Mortgage rates have fallen again today in all loan categories. This is the second day in a row that rates have fallen. The average rate of a 30-year fixed-rate mortgage has now fallen below 3.4%.

It looks like rates are stabilizing after last week’s bullish sprint. With lower interest rates, many borrowers will be able to get great rates for buying a home or refinancing a mortgage.

  • The average rate for a 30-year fixed-rate mortgage is 3.383% today.
  • The average rate for a 15-year fixed-rate mortgage today is 2.492%.
  • The average rate on an ARM 5/1 jumbo is now 2.9%.
  • The average rate on a 7/1 compliant ARM is 4.324% today.
  • The average rate on a 10/1 compliant ARM is 4.031% today.

30-year fixed mortgage rates today

  • The current 30-year rate is 3.383%.
  • It’s a day decrease by 0.043 percentage point.
  • It’s a month increase by 0.281 percentage point.

A 30 year fixed rate mortgage will have an interest rate that will not change during the life of the loan. As a result, your monthly payment will also be constant. The loan will be repaid in 360 months, unless you pay more than your monthly payment, sell the house, or refinance the mortgage.

Compared to a shorter term loan such as a 15 year mortgage, the interest rate will generally be higher. On the other hand, your monthly payments will be the lowest with a 30-year loan because you are spreading the payment over a longer period of time. This makes the 30-year term the most popular type of mortgage, accounting for 75% of the mortgage market.

While a 30-year loan is attractive because of its lower monthly payments, you pay higher overall interest than a 15-year mortgage because you pay a higher interest rate over a longer period.

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Data based on U.S. mortgages closed March 2, 2021

Type of loan March 2 Last week Switch
Conventional Fixed 15 Years 2.49% 2.55% 0.06%
Conventional Fixed 30 Years 3.38% 3.43% 0.05%
ARM rate 7/1 4.32% 4.36% 0.04%
ARM rate 10/1 4.03% 4.25% 0.22%

Your actual rate may vary

15-year fixed mortgage rate today

  • The current 15-year rate is 2.492%.
  • It’s a day offold by 0.022 percentage points.
  • It’s a month infold by 0.153 percentage points.

A 15 year fixed rate loan will also have a constant interest rate throughout the life of the mortgage. The monthly payments will also remain constant unless you refinance. If you keep the loan for its entire term, you will pay off the debt in 180 months.

The interest rate on a 15 year loan will be lower than that of a longer term loan like a 30 year loan. However, as you pay off the balance over a shorter period, the monthly payments will be higher than on the longer mortgage.

Shorter term loans are attractive to some buyers and refinancers because they will pay less overall interest over the life of the loan than they would with a longer term mortgage.

Jumbo 5/1 Variable Rate Mortgage Rates Today

  • Today’s ARM 5/1 rate is 2.9%.
  • It’s a day decrease by 0.141 percentage point.
  • It’s a month increase by 0.086 percentage point.

Variable rate mortgages will have an initial fixed rate period during which the interest on the loan will not change. Once this fixed rate period is over, the interest rate may change, usually on an annual basis, and may increase or decrease depending on market conditions. Thus, your monthly payment will be stable during the fixed rate period but will then evolve according to the evolution of the interest rate.

Common ARM terms include 5/1, where interest is fixed for the first five years of the loan and then resets each year on 7/1 and 10/1.

Often times, 5/1 ARMs will have the lowest interest rates in the market during the initial fixed rate period. The low interest rate makes these loans attractive to buyers who do not plan to stay in the home for the duration of the loan or who do not believe rates will rise. However, interest rates on fixed rates have hit all-time lows due to the pandemic. As a result, well qualified borrowers can sometimes find lower rates on a longer term loan.

Today’s VA, FHA, and Jumbo Loan Rates

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

  • The latest rate on a 30-year FHA mortgage is 3.302%.
  • The latest rate on a 30 year VA mortgage is 3.313%.
  • The latest rate on a 30-year jumbo mortgage is 3.564%.

Mortgage Refinance Rate Today

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

  • The latest refinance rate on a 30 year fixed rate refinance is 3.771%.
  • The latest refinance rate on a 15 year fixed rate refinance is 2.794%.
  • The latest refinance rate on a Jumbo ARM 5/1 is 3.361%.
  • The latest refinance rate on a 7/1 compliant ARM is 4.683%.
  • The latest refinance rate on a 10/1 compliant ARM is 4.571%.
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Data based on U.S. mortgages closed March 2, 2021

Type of loan March 2 Last week Switch
Conventional Fixed 15 Years 2.79% 2.89% 0.1%
Conventional Fixed 30 Years 3.77% 3.84% 0.07%
ARM rate 7/1 4.68% 4.88% 0.2%
ARM rate 10/1 4.57% 4.79% 0.22%

Your actual rate may vary

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 dropped to all-time low levels, but tended to rise throughout the month and into February.

Looking ahead, experts believe 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.

While mortgage rates are likely to rise this year, experts say the increase won’t happen overnight, and it won’t 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.

Factors that influence mortgage rates include:

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

Tips for getting the lowest mortgage rate possible

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

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

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

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

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

Finally, lock in your rate. Locking in your rate once you’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 on the previous business day. Today we’re posting the rates for Tuesday, March 2. Our rates reflect what a typical borrower with a credit score of 700 can expect to pay on a home loan right now. These rates were offered to people with a 20% deposit and include reduction points.

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