A variety of significant mortgage rates saw growth today. The average interest rates for both 15-year fixed and 30-year fixed mortgages both drifted higher. At the same time, average rates for 5/1 adjustable-rate mortgages also went up. Mortgage interest rates are never set in stone, but interest rates are the lowest they’ve been in years. For those looking to lock in a fixed rate, now is an optimal time to buy a house. But as always, make sure to first consider your personal goals and circumstances before buying a home, and shop around to find a lender who can best meet your needs.
Check out mortgage rates that meet your distinct needs
30-year fixed-rate mortgages
The average interest rate for a standard 30-year fixed mortgage is 3.09%, which is a growth of 1 basis point from one week ago. (A basis point is equivalent to 0.01%.) Thirty-year fixed mortgages are the most common loan term. A 30-year fixed rate mortgage will usually have a lower monthly payment than a 15-year one — but often a higher interest rate. You won’t be able to pay off your house as quickly and you’ll pay more interest over time, but a 30-year fixed mortgage is a good option if you’re looking to minimize your monthly payment.
15-year fixed-rate mortgages
The average rate for a 15-year, fixed mortgage is 2.38%, which is an increase of 1 basis point compared to a week ago. You’ll definitely have a larger monthly payment with a 15-year fixed mortgage compared to a 30-year fixed mortgage, even if the interest rate and loan amount are the same. However, as long as you’re able to afford the monthly payments, there are several benefits to a 15-year loan. You’ll most likely get a lower interest rate, and you’ll pay less interest in total because you’re paying off your mortgage much quicker.
5/1 adjustable-rate mortgages
A 5/1 ARM has an average rate of 3.11%, a rise of 3 basis points from seven days ago. With an ARM mortgage, you’ll usually get a lower interest rate than a 30-year fixed mortgage for the first five years. However, changes in the market could cause your interest rate to increase after that time, as detailed in the terms of your loan. For borrowers who plan to sell or refinance their house before the rate changes, an ARM could be a good option. If not, changes in the market could significantly increase your interest rate.
Mortgage rate trends
We use information collected by Bankrate, which is owned by the same parent company as CNET, to track changes in these daily rates. This table summarizes the average rates offered by lenders nationwide:
Average mortgage interest rates
|30-year jumbo mortgage rate||3.26%||3.26%||N/C|
|30-year mortgage refinance rate||3.14%||3.14%||N/C|
Rates as of May 4, 2021.
How to find personalized mortgage rates
When you’re ready to apply for a loan, you can reach out to a local mortgage broker or search online. In order to find the best home mortgage, you’ll need to consider your goals and current finances. Specific mortgage rates will vary based on factors including credit score, down payment, debt-to-income ratio and loan-to-value ratio. Having a higher credit score, a higher down payment, a low DTI, a low LTV, or any combination of those factors can help you get a lower interest rate. Besides the mortgage interest rate, factors including closing costs, fees, discount points and taxes might also factor into the cost of your house. Make sure you talk to multiple lenders — for example, local and national banks, credit unions and online lenders — and comparison shop to find the best loan for you.
What’s the best loan term?
One important thing to keep in mind when choosing a mortgage is the loan term, or payment schedule. The most common mortgage terms are 15 years and 30 years, although 10-, 20- and 40-year mortgages also exist. Mortgages are further divided into fixed-rate and adjustable-rate mortgages. For fixed-rate mortgages, interest rates are set for the life of the loan. For adjustable-rate mortgages, interest rates are set for a certain number of years (commonly five, seven or 10 years), then the rate changes annually based on the current interest rate in the market.
One thing to think about when deciding between a fixed-rate and adjustable-rate mortgage is how long you plan on living in your house. If you plan on living long-term in a new house, fixed-rate mortgages may be the better option. Fixed-rate mortgages offer greater stability over time in comparison to adjustable-rate mortgages, but adjustable-rate mortgages might offer lower interest rates upfront. However you might get a better deal with an adjustable-rate mortgage if you only plan to keep your house for a few years. The “best” loan term all all depends on your situation and goals, so be sure to take into consideration what’s important to you when choosing a mortgage.