Mortgage rates continued to drop today. The average rates for both 15- and 30- year fixed mortgages both decreased, while the average rate for 5/1 adjustable-rate mortgages also dropped. Mortgage rates are dynamic, but they're currently at historic lows. If you're in the market for a new home, now might be a good time to lock in a low, fixed rate. Before applying for a home loan, we recommend reviewing your financial goals and shopping around to find the best mortgage for your needs.
Find current mortgage rates for today
30-year fixed-rate mortgages
The average 30-year fixed mortgage interest rate is 2.98%, which is a decrease of 6 basis points compared to 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 typically 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 2.33%, which is a decrease of 5 basis points from the same time last week. 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. However, if you're able to afford the monthly payments, there are several benefits to a 15-year loan. You'll most likely 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 2.99%, a fall of 5 basis points compared to last week. For the first five years, you'll typically get a lower interest rate with a 5/1 adjustable-rate mortgage compared to a 30-year fixed mortgage. But 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 adjustable-rate mortgage may be a good option if you plan to sell or refinance your house before the rate changes. Otherwise, shifts in the market mean your interest rate might be a good deal higher once the rate adjusts.
Mortgage rate trends
We use rates 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:
Average mortgage interest rates
|30-year jumbo mortgage rate||2.80%||2.82%||-0.02|
|30-year mortgage refinance rate||2.96%||3.10%||-0.14|
Rates as of July 22, 2021.
How to shop for the best mortgage rate
To find a personalized mortgage rate, talk to your local mortgage broker or use an online mortgage service. When looking into home mortgage rates, think about 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. 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. The interest rate isn't the only factor that affects the cost of your home. Be sure to also consider other costs such as fees, closing costs, taxes and discount points. Make sure you speak with multiple lenders -- for example, 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 thing to consider when choosing a mortgage is the loan term, or payment schedule. The most common loan terms are 15 years 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 the same for the life of the loan. For adjustable-rate mortgages, interest rates are the same for a certain number of years (usually five, seven or 10 years), then the rate fluctuates annually based on the current interest rate in the market.
One factor to think about when deciding between a fixed- and adjustable-rate mortgage is how long you plan on living in your home. If you plan on living long-term in a new house, fixed-rate mortgages may be the better option. While adjustable-rate mortgages might have lower interest rates upfront, fixed-rate mortgages are more stable over time. If you aren't planning to keep your new home for more than three to 10 years, however, an adjustable-rate mortgage may give you a better deal. There is no best loan term as a rule of thumb; it all depends on your goals and your current financial situation. It's important to do your research and think about what's most important to you when choosing a mortgage.