Several main mortgage rates declined today. The average interest rates for the 15-year fixed, 30-year fixed and 5/1 adjustable-rate mortgages all decreased. Although mortgage rates always fluctuate, currently they are at the lowest they’ve been in years. If you’re considering buying a home, now might be a great time to lock in a low fixed rate. Before jumping into any home-ownership decision, be sure to review your personal finances and shop around to find the best home loan for your needs.
Check out mortgage rates that meet your distinct needs
30-year fixed-rate mortgages
The 30-year fixed-mortgage rate average is 3.07%, which is a decline of 6 basis points as seven days 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 smaller monthly payment than a 15-year one — but usually 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 a decrease of 5 basis points from the same time last week. You’ll definitely have a higher 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. But a 15-year loan will usually be the better deal, if you’re able to afford the monthly payments. These include typically being able to get a lower interest rate, paying off your mortgage sooner, and paying less total interest in the long run.
5/1 adjustable-rate mortgages
A 5/1 ARM has an average rate of 3.07%, a slide of 7 basis points from seven days ago. You’ll usually get a lower interest rate (compared to a 30-year fixed mortgage) with a 5/1 adjustable-rate mortgage in the first five years of the mortgage. However, you might end up paying more after that time, depending on the terms of your loan and how the rate adjusts with the market rate. For borrowers who plan to sell or refinance their house before the rate changes, an ARM could be a good option. But if that’s not the case, you might be on the hook for a significantly higher interest rate if the market rates shift.
Mortgage rate trends
We use rates 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:
Current average mortgage interest rates
|Loan type||Interest rate||A week ago||Change|
|30-year fixed rate||3.07%||3.13%||-0.06|
|15-year fixed rate||2.38%||2.43%||-0.05|
|30-year jumbo mortgage rate||2.86%||3.33%||-0.47|
|30-year mortgage refinance rate||3.14%||3.21%||-0.07|
Updated on July 8, 2021.
How to shop for the best mortgage rate
To find a personalized mortgage rate, speak to your local mortgage broker or use an online mortgage service. In order to find the best home mortgage, you’ll need to take into account your goals and current finances. A range of factors — including your down payment, credit score, loan-to-value ratio and debt-to-income ratio — will all affect your mortgage rate. Having a good credit score, a larger down payment, a low DTI, a low LTV, or any combination of those factors can help you get a lower interest rate. The interest rate isn’t the only factor that affects the cost of your home. Be sure to also consider additional factors such as fees, closing costs, taxes and discount points. You should speak with a variety of lenders — like local and national banks, credit unions and online lenders — and comparison-shop to find the best mortgage for you.
What is a good loan term?
One important factor to consider when choosing a mortgage is the loan term, or payment schedule. The most common loan 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 fixed for the life of the loan. Unlike a fixed-rate mortgage, the interest rates for an adjustable-rate mortgage are only stable for a certain amount of time (most frequently five, seven or 10 years). After that, the rate fluctuates annually based on the market interest rate.
When choosing between a fixed-rate and adjustable-rate mortgage, you should think about how long you plan to stay in your house. For people who plan on staying long-term in a new house, fixed-rate mortgages may be the better option. While adjustable-rate mortgages can sometimes offer lower interest rates upfront, fixed-rate mortgages are more stable over time. However you may get a better deal with an adjustable-rate mortgage if you only have plans to keep your house for a couple years. The best loan term all depends on your own situation and goals, so be sure to consider what’s important to you when choosing a mortgage.