Mortgage interest rates as of July 21, 2021: Rates cool off – CNET

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A variety of notable mortgage rates sank today. The average interest rates for both 15-year fixed and 30-year fixed mortgages took a tumble. For variable rates, the 5/1 adjustable-rate mortgage also tapered off. Mortgage interest rates are never set in stone, but interest rates are historically low. If you plan to buy a house, now might be a good time to get a fixed rate. Before you buy a home, remember to consider your personal needs and financial situation, and speak with multiple lenders to find the right one for you.

Find current mortgage rates for today

30-year fixed-rate mortgages

The 30-year fixed-mortgage rate average is 2.98%, which is a decline of 4 basis points from one week ago. (A basis point is equivalent to 0.01%.) The most common loan term is a 30-year fixed mortgage. A 30-year fixed rate mortgage will usually have a lower monthly payment than a 15-year one — but usually a higher interest rate. Although you’ll pay more interest over time — you’re paying off your loan over a longer timeframe — if you’re looking for a lower monthly payment, a 30-year fixed mortgage may be a good option.

15-year fixed-rate mortgages

The average rate for a 15-year, fixed mortgage is 2.33%, which is a decrease of 4 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 can afford the monthly payments. You’ll usually 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 2.99%, a decrease of 4 basis points compared to last week. 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 might be a good option. Otherwise, shifts in the market means your interest rate could be a good deal higher once the rate adjusts.

Mortgage rate trends

We use rates collected by Bankrate, which is owned by the same parent company as CNET, to track rates changes over time. This table summarizes the average rates offered by lenders nationwide:

Today’s mortgage interest rates

Loan term Today’s rate Last week Change
30-year mortgage rate 2.98% 3.02% -0.04
15-year fixed rate 2.33% 2.37% -0.04
30-year jumbo mortgage rate 2.80% 2.82% -0.02
30-year mortgage refinance rate 2.96% 3.10% -0.14

Rates accurate as of July 21, 2021.

How to shop for the best mortgage rate

To find a personalized mortgage rate, meet with your local mortgage broker or use an online mortgage service. When researching home mortgage rates, think about your goals and current financial situation. Specific mortgage interest rates will vary based on factors including credit score, down payment, debt-to-income ratio and loan-to-value ratio. Having a good 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. Aside from the mortgage rate, factors including closing costs, fees, discount points and taxes might also impact the cost of your house. You should speak with multiple lenders — such as local and national banks, credit unions and online lenders — and comparison shop to find the best mortgage loan for you.

How does the loan term impact my mortgage?

When picking a mortgage, you should consider 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 the same for the life of the loan. For adjustable-rate mortgages, interest rates are fixed for a certain number of years (most frequently five, seven or 10 years), then the rate changes annually based on the market rate.

When deciding between a fixed-rate and adjustable-rate mortgage, you should think about the length of time you plan to stay in your home. Fixed-rate mortgages might be a better fit for people who plan on staying in a home for quite some time. While adjustable-rate mortgages can sometimes offer lower interest rates upfront, fixed-rate mortgages are more stable over time. However you might get a better deal with an adjustable-rate mortgage if you’re only planning to keep your home for a few years. There is no best loan term as a general rule; it all depends on your goals and your current financial situation. Make sure to do your research and know what’s most important to you when choosing a mortgage.

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