Mortgage and refinance rates today, February 26, 2021

Today’s mortgage and refinance rates 

Average mortgage rates soared yesterday, rising by a greater amount than we’ve seen in a long time. Of course, they’re still very low in a historical context.

Markets often correct themselves after sharp movements such as yesterday’s. And I’m expecting that mortgage rates may fall today but probably modestly. However, during such volatile times, markets can shift direction quickly and they certainly read as jittery at the moment.

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

Current mortgage and refinance rates 

Program Mortgage Rate APR* Change
Conventional 30 year fixed 3.058% 3.061% +0.08%
Conventional 15 year fixed 2.488% 2.497% Unchanged
Conventional 20 year fixed 2.983% 2.99% +0.09%
Conventional 10 year fixed 2.567% 2.587% +0.01%
30 year fixed FHA 2.816% 3.495% +0.06%
15 year fixed FHA 2.517% 3.1% Unchanged
5 year ARM FHA 2.5% 3.213% +0.01%
30 year fixed VA 2.375% 2.547% Unchanged
15 year fixed VA 2.25% 2.571% Unchanged
5 year ARM VA 2.5% 2.392% +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?

Overnight, CNBC summed up what happened yesterday:

The yield on the U.S. 10-year Treasury note [which mortgage rates often shadow] briefly surpassed 1.6% on Thursday, its highest in over a year, fueled by expectations for higher economic growth and inflation.

We’ve been highlighting the same two factors for some time now. And they haven’t gone away.

So my personal rate lock 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

But, 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 roughly the same time yesterday, were:

  • The yield on 10-year Treasurys edged up to 1.48% from 1.45%. (Normally, bad for mortgage rates. But yesterday’s rise was reflected in yesterday’s rates and yields are now falling.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields, though less so recently
  • Major stock indexes were mixed on opening. (Neutral 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 fell to $62.54 from $63.02 a barrel. (Good for mortgage rates* because energy prices play a large role in creating inflation and also point to future economic activity.) 
  • Gold prices fell to $1,756 from $1,785 an ounce. (Bad 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 — Fell to 59 from 69 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. Because 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 dip a little or hold steady.

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 today to edge lower or remain unchanged. But, as always, that could change as the day progresses. Indeed, such intraday swings have become an irritating feature of markets. And they’re especially likely at times like this when investors are so skittish.

Nothing’s changed. And, if there is a fall in mortgage rates today, it will likely be markets correcting themselves after too sharp a rise yesterday. This is a common phenomenon after exceptional volatility.

So don’t think such a fall means the pressures that have recently been pushing those rates higher have suddenly evaporated. It seems to me highly improbable that we’ll see those falling back to record-low levels anytime soon.

Indeed, more rises seem more likely for the time being, absent some sudden and very bad economic news.

For more background on my wider thinking, read our latest weekend edition, which is published every Saturday soon after 10 a.m. (ET).

Recently

Over much of 2020, the overall trend for mortgage rates was clearly downward. And a new, weekly all-time low was set on 16 occasions last year, according to Freddie Mac.

The most recent weekly record low occurred on Jan. 7, when it stood at 2.65% for 30-year fixed-rate mortgages. But rates then rose. And Freddie’s Feb. 25 report puts that weekly average at 2.97%, up from the previous week’s 2.81%, and the highest it’s been since mid-2020.

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).

The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s and the MBA’s were updated on Feb. 18 and 19 respectively. But Freddie now publishes forecasts quarterly and its figures are from mid-January:

Forecaster Q1/21 Q2/21 Q3/21 Q4/21
Fannie Mae 2.8% 2.8% 2.9% 2.9%
Freddie Mac 2.9% 2.9% 3.0% 3.0%
MBA 2.8% 3.1% 3.3% 3.4%

However, given so many unknowables, the current crop of forecasts may be even more speculative than usual. And there’s certainly a widening spread as the year progresses.

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.

Source: themortgagereports.com

Mortgage Rates Today, Feb. 13 & Rate Forecast For Next Week – The Mortgage Reports

Today’s mortgage and refinance rates 

Average mortgage rates edged higher yesterday. There have been a lot of small, daily ups and downs recently. But they’ve generally canceled each other out. And Freddie Mac’s weekly averages haven’t moved at all over the last three reports.

Of course, there’s always a chance that rates will rise or fall suddenly and sharply. But it’s hard to spot a reason why they should this week. And that means the danger of continuing to float your rate may be lower than normal. But it also means the potential rewards of doing so may be lower, too.

Monday is Presidents’ Day. And US markets are closed. So our daily report will be back on Tuesday.

Find and lock a low rate (Feb 20th, 2021)

Program Mortgage Rate APR* Change
Conventional 30 year fixed 2.79% 2.793% +0.01%
Conventional 15 year fixed 2.363% 2.372% Unchanged
Conventional 20 year fixed 2.825% 2.832% +0.08%
Conventional 10 year fixed 2.321% 2.378% Unchanged
30 year fixed FHA 2.517% 3.187% +0.01%
15 year fixed FHA 2.385% 2.965% +0.07%
5 year ARM FHA 2.5% 3.207% Unchanged
30 year fixed VA 2.093% 2.263% +0.01%
15 year fixed VA 1.88% 2.198% Unchanged
5 year ARM VA 2.5% 2.386% 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.

Find and lock a low rate (Feb 20th, 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?

If I were currently floating my rate, I probably would lock it today or soon. That’s for two reasons. First, the possibility of a sudden, sharp rise never goes away, though it currently looks unlikely.

And, secondly, the chances of my gaining much from continuing to float look too low to make the gamble worthwhile. Of course, the possibility of a sudden fall is always there. But it’s roughly as improbable as a sudden rise.

So my recommendation is to lock if you’re closing within 30 days of closing.

  • 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

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.

Compare top lenders

What’s moving current mortgage rates

We’ve already established that nothing much is moving current mortgage rates. They’re barely moving at all.

Of course, they’ll set off decisively one day. But precisely when is impossible to predict. Indeed, even the direction they’ll take is uncertain.

Risk of big falls

Yesterday, the S&P 500 and Nasdaq stock indexes closed at record highs. It’s been clear for a long time that the stock market generally has become increasingly divorced from economic reality.

Of course, those who make these markets would claim that they’re looking ahead to a rosy future in the medium or long term. But they have lousy records as soothsayers. And markets’ current highs are based on “confidence,” which is code for faith-based trading.

Stock market overvalued?

Also yesterday, the Federal Reserve Board revealed the “hypothetical scenarios for its 2021 bank stress tests.” And they included “asset prices dropping sharply, including a 55 percent decline in equity prices.”

Now, obviously, the Fed isn’t predicting a 55% slump in stock prices. But it takes the possibility of a significant fall seriously enough to make banks prove they could survive such an event.

And any such fall would likely drag down mortgage rates. Those who got out of the stock market would need to put their remaining money somewhere. And they’d want to buy safe or safer assets, including US Treasury bonds and mortgage-backed securities. Such extra demand would push up prices, which — as a mathematical certainty — would drive down yields and mortgage rates.

And those lower rates aren’t dependent on a stock market slump. They tend to go hand-in-hand with economic distress, which is why they’re so low at the moment. So any worsening of the economy could produce lower mortgage rates, even if the stock market continues to defy gravity.

Risk of big rises

Most economists think the economy will improve as the vaccination drive gains traction and the pandemic recedes. And that should bring higher mortgage rates. That’s probably the most likely scenario at the moment.

However, it could be months before a firm upward trend emerges. And, even then, it may be a gradual one. But, inevitably, there’s a possibility of it not happening at all.

For example, COVID-19 already has several mutations. And, were a future one to prove resistant to vaccines, that could undermine or slow the economic recovery, something that would likely bring lower mortgage rates.

All the above is a roundabout way of saying that there’s even less certainty about the future than normal. And we may one day look back on this period, when mortgage rates are becalmed, with fond nostalgia.

Economic reports next week

The big economic report next week is Wednesday’s retail sales. The others would have to be stunningly good or bad to move mortgage rates far.

Here are next week’s main economic reports:

  • Wednesday — January retail sales, plus industrial production and capacity utilization. Also January producer price index, a predictor of inflation
  • Thursday — Weekly new claims for unemployment insurance. Plus January housing starts and housing permits
  • Friday — January existing home sales

More important than these economic reports is likely to be any legislative progress or setbacks encountered by the administration’s $1.9 trillion pandemic relief package, currently making its way through Congress. Successes may mean higher rates while failures lower ones.

Find and lock a low rate (Feb 20th, 2021)

Mortgage interest rates forecast for next week

Just as over the last couple of weeks, there’s little reason to expect sharp changes in mortgage rates this week. They’ll probably continue to move up and down just a little, going nowhere fast.

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.

Your part

But you play a big part in determining your own mortgage rate in five ways. You can affect it significantly by:

  1. Shopping around for your best mortgage rate — They vary widely from lender to lender
  2. Boosting your credit score — Even a small bump can make a big difference to your rate and payments
  3. Saving the biggest down payment you can — Lenders like you to have real skin in this game
  4. Keeping your other borrowing modest — The lower your other monthly commitments, the bigger the mortgage you can afford
  5. 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:

Down payment assistance programs in every state for 2020

Compare top lenders

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.

Source: themortgagereports.com

How low can we go? 30-year mortgage rate charts tell the story

30-year mortgage rates chart: Where are rates now?

If you look at a 30-year mortgage rate chart, there’s a trend you
can’t miss: Today’s
rates are low.
Really low.

But remember, these are just averages. Your mortgage rate might be higher or lower than the ‘typical’ borrower.

Check your mortgage rates today (Jan 30th, 2021)


In this article (Skip to…)


Mortgage rate trends chart: Where are rates
headed?

The coronavirus pandemic pushed mortgage rates to rock
bottom, and most experts think they can’t go down much further.

If anything, mortgage rates are likely to go up in the
coming months and years, as COVID recovery progresses and the economy begins to
improve.

Borrowers shouldn’t expect dramatic rate spikes.

But unlike 2020, when mortgage rates hit record lows over and over, we’re likely to see more upward movement for 30-year mortgage rates and other home financing rates. 

Those who are ready to buy a home or refinance now
shouldn’t wait on rates to fall; it’s not likely to happen.

But if your home buying or refinancing plans are further
down the road, you shouldn’t worry about any huge rate increases in the near
future. Affordable financing is here for the long haul.

Verify your new rate (Jan 30th, 2021)

Average 30-year mortgage rates since 1972

For some perspective on today’s mortgage interest rates,
here’s how 30-year rates have changed from year to year over the past four
decades.

Year Average 30-Year Rate Year Average 30-Year Rate Year Average 30-Year Rate
1972 7.38% 1988 10.34% 2004 5.84%
1973 8.04% 1989 10.32% 2005 5.87%
1974 9.19% 1990 10.13% 2006 6.41%
1975 9.05% 1991 9.25% 2007 6.34%
1976 8.87% 1992 8.39% 2008 6.03%
1977 8.85% 1993 7.31% 2009 5.04%
1978 9.64% 1994 8.38% 2010 4.69%
1979 11.20% 1995 7.93% 2011 4.45%
1980 13.74% 1996 7.81% 2012 3.66%
1981 16.63% 1997 7.60% 2013 3.98%
1982 16.04% 1998 6.94% 2014 4.17%
1983 13.24% 1999 7.44% 2015 3.85%
1984 13.88% 2000 8.05% 2016 3.65%
1985 12.43% 2001 6.97% 2017 3.99%
1986 10.19% 2002 6.54% 2018 4.54%
1987 10.21% 2003 5.83% 2019 3.94%

Can 30-year mortgage rates go lower?

The short answer is that
mortgage rates can always go lower. But you shouldn’t expect them to.

Mortgage rates operate in
their own market. Lenders have control over the rates they set, and many are
content to keep rates (and profit margins) a little higher.

This helps stem the tide of
home buyers and refinancers and keep their workload manageable.

In addition, mortgage rates
have to answer to end investors.

When rates fall too rapidly, investors start paying less for mortgage-backed securities (MBS) — the financial instruments that drive mortgage rates.

This is because investors assume homeowners will refinance, paying off their loans faster and reducing the returns on interest.

Less money from investors,
in turn, means lenders have to keep their rates a little higher, or charge
borrowers bigger fees for lower rates.

So don’t expect mortgage
rates to keep falling in lock-step with the rest of the market.

They could push lower, but
they’re just as likely to stay stagnant. And sooner or later, they’re bound to
rise again.

Verify your new rate (Jan 30th, 2021)

Historical perspective: Banner years for mortgage interest rates

The long-term average for mortgage rates is about 8%. That’s according to Freddie Mac records going back to 1971.

But mortgage rates can move
a lot from year to year — even from day to day. And some years have seen much
bigger moves than others.

Here’s a look at just a
few, to show how rates often buck conventional wisdom and move in unexpected
ways.

1981 — The all-time high

1981 was the worst year for mortgage interest rates on
record.

How bad is bad? The average
mortgage rate in 1981 was 16.63%.

  • At 16.63% a $200,000
    mortgage has a monthly cost for principal and interest of $2,800
  • Compared with the long-time
    average that’s an extra monthly cost of $1,300 or $15,900 per year

And that’s just the average – some people paid more.

For the week of Oct. 9, 1981, mortgage rates averaged 18.63%, the highest weekly rate on record, and almost five times the 2019 annual rate.

2008 — The slump

2008 was the final gasp of the mortgage meltdown.

Real estate financing was
available in 2008 for 6.03% according to Freddie Mac.

  • The monthly cost for a
    $200,000 mortgage was about $1,200 per month, not including taxes and insurance

Post 2008, rates declined
steadily.

2016 —An all-time low

2016 held the lowest annual
mortgage rate on record going back to 1971. Freddie Mac says the typical 2016
mortgage was priced at just 3.65%.

  • A $200,000 mortgage at
    3.65% has a monthly cost for principal and interest of $915
  • That’s $553 a month less
    than the long-term average

Mortgage rates had dropped lower in 2012, when one week in November
averaged 3.31%. But some of 2012 was higher, and the entire year averaged out
at 3.66% for a 30-year mortgage.

2019 — The surprise drop-off

In 2018, many economists
predicted that 2019 mortgage rates would top 5.5%. That turned out to be wrong.

In fact, rates dropped in 2019. The
average mortgage rate went from 4.54% in 2018 to 3.94% in 2019.

  • At 3.94% the monthly cost for a $200,000 home loan was $948
  • That’s a savings of $520 a month – or $6,240 a year – when
    compared with the 8% long-term average

In 2019, it was thought
mortgage rates couldn’t go much lower. But 2020 proved that thinking wrong
again.

2021 — The lowest 30-year mortgage rates ever

Rates plummeted in 2020 in response
to the coronavirus pandemic. 

By July 2020, the 30-year fixed rate fell below 3% for the first time — and it kept falling to a new record low (in January 2021) of 2.65% for a 30-year fixed-rate mortgage. 

  • At 2.65% the monthly cost for a $200,000 home loan is $806 a month not counting taxes and insurance
  • You’d save $662 a month, or $7,900 a year — compared to the 8% long-term average

Due to the Federal Reserve’s promise of low interest rates post-COVID, mortgage rates are expected to stay low for years.

But as we’ve seen in the past, predictions about mortgage
rates are often wrong.

That’s why when rates are good, experts recommend locking one in instead of waiting for potentially lower rates in weeks or months.  

Factors that affect your mortgage
interest rate

For the
average homebuyer, tracking mortgage rates helps reveal trends. But not every
borrower will benefit equally from today’s low mortgage rates.

Home
loans are personalized to the borrower. Your credit score, down payment, loan
type, loan term, and loan amount will affect your mortgage or refinance rate.

It’s
also possible to negotiate mortgage rates. Discount points can provide a lower
interest rate in exchange for paying cash upfront.

Let’s
look at some of these factors individually:

Credit
Score

A credit
score above 620 will open more doors for lower interest rate loans, though some
loan programs such as USDA, FHA, and VA loans can be available to sub-600
borrowers. 

If
possible, give yourself a few months or even a year to improve your credit
score before borrowing. You could save thousands of dollars through the life of
the loan. 

Down
Payment

Higher
down payments can shave your borrowing rate.

Most
mortgages, including FHA loans, require at least 3% or 3.5% down. And VA
loans and USDA loans are available with 0% down payment.

But if
you can put 10%, 15%, or even 20% down, you might qualify for a conventional
loan with low or no mortgage insurance and seriously reduce your housing costs.

Loan
Type

The type
of mortgage loan you use will affect you interest rate. However, your loan type
hinges on your credit score. So these two factors are very intertwined.

For
example, with a credit score of 580 you may qualify only for a subsidized loan
such as an FHA mortgage. FHA loans have low interest rates, but come with
mortgage insurance no matter how much money you put down.

A credit
score of 620 or higher might qualify you for a conventional loan, and —
depending on your down payment and other factors — potentially a lower rate.  

Adjustable-rate mortgages traditionally offer lower introductory interest rates compared to a 30-year fixed-rate mortgage. However, those rates are subject to change after the initial fixed-rate period.

So an
initially lower ARM rate could rise substantially after 5, 7, or 10 years.

Loan
Term

In this
post we’ve tracked rates for 30-year fixed-rate mortgages, but 15-year
fixed-rate mortgages tend to have even lower borrowing rates. 

With a
15-year mortgage, you’d have a higher monthly payment because of the shorter
loan term. But throughout the life of the loan you’d save a lot in interest
charges.

At a 3% interest
rate for a $200,000 home loan, you’d pay $103,000 in interest charges with a
30-year mortgage paid off on schedule. A 15-year fixed-rate mortgage would cost
only about $49,000 in interest.

Loan
Amount

Rates on
unusually small mortgages — a $50,000 home loan, for example — tend to be
higher than average rates because these loans are less profitable to the lender.

Rates on
a jumbo mortgage loan tend to be higher, too, because lenders have a higher
risk of loss. Jumbo loans help shoppers buy high-value real estate.

Discount
Points 

A
discount point can lower interest rates by 0.25% in exchange for upfront cash.
A discount point costs 1% of the home loan amount. 

For a
$200,000 loan, a discount point would cost $2,000 upfront. However, the
borrower would recoup the upfront cost over time thanks to the savings earned
by a lower interest rate.

Since
interest payments play out over time, a buyer who plans to sell the home or
refinance within a couple years should probably skip the discount points and
pay a higher interest rate for a while.

Some rate quotes assume the home buyer will buy discount points, so be sure to check before closing on the loan.

Understanding your monthly
mortgage payment

In this
article, we compare monthly payments for a $200,000 home loan at a variety of
interest rates.

Understand
that these examples show only principal and interest — the amount you’re paying
each month toward your loan balance and interest generated.

Overall, your monthly mortgage
payment will be higher than just principal and interest. That’s because there
are other costs bundled in, including:

  • Property taxes —City and county governments levy annual property taxes to pay for public services. These taxes are usually prorated over 12 months and paid to your loan servicer along with your mortgage payment
  • Homeowners insurance — Homeowners insurance premiums average about $1,000 a year. As with property taxes, homeowners insurance premiums can be spread out over 12 months and paid with your mortgage via an escrow account
  • HOA fees — Condos, apartments, and gated communities may charge annual Homeowners Association fees which can be broken down into monthly payments added to the mortgage
  • Mortgage insurance — FHA loans, USDA loans, and conventional loans with less than 20% down payment require the borrower to pay for mortgage insurance. Mortgage insurance costs around 1% of the loan amount each year, although rates vary depending on the loan type and down payment. For a $200,000 loan that would equal $2,000 a year or $166 per month added to the mortgage payment

Collectively,
it’s not unusual for taxes, fees, and premiums to add several hundred dollars
to a monthly mortgage payment.

Closing costs affect the cost
of borrowing, too

Interest
rates have a huge impact on borrowing costs throughout the life of a mortgage
loan, but it’s important not to forget the cost of upfront fees, too.

Closing costs typically add anywhere from 2% to 5% of your loan amount. Closing costs include loan origination fees, discount points, legal fees, appraisal fees, title fees, and more.

Many
first time home buyers don’t know they can negotiate some closing costs such as
the lender’s origination fee. However, many costs are pre-set by third parties
such as attorneys and appraisers.

In some
mortgage markets the home seller will help with closing costs. But it’s up to
the buyer to negotiate this part of the transaction. A Realtor can help.

When
choosing a mortgage, home buyers and refinancers should always consider closing
costs along with interest rates.   

Determine your buying power with
a mortgage calculator

The
charts and graphs on this page show the way 30-year fixed-rate mortgages have
changed over time and continue to change.

To see how today’s mortgage rates affect your borrowing power, use our mortgage calculator that includes PMI and other added costs.

Today’s
historically low interest rates have increased buying power by lowering monthly
payments for borrowers throughout the spectrum.

When to lock your mortgage rate

Keep an eye on daily rate
changes. But if you get a good mortgage rate quote today, don’t hesitate to
lock it in.

Remember, if you can secure
a 30-year mortgage rate below
3% or 4%, you’re paying less than half as much as most American
homebuyers in recent history. That’s not a bad deal.

Verify your new rate (Jan 30th, 2021)

Compare top lenders

Source: themortgagereports.com

How mortgage rates move when the Federal Reserve meets

Expect continued low rates in 2021

The Federal Reserve doesn’t control mortgage rates. But it’s had an outsized impact on them during the coronavirus pandemic.

The Fed has bought billions of dollars worth of consumer mortgages over the past year in a bid to keep rates low during COVID.

And it worked — mortgage rates have hit record lows 16 times since March 2020.

The Fed is set to continue this mortgage bond-buying program in 2021, along with its current low-interest-rate policy.

That means borrowers should expect to see low home buying and refinance rates throughout the year.

Check your mortgage rates today (Jan 28th, 2021)


In this article (Skip to…)


What happens at Federal Reserve meetings?

The Federal Open Market Committee (FOMC) typically meets every six weeks to discuss interest rate policy.

The FOMC is a rotating, 12-person sub-committee within the Federal Reserve, headed by Federal Reserve Chairman Jerome Powell.

The FOMC meets eight times annually on a pre-determined schedule, and on an emergency basis, when needed, as was required between 2008-2011 when the U.S. economy was staving off depression; and in 2013 when the U.S. government failed to raise its debt limit.

The FOMC’s most well-known role worldwide is as keeper of the federal funds rate. But how exactly does the fed funds rate impact your wallet?

The Federal Reserve does not control mortgage rates — usually

It’s a common belief that the Federal Reserve “makes” consumer mortgage rates. In fact, it doesn’t. Mortgage rates are made on Wall Street.

Here’s proof: Over the last two decades, the fed funds rate and the average 30-year fixed mortgage rate have differed by more than 5%, and by as little as 0.50%.

If the fed funds rate were truly linked to U.S. mortgage rates, the difference between the two rates would be linear or logarithmic — not jagged.

That said, the Fed does exert an influence on today’s mortgage rates.

After its scheduled meetings, the FOMC issues a press release to the public which highlights the group’s economic opinions and consensus.

When the FOMC’s post-meeting press release is generally “positive” on the U.S. economy, mortgage rates tend to rise. Conversely, when the Fed is generally negative with its outlook, mortgage rates tend to fall.

Economic news has been overwhelmingly negative this year due to COVID.

As a result, interest rates — including mortgage rates — have steadily declined.

Check your mortgage rates (Jan 28th, 2021)

How the Fed has impacted mortgage rate lately

Normally, the Fed’s impact on mortgage rates is indirect at best (as we’ll describe in more detail below).

But the Federal Reserve does have one avenue to directly impact mortgage rates.

That’s through “quantitative easing” (QE).

QE happens when the Fed injects money into the U.S. economy in order to keep rates low — and by extension, keep consumers borrowing money and dollars circulating.

Just look at what the Fed did in the early stages of the COVID-19 pandemic. Since March 2020, it’s bought billions of dollars worth of consumer mortgages on the secondary marketplace.

More capital in the secondary marketplace means lower rates for borrowers. Thanks to the Fed’s cash injection, mortgage rates hit — and stayed at — record lows for going on nine months.

The normal refrain you’ll hear from mortgage professionals — “the Fed doesn’t control mortgage rates” — is still true. Rates are still not directly tied to the Fed Funds rate.

But that statement now comes with a big asterisk, as it’s become clear what a big impact the Federal Reserve can have on interest rates when need be.

Check your mortgage rates. Start here (Jan 28th, 2021)

What does it mean when the Federal Reserve cuts interest rates?

The fed funds rate is the prescribed rate at which banks lend money to each other on an overnight basis.

When the fed funds rate is low, the Fed is attempting to promote economic growth. This is because the fed funds fate is correlated to Prime Rate, which is the basis of most bank lending including many business loans and consumer credit cards.

For the Federal Reserve, manipulating the fed funds rate is one way to manage its dual-charter of fostering maximum employment and maintaining stable prices.

Federal Funds Rate vs. Consumer Price Inflation, 1970-2018

Federal funds rate and Consumer Price Inflation, 1970-2018. Source: St. Louis Fed

However, a low fed funds rate creates wage pressure and promotes risk-taking, both of which can quickly lead to inflation (i.e. rising prices).

For this reason, the Federal Reserve ended its zero-interest rate policy in December 2015, raising rates by 25 basis points (0.25%) for the first time in more than a decade.

However, the Fed move did not lead to an increase in consumer mortgage rates. On the contrary, mortgage rates dropped more than 50 basis points (0.50%) after the Fed’s late-2015 move.

This is because U.S. mortgage rates aren’t set or established by the Federal Reserve or any of its members. Rather, mortgage rates are determined by the price of mortgage-backed securities (MBS), a security sold via Wall Street.

The Federal Reserve can affect today’s mortgage rates, but it cannot set them.

Verify your home buying eligibility (Jan 28th, 2021)

How Fed statements can impact mortgage rates

The Fed does more than just set the fed funds rate. It also gives economic guidance to markets.

For rate shoppers, one of the key messages for which to listen is the one the Fed spreads on inflation. Inflation is the enemy of mortgage bonds and, in general, when inflation pressures are growing, mortgage rates are rising.

The link between inflation rates and mortgage rates is direct, as homeowners in the early-1980s experienced.

The Fed doesn’t control mortgage rates, but the link between inflation and mortgage rates is direct.

High inflation rates at the time led to the highest mortgage rates ever. 30-year mortgage rates went for over 17 percent (as an entire generation of borrowers will remind you), and 15-year loans weren’t much better.

Inflation is an economic term describing the loss of purchasing power. When inflation is present within an economy, more of the same currency is required to purchase the same number of goods.

We experience inflation at the grocery store.

A gallon of milk used to cost $2. Today, it costs $3. More money is required to purchase the same amount of milk because each dollar holds less value.

Meanwhile, mortgage rates are based on the price of mortgage-backed securities (MBS) and mortgage-backed securities are U.S. dollar-denominated. This means that a devaluation in the U.S. dollar will result in the devaluation of U.S. mortgage-backed securities as well.

When inflation is present in the economy, then, the value of a mortgage bond drops, which leads to higher mortgage rates.

This is why the Fed’s comments on inflation are closely watched by Wall Street. The more inflationary pressures the Fed fingers in the economy, the more likely it is that mortgage rates will rise.

Lock in rates before today’s Fed announcement (Jan 28th, 2021)

Federal Reserve FAQ

What is the Federal Reserve? 

The Federal Reserve is the central bank of the U.S. It’s an independent body (not controlled by the government) tasked with managing the country’s currency and monetary policy, and keeping the economy stable. In more relatable terms, the Federal Reserve influences things like the interest rates you pay on a credit card or business loan. The Fed also has influence over the prices you pay for everyday goods and services, since it helps manage inflation.

What does the Federal Reserve do? 

In broad strokes, the Fed’s job is to keep American economic growth stable. It does this by managing U.S. currency, setting interest rates for lending, and keeping inflation in check through a variety of monetary policies. Overall, the Fed tries to keep inflation and interest low enough that consumer businesses and spending stay strong — but high enough that the economy doesn’t stagnate.

Why was the Federal Reserve created?

The Federal Reserve was created in 1913, with the signing of the Federal Reserve Act. In the Federal Reserve’s own words, it was created to “provide the nation with a safer, more flexible, and more stable monetary and financial system.” Put differently, the Fed uses its influence over monetary policy and banks to help ensure the economy doesn’t grow or shrink too quickly. The goal is to keep prices stable enough that consumers can afford to spend and borrow, and businesses can stay afloat and provide steady employment.

Why does the Fed raise interest rates?

Periodically, the Fed raises interest rates. More specifically, it raises the federal funds rate, which in turn impacts borrowers’ interest rates on things like credit cards and home equity loans, and, more indirectly, fixed-rate home loans. So why does the Fed raise interest rates at all? Because it helps keep inflation in check. When rates are too low, cheap borrowing can overheat an economy. Prices rise as demand for goods and services goes up. But the Fed can counteract inflation by increasing rates, thereby curbing consumption. Conversely, the Fed can fight deflation by lowering interest rates. Cheap money spurs spending and demand for goods, helping to increase prices in an economy.

What is the fed funds rate?

The federal funds rate or “fed funds rate” is the interest rate banks charge to lend money to one another overnight. Why should you care what rate banks are charging each other? Because the fed funds rate impacts consumer borrowing, too. Take the fed funds rate, add 3% to it, and you generally get the “prime rate” — which is the basis for setting rates on consumer credit lines like auto loans, credit cards, and home equity loans. Not all interest rates are in lock-step with the fed funds rate (mortgage rates are not, for example), but they are all influenced by it. 

Who controls the federal reserve

Importantly, no branch of government controls the Federal Reserve. It’s an independent body made up of a Board of Governors and 12 Federal Reserve Banks across the country. The seven board members, as well as a rotating cast of Federal Reserve Bank presidents, make up the FOMC (Federal Reserve Open Market Committee) — the Fed’s governing body. The FOMC meets every 8 weeks to evaluate interest rate policy.

What are today’s mortgage rates?

The Federal Reserve adjourns from its scheduled meeting on Wednesday afternoon.

Current mortgage pricing isn’t predicted to change, but there are no guarantees when it comes to interest rates.

Take a look at today’s real mortgage rates now. Mortgage quotes are readily available and you can start in minutes.

Verify your new rate (Jan 28th, 2021)

Compare top lenders

Source: themortgagereports.com

Mortgage and refinance rates today, January 22, 2021

Today’s mortgage and refinance rates 

Average mortgage rates inched lower yesterday. The fall was the smallest that can be measured. But was welcome nonetheless.

First thing this morning, key markets are looking quiet again. And we may see a replay of the last few days. If so, mortgage rates today may nudge lower or hold steady.

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

Current mortgage and refinance rates 

Program Mortgage Rate APR* Change
Conventional 30 year fixed 2.745% 2.745% Unchanged
Conventional 15 year fixed 2.362% 2.362% Unchanged
Conventional 5 year ARM 3% 2.743% Unchanged
30 year fixed FHA 2.495% 3.473% Unchanged
15 year fixed FHA 2.438% 3.38% Unchanged
5 year ARM FHA 2.5% 3.226% Unchanged
30 year fixed VA 2.3% 2.472% -0.01%
15 year fixed VA 2.313% 2.635% Unchanged
5 year ARM VA 2.5% 2.406% 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.

Find and lock a low rate (Jan 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?

Recent consistent falls are matched by the consistent rises that immediately preceded them. And it’s much too soon to draw conclusions about the overall direction of mortgage rates.

Things would have to go seriously wrong with the pandemic and vaccine rollout for these rates not to start to rise later in the year, once the economy starts to recover. But that could be several months away.

In the meantime, there are no reliable guides as to where these rates will head. So I’d advise caution. And, for now, my personal rate lock recommendations, which are little better than 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.

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 yesterday morning, were:

  • The yield on 10-year Treasurys edged down to 1.09% from 1.11%. (Good 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 lower on opening. (Good 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 moved down to $51.99 from $53.07 a barrel. (Good for mortgage rates* because energy prices play a large role in creating inflation and also point to future economic activity.) 
  • Gold prices fell to $1,839 from $1,865 an ounce. (Bad 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 — Fell to 67 from 70 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 move a little lower.

Find and lock a low rate (Jan 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 nudge lower today. But, as always, that could change as the day progresses.

It’s highly likely that federal spending on pandemic relief and other measures will try to push these rates higher. This morning’s Financial Times suggested about the Biden administration’s proposals, ” … the trillions of dollars of stimulus packages will surely result in inflation.” And that’s a sure sign of higher rates.

But that upward pressure is being counteracted by the economic damage the pandemic is wreaking. Poorly performing economies walk hand-in-hand with lower rates as surely as inflation leads to higher ones.

Unfortunately, there’s currently no way to predict which of these conflicting forces will win. True, it’s likely we’ll see higher rates once the pandemic fades. But we have still no idea when that will be. Believe us, we can’t wait to get back to being able to make more confident forecasts.

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, when it stood at 2.65% for 30-year fixed-rate mortgages. But rates are now some way above the all-time low. In Freddie’s Jan 21 report, that weekly average was 2.77%.

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 Jan. 20. 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% 3.1% 3.3% 3.4%

But, given so many unknowables, the current crop of forecasts may be even more speculative than usual. And there’s certainly a widening spread as the year progresses.

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 (Jan 26th, 2021)

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.

Source: themortgagereports.com

Mortgage and refinance rates today, January 20, 2021

Today’s mortgage and refinance rates 

Average mortgage rates were unchanged yesterday, as expected. So they remain exceptionally low, though a bit above the record.

There may be literal fireworks over the White House this evening but, so far this morning, metaphorical ones in markets look unlikely. Unless things move on, mortgage rates today may again end up unchanged or barely changed.

Find and lock a low rate (Jan 25th, 2021)

Current mortgage and refinance rates 

Program Mortgage Rate APR* Change
Conventional 30 year fixed 2.745% 2.745% Unchanged
Conventional 15 year fixed 2.313% 2.313% Unchanged
Conventional 5 year ARM 3% 2.743% Unchanged
30 year fixed FHA 2.438% 3.415% Unchanged
15 year fixed FHA 2.438% 3.38% Unchanged
5 year ARM FHA 2.5% 3.226% Unchanged
30 year fixed VA 2.308% 2.479% Unchanged
15 year fixed VA 2.125% 2.445% -0.13%
5 year ARM VA 2.5% 2.406% 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.

Find and lock a low rate (Jan 25th, 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?

The direction mortgage rates will take when they begin moving again remains unclear. So, regretfully, our advice must be less helpful than it normally is.

Read on for more details. But, for now, my personal rate lock recommendations, which are little better than 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.

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 yesterday morning, were:

  • The yield on 10-year Treasurys held steady at 1.11%. (Neutral 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 moved up to $53.64 from $52.83 a barrel. (Bad for mortgage rates* because energy prices play a large role in creating inflation and also point to future economic activity.) 
  • Gold prices rose to $1,863 from $1,836 an ounce. (Good 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 — Increased to 66 from 61 out of 100. Bad 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 (Jan 25th, 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 day progresses.

Two forces are acting on mortgage rates at the moment. And each wants to move them in the opposite direction.

The first is the pandemic — or, rather, the economic harm it’s doing. That’s trying to drag those rates lower.

The second is the incoming administration’s spending plans. They’re likely to create demand for additional government borrowing. And that should push up yields on US Treasury bonds — and rates on mortgages.

Yesterday, those forces were in balance. And it’s possible they’ll remain so for a while. But they’re more likely to move up and down as each force gains and loses prominence in investors’ minds. And either might eventually come to dominate.

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 (Jan 25th, 2021)

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.

Source: themortgagereports.com

Mortgage and refinance rates today, January 21, 2021

Today’s mortgage and refinance rates 

Average mortgage rates edged lower yesterday. It was a small drop but it inches them further toward the all-time low, though there’s still a way to go.

Key markets this morning are relatively quiet. And it’s looking as if mortgage rates today may again be unchanged or barely changed.

Find and lock a low rate (Jan 22nd, 2021)

Current mortgage and refinance rates 

Program Mortgage Rate APR* Change
Conventional 30 year fixed 2.75% 2.75% Unchanged
Conventional 15 year fixed 2.362% 2.362% +0.05%
Conventional 5 year ARM 3% 2.743% Unchanged
30 year fixed FHA 2.495% 3.473% +0.06%
15 year fixed FHA 2.438% 3.38% Unchanged
5 year ARM FHA 2.5% 3.226% Unchanged
30 year fixed VA 2.313% 2.485% +0.01%
15 year fixed VA 2.313% 2.635% +0.19%
5 year ARM VA 2.5% 2.406% 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.

Find and lock a low rate (Jan 22nd, 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?

It’s been more than a week since mortgage rates last rose. But, before that run, it had been a week since they fell. If that sounds as if those rates are in a state of flux, that’s because they are.

The mortgage market is littered with Rumsfeldian known unknowns and unknown unknowns. And, right now, nobody can get a grip on the short-term direction of travel.

Further ahead, it’s highly likely that they’ll rise. Eventually, the economy should improve significantly as vaccination programs take effect — assuming no resistant virus strains emerge. And higher government borrowing is also probable. Both those should soon push these rates higher.

But how soon is soon? March? The third quarter? That’s unknowable. So I’m leaning toward caution.

And, for now, my personal rate lock recommendations, which are little better than 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.

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 yesterday morning, were:

  • The yield on 10-year Treasurys held steady again at 1.11%. (Neutral 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 mixed and mostly barely moving on opening. (Neutral 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 moved down to $53.07 from $53.64 a barrel. (Good for mortgage rates* because energy prices play a large role in creating inflation and also point to future economic activity.) 
  • Gold prices edged up to $1,865 from $1,863 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 — Rose to 70 from 66 out of 100. Bad 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 (Jan 22nd, 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

Once again, I’m expecting mortgage rates to hardly move today. But, as always, that could change as the day progresses.

This morning’s new weekly claims for unemployment insurance weren’t quite as bad as last week’s. But, at 900,000, they’re still pretty terrible. And you’d normally expect mortgage rates to fall on the news.

However, investors are currently very aware of the extra government spending (and borrowing) that the Biden administration is proposing. And that’s so far putting a brake on appreciable falls. Indeed, at some point soon, it may well cause some rises.

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, when it stood at 2.65% for 30-year fixed-rate mortgages. But rates are now some way above the all-time low. In Freddie’s Jan 21 report, that average was 2.77%.

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 Jan. 20. 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% 3.1% 3.3% 3.4%

But, given so many unknowables, the current crop of forecasts may be even more speculative than usual. And there’s certainly a widening spread as the year progresses.

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 (Jan 22nd, 2021)

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.

Source: themortgagereports.com

Why are mortgage rates going up? Biden, vaccines, and interest rates

Mortgage rates are on the rise

The start of the year saw another drop in mortgage rates, with the average 30-year fixed rate falling to 2.65% — its lowest low ever, according to Freddie Mac.

But then interest rates reversed.

The average 30-year mortgage rate spiked to 2.79% on January 14, per Freddie Mac’s survey. Other sources reported averages as high as 2.88% on the same day.

Experts predict rates will keep on climbing in 2021.

The change should be modest — with 30-year rates in the mid-3% range, at worst — but the heyday of new record lows every week could be ending.

Check your mortgage rates today (Jan 21st, 2021)

Just how much did mortgage rates rise?

There’s no question mortgage interest rates are ticking up. But how much they’ve increased depends on who you ask.

Freddie Mac, the industry’s go-to for current mortgage rates, reports a relatively modest spike of 0.14%. It also showed rates pushing downward until last week.

But other sources paint a different picture.

Mortgage News Daily, for one, was already reporting 30-year rates at 2.86% on the same day Freddie listed its lowest-low of 2.65%.

So which source is right? Both of them are, in a way.

Differences in rate reporting are common due to companies’ different survey practices. They can also vary based on whether the source looks at purchase or refinance mortgages.

Remember that in the third quarter of 2020, the Federal Housing Finance Agency (FHFA) instituted an Adverse Market Refinance Fee of $500 per $100,000 borrowed — which has led to higher rates on most refinance loans.

The other thing to keep in mind is that rates in the news are averages. That means borrowers with good credentials can often still get lower rates than what’s shown.

So even though interest rates have ticked up, the ultra-lows of the last few weeks aren’t completely gone.

Check your mortgage rates (Jan 21st, 2021)

Why are mortgage rates going up? 

The short answer is that mortgage rates are going up because the economy is starting to have a more positive outlook on post-COVID recovery.

Coronavirus has been the major force keeping rates low over the past year. The closer we get to widespread vaccination — and the better our economic outlook as a result — the higher rates will go.

Although the U.S. is still at a critical stage with the virus, and far from tangible recovery, we’re finally starting to see a path forward.

This is largely due to Biden’s win, as well as the Georgia runoff election in which Democrats Raphael Warnock and Jon Ossoff won Senate seats. 

The impact of Biden and Senate Democrat wins

Current mortgage rate movements are due partly to the fluidity of the political and economic situation in the U.S., as the country prepares for a transition from the Trump administration to the Biden White House on January 20.

President-Elect Joe Biden has signaled that he wants to implement a $1.9 trillion stimulus plan to jumpstart the economy, and the Democratic wins in Georgia give him a Senate majority that will likely aid his efforts. 

Although Biden’s proposed stimulus plan has drawn criticism that relief checks of even $2,000 are unlikely to do much for the economy, the aim of the plan is to ease the country’s economic burden and spur spending and growth.

Economic growth would likely raise mortgage rates as different sectors rebound.

Mortgage Professional America Magazine also reported that stimulus spending could increase inflation, which would drive up mortgage rates as well. 

Keeping an eye on the 10-Year Treasury

Eli Sklar, senior loan consultant with loanDepot, pointed to the Ten-Year Treasury as an indicator of an improving economy and a signal that rates will rise in the coming year. 

“The Ten-Year Treasury’s price, which is a big indicator of mortgage rates, is inversely related to how the market is doing. As the market continues to do well, the Ten-Year Treasury’s value goes down because the Ten-Year Treasury is known as the safest investment,” Sklar said. 

A spike in investor interest in the Ten-Year Treasury as the economy cratered last year, combined with the Federal Reserve’s commitment to keep interest rates low, drove down mortgage rates.

But, Sklar said, as the economy recovers and people regain confidence in other types of investments, the Ten-Year Treasury will decline and mortgage rates will rise once again. 

Verify your new rate (Jan 21st, 2021)

How high will mortgage rates go in 2021?

Mortgage rates could continue to rise this year, particularly if the newly elected President Biden is able to enact a relief package that includes direct payments to taxpayers and other stimulus measures.

However, major housing agencies predict only a modest rise throuhout 2021, with 30-year mortgage rates staying in the high 2% or low 3% range on average.

Agency 30-Yr Rate Prediction
Fannie Mae 2.80%
Wells Fargo 2.89%
Freddie Mac 3.00%
National Assoc. of Home Builders 3.00%
National Assoc. of Realtors 3.20%
Mortgage Bankers Assoc. 3.30%
Average of all agencies 3.03%

As long as the pandemic forces the closure or reduced hours of businesses and strains the economy, it’s unlikely that mortgage rates will rise substantially. 

Even with widespread vaccine access, a recovery for individuals who suffered job losses or reduced hours, not to mention hard-hit small businesses, won’t happen overnight. 

“I do think it’s going to get better, but I think it’s worse than people think,” said Jarred Kessler, CEO of EasyKnock, a company that allows people to tap the equity in their homes through a sale-leaseback program.

Kessler says a slow but steady recovery as the service industry resurges and businesses and individuals get back on their feet “will be correlated with [rising] interest rates.”

As long as COVID strains the economy, it’s unlikely mortgage rates will rise substantially.

“I think we’re going to stay in a low interest rate environment for definitely the next two years,” Kessler said. 

Once the economy does begin to recover more consistently, however, increased yields on Treasury and other bonds will nudge interest rates higher as well, MarketWatch reports. 

Rates could also rise if the federal government stops, or at least eases, its pandemic policy of buying unlimited mortgage-backed securities.

If the economy begins steadily improving, the Federal Reserve may begin tapering those purchases, which could impact rates. However, Kessler said a formal announcement about a policy change seems unlikely in the immediate future. 

“It’s a Catch-22. If you do it, rates are going to go up and the Fed might be forced to backtrack a little bit,” Kessler said. “I think things are too fragile right now.” 

The bottom line is that although rates may rise somewhat in the coming months, the Federal Reserve projects that they will stay at historically low numbers through at least 2023. 

COVID vaccines will set the tone for mortgage interest rates

As a COVID-19 vaccine becomes more widely available, rates could also rise.

In theory, as more people get the vaccine and are able to safely eat at restaurants and attend large events, the economy will regain some of the momentum lost during the pandemic. 

However, a full recovery will take time, particularly if many opt not to get the vaccine due to fear of side effects.

The Pew Research Center found that as of December, 60% of Americans surveyed said they would likely take the vaccine once it became available to them. But 21% expressed misgivings about the vaccine and said they would probably not get it, even once more information became available about it. 

Although the percentage of people who need to be vaccinated in order to achieve herd immunity to COVID-19 is not yet known, according to the World Health Organization, it typically must be significantly higher than 60%.

While vaccine numbers and herd immunity might seem far removed from mortgage rates, they’re actually closely linked.

Remember that a weak economy means low mortgage rates, because investors pour money into the safe haven of mortgage-backed securities (MBS). This pushes rates down.

As the economy improves, which will gradually happen with widespread vaccination, investors will turn elsewhere and mortgage rates will once again increase.

Should I try to buy a house while rates are low? 

Buying a home is something you should decide based on your finances rather than what’s happening in the market.

As Kessler puts it, “I think you’re nuts if you’re trying to time it” for when mortgage rates are at record lows.  

“You’re in an unprecedented period of time where you can borrow for pretty much nothing right now. If you want to buy a home, don’t buy a home for a one-year trade. You should be thinking five, 10 years out,” he said.

It’s best to consider your credit score, savings, and the local real estate market, and make a decision based on those factors rather than the broader market. 

Even if you wait to buy a home until your finances improve, you’re still looking at historically low mortgage rates.

Even if you wait to buy until you’re in a better financial position and rates increase by then, you’re still looking at historic lows, Sklar said.

The important thing is to make sure you can afford your payments on the home you want, and to take a long-term view of what you’re paying. 

Sklar also noted that buyers should keep in mind that purchasing in a low-rate environment isn’t the only way to save on interest. You can also buy down your rate by paying discount points when you close on the home to reduce the amount of interest you’ll pay. 

Establishing good credit, keeping non-mortgage debts low, and saving up for a larger down payment can also help you qualify for a competitive rate.

Should I rush to lock a refinance rate?

Sklar said he advises clients against trying to “time” the market or waiting to lock in a rate in the hopes that it might go a little bit lower. 

“Do I expect it to go to zero? It’s not going to happen,” he said. “So if you don’t lock it, maybe you’ll lose a little bit from it going down. But there’s so much more to lose because if the rates go to simply 3%, you’ve just lost a tremendous amount of money.” 

Don’t worry if you’re not at the rate-lock stage yet. The low-rate window for refinancing isn’t over.

Mortgage rates are still near record lows and expected to stay there for the rest of 2021. If your current interest rate is in the 4-5% range or higher, you stand to save a lot even as rates are ticking up slightly.

Instead of focusing on timing the market, focus on how a mortgage refinance could benefit you.

“I think people are getting too fixed on the interest rate,” Sklar said. “I think people have to look at their actual savings.” 

Someone who wants to refinance, for instance, needs to calculate exactly how much they’ll save by applying for a new loan. If you’re only trimming your payments by a small amount each month, it may not be worth the time and closing costs to take out a new loan. 

Or maybe saving month-to-month isn’t your priority. If you want to cash-out home equity or pay off your mortgage early, timing the market for a rock-bottom rate might not be quite as important.

Whether you’re refinancing or buying a home, the right timing always depends on your unique situation.

Rates should stay low for the rest of the year at least, so lock when you’re ready and it makes sense for you to do so.

Verify your new rate (Jan 21st, 2021)

Source: themortgagereports.com

Mortgage Rates Today, January 8, 2021 | Key rate advances – Bankrate.com

Mortgage rates were mixed today, but one key rate advanced. The average for a 30-year fixed-rate mortgage rose, but the average rate on a 15-year fixed dropped. Meanwhile, the average rate on 5/1 adjustable-rate mortgages slid lower.

Rates accurate as of January 8, 2021.

Data source: Bankrate overnight averages data

Rates for mortgages are in a constant state of flux, but they remain much lower overall than they were before the Great Recession. If you’re in the market for a mortgage, it may be a great time to lock in a rate. Just make sure you shop around first.

Find the right mortgage rate for your specific criteria.

Current 30 year mortgage rates

The average 30-year fixed-mortgage rate is 2.88 percent, up 1 basis point over the last seven days. A month ago, the average rate on a 30-year fixed mortgage was higher, at 2.92 percent.

At the current average rate, you’ll pay a combined $415.16 per month in principal and interest for every $100,000 you borrow. That’s up $0.53 from what it would have been last week.

You can use Bankrate’s mortgage rate calculator to estimate your monthly payments and see what the effects of making extra payments would be. It will also help you computehow much interest you’ll pay over the life of the loan.

15-year mortgage rates

The average 15-year fixed-mortgage rate is 2.34 percent, down 1 basis point over the last seven days.

Monthly payments on a 15-year fixed mortgage at that rate will cost around $659 per $100,000 borrowed. Yes, that payment is much bigger than it would be on a 30-year mortgage, but it comes with some big advantages: You’ll save thousands of dollars over the life of the loan in total interest paid and build equity much more rapidly.

5/1 ARMs

The average rate on a 5/1 ARM is 2.95 percent, sliding 6 basis points over the last 7 days.

These types of loans are best for people who expect to sell or refinance before the first or second adjustment. Rates could be much higher when the loan first adjusts, and thereafter.

Monthly payments on a 5/1 ARM at 2.95 percent would cost about $419 for each $100,000 borrowed over the initial five years, but could increase by hundreds of dollars afterward, depending on the loan’s terms.

Jumbo mortgage interest rates

Today’s average rate for jumbo mortgages is 2.93 percent, up 4 basis points since the same time last week. A month ago, jumbo mortgages’ average rate was lower, at 2.91 percent.

At today’s average rate, you’ll pay a combined $417.84 per month in principal and interest for every $100k you borrow. That’s an additional $2.15 per $100,000 compared to last week.

To stay well-informed on current mortgage rates, see our rates hub.

How to find the best rates

Mortgage rates can differ largely based on overarching market forces, the loan amount, your location, your financial situation and how motivated mortgage lenders are to get your business. Keep in mind that the rates we cite are market averages–some people will be quoted higher or lower or that exact rate, and the rate may change daily even at the same lender.

It’s important when you’re searching for a loan to shop around and compare and contrast all the terms of your offers, not just the interest rate you’re being quoted. Your best rate and terms may be from an online lender, the bank down the street or perhaps through a mortgage broker. You won’t know unless you shop multiple lenders through multiple channels.

Bankrate is a great place to start, because you can take advantage of our mortgage rate comparison tool and remain current on today’s rates. If you’re not happy with the results you see between these pages, you should check with the institution where you do your banking, and other small lenders like credit unions or local banks.

Read more:

Searching for a mortgage lender?

Methodology: The rates you see above are Bankrate.com Site Averages. These calculations are run after the close of the previous business day and include rates and/or yields we have collected that day for a specific banking product. Bankrate.com site averages tend to be volatile — they help consumers see the movement of rates day to day. The institutions included in the “Bankrate.com Site Average” tables will be different from one day to the next, depending on which institutions’ rates we gather on a particular day for presentation on the site.

Source: bankrate.com