It’s a day infold by 0.025 percentage point. ⇑
• It’s a month offold by 0.037 percentage point. ⇓

A variable rate mortgage will start with a fixed interest rate. After a number of years, this introductory rate will expire and the loan rate will be reset periodically. The monthly payments will adjust each time the rate is reset.

An ARM 5/1, for example, will have a fixed rate for five years, after which it will reset every year. While 5/1 is the most common, there are a number of ARM terms to choose from, including an ARM 7/1 and an ARM 10/1. ARMs typically have a full payback time of 30 years.

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 3.004%. ⇑
• The rate for a 30-year VA mortgage is 3.045%. ⇑
• The rate for a 30-year jumbo mortgage is 3.344%. ⇑

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 3.393%. ⇑
• The refinance rate on a 15 year fixed rate refinance is 2.456%. ⇑
• The refinancing rate on a Jumbo ARM 5/1 is 2.381%. ⇑
• The refinancing rate on a 7/1 compliant ARM is 4.558%. ⇑
• The refinancing rate on a 10/1 compliant ARM is 4.373%. ⇑

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 plans 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 possible mortgage rate

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 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 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’ve found the right rate, the right loan product, and the lender will help ensure that your mortgage rate doesn’t 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 Thursday, August 5, 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 contributing 20% ​​and include discount points.

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