Today’s Mortgage and Refinance Rates: October 12, 2021

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For three weeks in a row, fixed rates have risen slightly while floating rates have fallen. Overall, both fixed and variable interest rates are still relatively low.

Low mortgage rates tend to reflect a troubled economy, and the COVID-19 pandemic has hurt the US economy for the past year and a half.

High inflation is usually a sign that an economy is growing, and inflation in the US has skyrocketed since early 2021. Many people wonder if mortgage rates will rise as inflation rises.

Mortgage Rates Today

Conventional Tariffs from Money.com; government-sponsored rates from RedVentures.

Mortgage Refinance Rates Today

Conventional Tariffs from Money.com; government-sponsored rates from RedVentures.

Will mortgage rates rise in 2021?

Although inflation has been high this year, mortgage rates are unlikely to rise significantly by the end of 2021.

Economists and the

Federal Reserve
have speculated that the rise in inflation could be temporary as businesses reopen after shutting down during the pandemic. You have stated that once business opening becomes the new norm and Americans are vaccinated, inflation could slow down.

The latest consumer price index shows that this speculation could be correct – inflation rose 0.3% in August, lower than expected and one of the slowest months of the year.

If inflation continues to ease, interest rates could stay low through 2022.

What is a Fixed Rate Mortgage vs. a Variable Rate Mortgage?

In the past few weeks, fixed-rate mortgage rates have skyrocketed with the decline in variable rates. An adjustable rate mortgage (ARM) loan can be good deal depending on your situation.

Fixed rate mortgages tie your interest rate throughout the life of your loan. Variable rate mortgages fix your interest rate for the first few years, then your interest rate increases or decreases at regular intervals.

Since floating rates start low, they are worthwhile options if you plan to sell your home before the interest rate changes. For example, if you get a 7/1 ARM and plan to move seven years ago, you don’t risk paying a higher price later.

However, if you want to buy a home forever, a fixed price might still be a better fit. Fixed prices are relatively low, and you won’t risk your price rising in a few years.


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