The 30-year mortgage rate is down today | April 2, 2021
The latest average rate offered for a 30-year fixed rate mortgage is 3.6%. That’s down slightly from 3.617% yesterday, but higher than a month ago, when rates were still below 3.5%.
Other types of loans follow a similar path, with rates for the average borrower a little lower today but higher than at the start of the year. However, rates below 4% are historically low.
Even borrowers with the highest credit scores and large down payments rarely saw rates this low until recent years. So, if you are looking to buy a home with a mortgage or refinance an existing loan, this might still be a good time.
- The last rate on a 30 year fixed rate mortgage is 3.6%.
- The last rate for a 15 year fixed rate mortgage is 2.637%.
- The latest rate on a Jumbo ARM 5/1 is 2.968%.
- The latest rate on a 7/1 compliant ARM is 4.474%.
- The latest rate on a 10/1 compliant ARM is 4.724%.
Current 30-year fixed mortgage rates
- The 30-year rate is 3.6%.
- It’s a day offold by 0.017 percentage point.
- It’s a month to augment by 0.264 percentage point.
The interest rate on a 30-year fixed rate mortgage and the required monthly payment will not change during the term of the loan. If paid as required, the loan will be paid off in 360 months, unless you refinance or sell the house. You can also pay off the loan in a lump sum at any time or pay extra each month.
A 30 year loan will have a higher interest rate than a shorter term loan like a 15 year loan. The monthly payments will be lower because the balance is spread over a longer period of time. However, you will pay more interest on a 30-year mortgage because you will be paying a higher rate for longer.
Lower monthly payments make the 30-year loan the most popular category in the mortgage market.
Current 15-year fixed mortgage rates
- The 15-year rate is 2.637%.
- It’s a day offold by 0.014 percentage point.
- It’s a month infold by 0.146 percentage points.
With a 15-year fixed rate mortgage, your interest rate and monthly payments will not change for the duration of the loan. By paying only the required amount each month, the mortgage will be paid off in 180 months. You can repay the loan before the end of the term by making a lump sum payment or paying an additional fee each month.
Compared to a 30-year loan, the interest rate for a 15-year mortgage will be lower but the monthly payment will be higher because you pay it back in half the time. However, you’ll save on overall interest because you’re paying a lower rate more than half the time.
Borrowers who can afford higher monthly payments can opt for a 15-year loan to pay off debt faster or save on interest.
Current 5/1 Jumbo Variable Rate Mortgage Rates
- The ARM 5/1 rate is 2.968%.
- It’s a day decrease by 0.002 percentage point.
- It’s a month offold by 0.045 percentage point.
The interest rate on a variable rate mortgage will be set for an initial period. Once this deadline is set, the rate may increase or decrease depending on market conditions. Therefore, the monthly payment will not change during the fixed rate period but may change if the rate changes.
As an example, a 5/1 variable rate mortgage will have a fixed rate for the first five years and then the rate will reset once a year. Other common variable rate loan terms include a 7/1 and a 10/1. All ARMs will be repaid in 360 months.
The low initial rate can make a 5/1 ARM popular among borrowers who do not plan to hold the home beyond the fixed rate period. However, if they decide to stay in the house, they should be aware that the interest rate could increase at some point in the future.
Current rates for VA, FHA and jumbo loans
The average rates for FHA, VA and jumbo loans are:
- The rate on a 30-year FHA mortgage is 3.367%.
- The rate for a 30-year VA mortgage is 3.452%.
- The rate for a 30-year jumbo mortgage is 3.73%.
Current mortgage refinancing rates
The average rates for 30-year, 15-year and 5/1 jumbo ARM loans are:
- The refinance rate on a 30 year fixed rate refinance is 3.886%.
- The refinance rate on a 15 year fixed rate refinance is 2.94%.
- The refinancing rate on a Jumbo ARM 5/1 is 3.407%.
- The refinancing rate on a 7/1 compliant ARM is 4.777%.
- The refinancing rate on a 10/1 compliant ARM is 5.022%.
Where Are Mortgage Rates Going This Year?
Mortgage rates fell through 2020. Millions of homeowners responded to low mortgage rates by refinancing existing loans and taking out new ones. Many people have bought homes that they might not have been able to afford if the rates were higher.
In January 2021, rates briefly fell to all-time low levels, but tended to rise throughout the month and into February.
Looking ahead, experts believe that interest rates will rise further in 2021, but modestly. Factors that could influence the rates include how quickly COVID-19 vaccines are distributed and when lawmakers can agree on another cost-effective relief package. More vaccinations and government stimulus could lead to improved economic conditions, which would increase rates.
While mortgage rates are likely to rise this year, experts say the increase will not happen overnight and will not be a dramatic jump. Rates are expected to stay near their historically low levels throughout the first half of the year, rising slightly later in the year. Even with rates rising, this will still be a good time to finance a new home or refinance.
Factors that influence mortgage rates include:
- The Federal Reserve. The Fed took swift action when the pandemic hit the United States in March 2020. The Fed announced plans to move money through the economy by lowering the Federal Fund’s short-term interest rate between 0% and 0.25%, which is as low as they go. The central bank has also committed to buying mortgage-backed securities and treasury bills, thereby supporting the housing finance market. The Fed has reaffirmed its commitment to these policies for the foreseeable future on several occasions, most recently at a policy meeting in late January.
- The 10-year Treasury note. Mortgage rates move at the same pace as the yields on 10-year government treasury bills. Yields fell below 1% for the first time in March and have slowly risen since then. Currently, yields have hovered above 1% year-to-date, pushing interest rates up slightly. On average, there is typically a 1.8 point “spread” between Treasury yields and benchmark mortgage rates.
- The economy in the broad sense. Unemployment rates and changes in gross domestic product are important indicators of the overall health of the economy. When employment and GDP growth are low, it means the economy is weak, which can lower interest rates. Thanks to the pandemic, unemployment levels hit historic highs early last year and have yet to recover. GDP has also been affected, and although it has rebounded somewhat, there is still a lot of room for improvement.
Tips for getting the lowest mortgage rate possible
There is no universal mortgage rate that all borrowers receive. Qualifying for the lowest mortgage rates takes a bit of work and will depend on both personal financial factors and market conditions.
Check your credit score and your credit report. Mistakes or other red flags that can lower your credit score. The borrowers with the highest credit scores will get the best rates, so it’s essential to check your credit report before you begin the home search process. Taking action to correct mistakes will help increase your score. If you have high credit card balances, paying them off can also give you a quick boost.
Save money for a large down payment. This will lower your loan-to-value ratio, which means how much of the home’s price the lender has to finance. A lower LTV usually results in a lower mortgage rate. Lenders also like to see money that has been saved in an account for at least 60 days. It tells the lender that you have the money to finance the purchase of the house.
Shop around for the best rate. Don’t settle for the first interest rate a lender offers you. Check with at least three different lenders to see who is offering the lowest interest rate. Also consider the different types of lenders, such as credit unions and online lenders, in addition to traditional banks.
Also take the time to learn about the different types of loans. While the 30-year fixed-rate mortgage is the most common type of mortgage, consider a shorter-term loan such as a 15-year loan or an adjustable rate mortgage. These types of loans often have a lower rate than a conventional 30-year mortgage. Compare everyone’s costs to see which one best suits your needs and financial situation. Government loans – such as those backed by the Federal Housing Authority, the Department of Veterans Affairs, and the Department of Agriculture – may be more affordable options for those who qualify.
Finally, lock in your rate. Locking in your rate once you’ve found the right rate, the right loan product, and the lender will help ensure that your mortgage rate doesn’t increase until the loan closes.
Our mortgage rate methodology
Money’s Daily Mortgage Rates show the average rate offered by over 8,000 lenders in the United States for which the most recent rates are available. Today we are posting the rates for Thursday April 1. Our rates reflect what a typical borrower with a credit score of 700 can expect to pay on a home loan right now. These rates were offered to people contributing 20% and include discount points.