Some major mortgage rates are down today. The interest rates on 15-year and 30-year fixed mortgages both went down. The average interest rate of the most common type of variable mortgage, the 5/1 variable rate mortgage, also fell. Although mortgage rates fluctuate, they are currently quite low. If you are planning to finance a home, now may be the best time to set a fixed rate. However, as always, before buying a home, consider your personal goals and circumstances first and find a lender who can best meet your needs.
Compare national mortgage rates from different lenders
30-year fixed-rate mortgages
The average 30 year mortgage rate is 3.02%, a 2 basis point decrease from the previous week. (One basis point is 0.01%.) 30-year fixed-rate mortgages are the most common loan periods. A 30-year fixed-rate mortgage usually has a lower monthly payment than a 15-year – but often a higher interest rate. You won’t be able to pay off your home that quickly, and you will pay more interest over time, but a 30-year fixed-rate mortgage is a good option if you want to minimize your monthly payments.
15-year fixed-rate mortgages
The average rate on a 15-year fixed-rate mortgage is 2.31%, down 1 basis point from seven days. Compared to a 30-year fixed-rate mortgage, a 15-year fixed-rate mortgage has a higher monthly payment for the same mortgage lending value and interest rate. However, if you can afford the monthly payments, then a 15 year loan has several advantages. You will usually get a lower interest rate and pay less overall interest because you will pay off your mortgage much faster.
5/1 adjustable rate mortgages
A 5/1 floating rate mortgage has an average rate of 3.03%, a 2 basis point decrease from the previous week. For the first five years of the mortgage, you usually get a lower interest rate (compared to a 30-year fixed-rate mortgage) with a 5/1 ARM. However, you may end up paying more after this time, depending on the terms of your loan and how the interest rate adjusts to the market rate. Because of this, an ARM can be a great option if you are planning to sell or refinance your home before the interest rate changes. Otherwise, market changes mean that once the interest rate adjusts, your interest rate could be much higher.
Mortgage rate trends
We use the interest rates collected by Bankrate, owned by the same parent company as CNET, to keep track of daily mortgage rate trends. This table summarizes the average rates offered by lenders across the country:
Current average mortgage interest rate
|Credit type||interest rate||A week ago||Change|
|30-year fixed rate||3.02%||3.04%||-0.02|
|15 years fixed rate||2.31%||2.32%||-0.01|
|30 year jumbo mortgage rate||2.79%||2.80%||-0.01|
|30 year mortgage refinancing rate||2.99%||3.01%||-0.02|
Updated September 16, 2021.
How to buy the best mortgage rate
To find a personalized mortgage rate, contact your local mortgage broker or use an online mortgage service. When looking for a mortgage, consider your current financial situation and goals. Specific mortgage rates vary based on factors such as creditworthiness, down payment, debt-to-income ratio, and loan-to-value ratio. In general, you want a higher credit score, larger down payment, lower DTI, and lower LTV in order to get a lower interest rate. In addition to the mortgage rate, other factors such as closing costs, fees, discount points, and taxes can all affect the cost of your home. You should shop with multiple lenders – such as credit unions and online lenders, as well as local and national banks – to get a mortgage loan that suits you.
What is the best repayment term?
One important thing to consider when choosing a mortgage is the repayment term or payment schedule. The most common loan periods are 15 years and 30 years, but there are also 10, 20 and 40 year mortgages. Mortgages are further divided into fixed rate and adjustable rate mortgages. The interest rates on a fixed-rate mortgage are stable over the life of the loan. Unlike a fixed-rate mortgage, the interest rates on an adjustable-rate mortgage are only the same for a certain period of time (typically five, seven or 10 years). After that, the interest rate fluctuates annually based on the current interest rate on the market.
When deciding between a fixed rate mortgage or an adjustable rate mortgage, you should consider how long you plan to live in your home. Fixed-rate mortgages may be more suitable if you plan to stay in a home for an extended period of time. Fixed rate mortgages offer greater stability over time compared to adjustable rate mortgages, but adjustable rate mortgages may offer lower interest rates upfront. However, if you don’t plan on keeping your new home for more than three to ten years, a variable rate mortgage might be a better deal for you. The best repayment term depends entirely on your own situation and goals. Therefore, when choosing a mortgage, consider what is important to you.