Mortgage rates for Sept. 30, 2021: Rates move upward – CNET

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A variety of important mortgage rates saw an increase today. The average interest rates for both 15-year fixed and 30-year fixed mortgages both increased. The average rate of the most common type of variable-rate mortgage, the 5/1 adjustable-rate mortgage, also trended upward. Although mortgage rates fluctuate, they’re low right now. If you plan to buy a house, now might be an excellent time to secure a fixed rate. But as always, make sure to first think about your personal goals and circumstances before purchasing a home, and talk to multiple lenders to find a lender who can best meet your needs.

30-year fixed-rate mortgages

The average 30-year fixed mortgage interest rate is 3.18%, which is an increase of 15 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 mortgage will often have a greater interest rate than a 15-year fixed rate mortgage — but also a lower monthly payment. 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 2.45%, which is an increase of 15 basis points compared to a week ago. 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. 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 3.21%, an increase of 16 basis points compared to last week. With an ARM mortgage, you’ll typically get a lower interest rate than a 30-year fixed mortgage for the first five years. However, since the rate changes with the market rate, you might end up paying more after that time, as described in the terms of your loan. For borrowers who plan to sell or refinance their house before the rate changes, an ARM may be a good option. But if that’s not the case, you could be on the hook for a much higher interest rate if the market rates shift.

Mortgage rate trends

We use data 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 across the US:

Current average mortgage interest rates

Loan type Interest rate A week ago Change
30-year fixed rate 3.18% 3.03% +0.15
15-year fixed rate 2.45% 2.30% +0.15
30-year jumbo mortgage rate 2.79% 2.79% N/C
30-year mortgage refinance rate 3.16% 3.00% +0.16

Updated on Sept. 30, 2021.

How to shop for the best mortgage rate

When you are 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 take into account your goals and overall financial situation. Specific mortgage rates will vary based on factors including credit score, down payment, debt-to-income ratio and loan-to-value ratio. Generally, you want a higher credit score, a higher down payment, a lower DTI and a lower LTV to get a lower interest rate. Aside from the interest rate, additional costs including closing costs, fees, discount points and taxes might also factor into the cost of your house. You should speak with multiple lenders — like local and national banks, credit unions and online lenders — and comparison shop to find the best mortgage for you.

What’s the best loan term?

One important consideration when choosing a mortgage is the loan term, or payment schedule. The loan terms most commonly offered are 15 years and 30 years, although you can also find 10-, 20- and 40-year mortgages. Another important distinction is between 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 the same for a certain number of years (commonly five, seven or 10 years), then the rate adjusts annually based on the market interest rate.

One important factor to consider when choosing between a fixed-rate and adjustable-rate mortgage is how long you plan on living in your home. Fixed-rate mortgages might be a better fit if you plan on living in a home for a while. Fixed-rate mortgages offer more stability over time compared to adjustable-rate mortgages, but adjustable-rate mortgages can sometimes offer lower interest rates upfront. If you aren’t planning to keep your new home for more than three to 10 years, though, an adjustable-rate mortgage may give you a better deal. The best loan term all is entirely dependent on your own situation and goals, so make sure to think about what’s important to you when choosing a mortgage.

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