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Several major mortgage rates increased today. The average rates on 30 year fixed mortgage and 15 year fixed mortgage both increased. On the side of the variable rate mortgage, the average rate on mortgages with 5/1 adjustable rates also crosses higher.
Mortgage rates are constantly changing, but they generally remain much lower than they were before the Great Recession. If you are in the market for a mortgage, it may make sense to go ahead and lock in if you see a rate that you like. Just make sure you shop first.
Find the right mortgage rate for your specific criteria.
30-year fixed mortgage
The average rate for the benchmark 30-year fixed mortgage is 3.14 percent, an increase of 8 basis points over the last seven days. Last month on the 17th, the average rate on a fixed-term mortgage was 30 years higher, at 3.15 percent.
At the current average rate, you pay a combined $ 429.19 per month in principal and interest for every $ 100,000 you borrow. That’s an extra $ 4.34 compared to last week.
You can use Bankrate’s mortgage calculator to estimate your monthly payments and find out how much you will save by adding additional payments. It will also help you to calculate how much interest you will pay over the life of the loan.
15-year fixed mortgage
The average rate of 15 years is at 2.66 percent, 3 basis points up from a week ago.
Monthly payments on a 15 year fixed mortgage at that rate will cost about $ 674 per loan $ 100,000. Yes, that payment is much larger than it would be on a 30 year mortgage, but it comes with some great benefits: You will save thousands of dollars over the life of the loan in total paid interest and build equity much faster.
5/1 ARM’s
The average rate on a 5/1 adjustable rate mortgage is 3.37 percent, climbing 9 basis points over the last 7 days.
These types of loans are best for those who expect to sell or refinance before the first or second adjustment. Rates could be much higher if the loan is adjusted first, and on top of that.
Monthly payments on a 5/1 ARM at 3.37 percent would cost about $ 442 for every $ 100,000 borrowed in the first five years, but could end up costing hundreds of dollars, depending on the terms of the loan.
Where rates are targeted
To see where Bankrate’s panel of experts expects rates to go from here, check out our projections of mortgage rates.
Want to see where rates are at the moment? Creditors across the country are responding to Bankrate.com’s mortgage week survey of the week to bring you the most up-to-date rates. Here you can see the latest average rates on the market for a wide variety of purchase loans:
Rates more accurate as of August 17, 2020.
Do you need to lock down a mortgage rate?
A rate lock guarantees your interest rate for a certain period of time. It’s just that lenders offer 30 day rate locks for a fee if the price of the rate lock is included in your loan. Some lenders will lock in rates for longer periods, even more than 60 days, but those locks can be costly. In today’s volatile market, some lenders will only lock in an interest rate for two weeks because they do not want to take unnecessary risk.
The advantage of a rate lock is that if interest rates go up, you will be locked into the guaranteed rate. Some lenders have an exchange rate option, which allows you to get a lower rate if interest rates fall before you take out a loan. In an environment with falling rates, a float-down lock could be worth the cost. Because mortgage rates are unpredictable, there is no guarantee that rates will stay where they are from week to week or even day to day. So, if you can lock in a low rate, you should do so instead of betting on interest rates that fall even lower.
Keep in mind that during the pandemic all aspects of real estate and mortgages last much longer than normal. Expect the closing of a new mortgage to take at least 60 days, with refinancing taking at least a month.
What causes mortgage rates
Mortgage rates are affected by a range of economic factors, from inflation to unemployment rates. Typically, higher inflation means higher interest rates and vice versa. As inflation rises, the dollar loses value, which in turn drives investors to mortgage-backed mortgages, causing prices to fall and yields to climb. As yields climb, rates become more expensive for lenders.
Generally, when the economy is strong, more people are buying houses. That drives the demand for mortgages. Increased demand for mortgages may increase rates. The opposite is also true; less demand can lead to lower rates.
What are the current mortgage rates?
Mortgage rates were volatile due to the COVID-19 pandemic. In general, however, rates have been low. For a while, some lenders raised rates because they were having a hard time dealing with the demand. In general, however, rates are consistently below 4 percent and even submerge in the mid to low 3s. This is a particularly good time for people with good to excellent credit to lock in a low rate for a purchase loan. However, lenders are also raising credit standards for lenders and demanding higher down payments as they try to mitigate their risks.
Methodology: The rates you see above are Bankrate.com Site Averages. These calculations are performed after the close of the previous business day and include rates and / or returns we have collected that day for a specific banking product. Bankrate.com’s banking resources are volatile – they help consumers see the movement of rates day by day. The settings listed in the “Bankrate.com Site Average” tables will vary from one day to the next, depending on what rates of settings we collect on a particular day for presentation on the site.
To learn more about the different rate averages that Bankrate publishes, see “Method for Rate Rate Averages of Bankrate.”
Shopping for the right lender? Check out Bankrate lenders reviews here.
