A variety of major mortgage rates have risen today. The average interest rates for 15-year and 30-year fixed mortgages have both increased. At the same time, average rates for 5/1 adjustable rate mortgages have also increased. Although mortgage rates are constantly changing, they are lower than they have been in years. If you are thinking of buying a home, this might be a great time to get a fixed rate. Before buying a home, don’t forget to think about your personal needs and your financial situation, and speak with several lenders to find the one that’s right for you.
30-year fixed rate mortgages
The average interest rate for a standard 30-year fixed mortgage is 3.18%, which is an increase of 15 basis points from seven days ago. (One basis point equals 0.01%.) Thirty-year fixed rate mortgages are the most common loan term. A 30 year fixed rate mortgage will usually have a smaller monthly payment than a 15 year mortgage, but usually a higher interest rate. You won’t be able to pay off your home that quickly, and you’ll pay more interest over time, but a 30-year fixed mortgage is a good option if you’re looking to keep your monthly payment down.
15-year fixed rate mortgages
The average rate for a 15-year fixed-rate mortgage is 2.46%, which is an increase of 17 basis points from a week ago. You will certainly 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. However, if you can afford the monthly payments, a 15-year loan has several advantages. These typically include the ability to get a lower interest rate, pay off your mortgage sooner, and pay less total interest over the long term.
5/1 adjustable rate mortgages
A 5/1 ARM has an average rate of 3.20%, up 16 basis points from seven days ago. For the first five years, you will typically get a lower interest rate with a 5/1 variable rate mortgage compared to a 30 year fixed mortgage. But you could end up paying more after this period, depending on the terms of your loan and how the rate adjusts to the market rate. For borrowers who plan to sell or refinance their home before rates change, an ARM may be a good option. But if it doesn’t, you might be forced to pay a much higher interest rate if market rates change.
Mortgage rate trends
We use data collected by Bankrate, which is owned by the same parent company as CNET, to track rate changes over time. This table summarizes the average rates offered by lenders nationwide:
Current average mortgage interest rates
|Type of loan||Interest rate||A week ago||Switch|
|30-year fixed rate||3.18%||3.03%||+0.15|
|15-year fixed rate||2.46%||2.29%||+0.17|
|Giant 30-year mortgage rate||2.79%||2.79%||NC|
|30-year mortgage refinancing rate||3.15%||3.01%||+0.14|
Updated October 1, 2021.
How to shop for the best mortgage rate
When you’re ready to apply for a loan, you can contact a local mortgage broker or search online. In order to find the best home loan, you will need to consider your goals and current finances. A range of factors, including your down payment, credit score, loan-to-value ratio, and debt-to-income ratio, will all affect the interest rate on your mortgage. Typically, you want a good credit score, larger down payment, lower DTI, and lower LTV to get a lower interest rate.
Besides the mortgage rate, additional charges, including closing costs, fees, points of rebate, and taxes, can also affect the cost of your home. Be sure to shop around with multiple lenders – such as credit unions and online lenders in addition to local and state banks – to get the loan that’s best for you.
How does the term of the loan affect my mortgage?
One important thing that you should consider when choosing a mortgage loan is the length of the loan or the payment schedule. The most common loan terms are 15 and 30 years, although there are also 10, 20 and 40 year mortgages. Mortgages are further divided into fixed rate and variable rate mortgages. The interest rates for a fixed rate mortgage are set for the term of the loan. For ARMs, the interest rates are the same for a number of years (usually five, seven, or 10 years) and then the rate fluctuates each year based on the prevailing market interest rate.
One thing you need to think about when choosing between a fixed rate mortgage and an adjustable rate mortgage is how long you plan to stay in your home. Fixed rate mortgages might be better suited if you plan to live in a house for a while. While ARMs can sometimes offer lower interest rates upfront, fixed rate mortgages are more stable over time. However, you might get a better deal with an ARM if you plan to only keep your home for a few years. As a rule, there is no better loan term; it all depends on your goals and your current financial situation. Make sure you do your research and understand what is most important to you when choosing a mortgage.