Today, a few major mortgage rates rose. Average rates for 15-year fixed mortgages remained untouched, while rates for 30-year fixed mortgages increased. The average rate of the most common variable-rate mortgage, the 5/1 adjustable-rate mortgage, also increased. Mortgage interest rates are never set in stone, but lately interest rates have been at historic lows. Because of this, now might be a good time to secure a fixed rate. Before buying a house, remember to review your personal needs and financial situation, and shop around with various lenders to find the best mortgage for your needs.
Take a look at mortgage rates for different types of loan
30-year fixed-rate mortgages
The average 30-year fixed mortgage interest rate is 3.04%, which is an increase of 1 basis point as seven days ago. (A basis point is equivalent to 0.01%.) The most common loan term is a 30-year fixed mortgage. A 30-year fixed mortgage will often have a higher interest rate than a 15-year fixed rate mortgage — but also a lower monthly payment. 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 2.32%, which is the same rate from the same time last week. Compared to a 30-year fixed mortgage, a 15-year fixed mortgage with the same loan value and interest rate will have a larger monthly payment. But a 15-year loan will usually be the better deal, if you’re able to afford the monthly payments. These include usually 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 3.05%, a rise of 1 basis point compared to a week ago. For the first five years, you’ll usually get a lower interest rate with a 5/1 ARM compared to a 30-year fixed mortgage. However, you could end up paying more after that time, depending on the terms of your loan and how the rate shifts with the market rate. Because of this, an ARM might be a good option if you plan to sell or refinance your house before the rate changes. Otherwise, changes in the market means your interest rate might be a good deal higher once the rate adjusts.
Mortgage rate trends
We use data collected by Bankrate, which is owned by the same parent company as CNET, to track daily mortgage rate trends. This table summarizes the average rates offered by lenders across the country:
Current average mortgage interest rates
|Loan type||Interest rate||A week ago||Change|
|30-year fixed rate||3.04%||3.03%||+0.01|
|15-year fixed rate||2.32%||2.32%||N/C|
|30-year jumbo mortgage rate||2.80%||2.80%||N/C|
|30-year mortgage refinance rate||3.01%||2.99%||+0.02|
Updated on Sept. 9, 2021.
How to shop for the best mortgage rate
You can get a personalized mortgage rate by connecting with your local mortgage broker or using an online calculator. When shopping around for home mortgage rates, consider your goals and current financial situation. 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.
Aside from the interest rate, other factors including closing costs, fees, discount points and taxes might also affect the cost of your home. Make sure to shop around with multiple lenders — like credit unions and online lenders in addition to local and national banks — in order to get a mortgage that’s the best fit for you.
What’s the best loan term?
When picking a mortgage, you should consider the loan term, or payment schedule. The most common loan terms are 15 and 30 years, although 10-, 20- and 40-year mortgages also exist. Another important distinction is between fixed- and adjustable-rate mortgages. For fixed-rate mortgages, interest rates are set for the life of the loan. For ARMs, interest rates are the same for a certain number of years (most frequently five, seven or 10 years), then the rate changes annually based on the current interest rate in the market.
When deciding between a fixed- and an adjustable-rate mortgage, you should take into consideration how long you plan to stay in your house. For people who plan on living long-term in a new house, fixed-rate mortgages may be the better option. Fixed-rate mortgages offer more stability over time in comparison to ARMs, but the latter can sometimes offer lower interest rates upfront. If you don’t have plans to keep your new house for more than three to 10 years, however, an ARM might give you a better deal. The best loan term is entirely dependent on your personal situation and goals, so be sure to take into consideration what’s important to you when choosing a mortgage.