A variety of significant mortgage rates inched up today. The average interest rates for both 15-year fixed and 30-year fixed mortgages both grew. For variable rates, the 5/1 adjustable-rate mortgage also increased.
Mortgage interest rates are never set in stone, but interest rates are historically low. If you plan to finance a house, now might be a good time to get a fixed rate. Before you buy a home, remember to think about your personal needs and financial situation, and compare offers from various lenders to find the right one for you.
30-year fixed-rate mortgages
The 30-year fixed-mortgage rate average is 3.20%, which is an increase of 7 basis points compared to a week ago. (A basis point is equivalent to 0.01%.) The most frequently used loan term is a 30-year fixed mortgage. A 30-year fixed rate mortgage will usually have a lower monthly payment than a 15-year one and often a higher interest rate. You'll pay more interest over time since you're paying off your loan over a longer timeframe. But if you're looking for a lower monthly payment, a 30-year fixed mortgage may be a better option.
15-year fixed-rate mortgages
The average rate for a 15-year, fixed mortgage is 2.43%, which is an increase of 4 basis points since last week. Compared to a 30-year fixed mortgage, a 15-year fixed mortgage with the same loan value and interest rate will have a larger monthly payment. But a 15-year loan will usually be the better deal, as long as 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 adjustable-rate mortgage has an average rate of 3.21%, an addition of 7 basis points from a week ago. 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 changes in the market might cause your interest rate to increase after that time, as detailed in the terms of your loan. If you plan to sell or refinance your house before the rate changes, an ARM could make sense for you. But if that's not the case, you could be on the hook for a significantly higher interest rate if the market rates shift.
Mortgage rate trends
We use rates collected by Bankrate, which is owned by the same parent company as CNET, to track daily mortgage rate trends. 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||3.20%||3.13%||+0.07|
|15-year fixed rate||2.43%||2.39%||+0.04|
|30-year jumbo mortgage rate||2.80%||2.79%||+0.01|
|30-year mortgage refinance rate||3.17%||3.12%||+0.05|
Updated on Oct. 14, 2021.
How to shop for the best mortgage rate
You can get a personalized mortgage rate by reaching out to your local mortgage broker or using an online calculator. In order to find the best home mortgage, you'll need to consider your goals and overall financial situation. A range of factors -- including your down payment, credit score, loan-to-value ratio and debt-to-income ratio -- will all affect your mortgage interest rate. Having a good 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 to comparison shop with multiple lenders -- for example, credit unions and online lenders in addition to local and national banks -- in order to get a mortgage loan that's the best fit for you.
How does the loan term impact my mortgage?
When picking a mortgage, you should consider the loan term, or payment schedule. The mortgage terms most commonly offered are 15 years and 30 years, although you can also find 10-, 20- and 40-year mortgages. Mortgages are further divided into fixed-rate and adjustable-rate mortgages. For fixed-rate mortgages, interest rates are fixed for the life of the loan. Unlike a fixed-rate mortgage, the interest rates for an adjustable-rate mortgage are only stable for a certain amount of time (most frequently five, seven or 10 years). After that, the rate fluctuates annually based on the market interest rate.
When deciding between a fixed-rate and adjustable-rate mortgage, you should take into consideration the length of time you plan to live in your house. Fixed-rate mortgages might be a better fit if you plan on living in a home for quite some time. While adjustable-rate mortgages might have lower interest rates upfront, fixed-rate mortgages are more stable in the long term. However you could get a better deal with an adjustable-rate mortgage if you only have plans to keep your home for a couple years. 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 know what's most important to you when choosing a mortgage.