A variety of important mortgage rates sank lower today. While 15-year fixed mortgage rates have increased, interest rates on 30-year fixed-rate mortgages dropped off. For variable rates, the 5/1 adjustable-rate mortgage moved lower. Although mortgage rates are dynamic, they are quite low right now. Because of this, right now is a good time for prospective homebuyers to get a fixed rate. But as always, make sure to first take into account your personal goals and circumstances before purchasing a home, and compare offers to find a lender who can best meet your needs.
Take a look at mortgage rates for different styles of loan
30-year fixed-rate mortgages
For a 30-year, fixed-rate mortgage, the average rate you'll pay is 3.13%, which is a decrease of 4 basis points from one week ago. (A basis point is equivalent to 0.01%.) Thirty-year fixed mortgages are the most frequently used loan term. A 30-year fixed rate mortgage will usually have a lower monthly payment than a 15-year one -- but often a higher interest rate. 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 2.44%, which is an increase of 1 basis point 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, as long as you're able to afford the monthly payments, there are several benefits to a 15-year loan. 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 3.14%, a slide 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 might end up paying more after that time, depending on the terms of your loan and how the rate shifts with the market rate. If you plan to sell or refinance your house before the rate changes, an adjustable-rate mortgage might make sense for you. But if that's not the case, you may be on the hook for a much 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 nationwide:
Average mortgage interest rates
| Product | Rate | Last week | Change |
|---|---|---|---|
| 30-year fixed | 3.13% | 3.17% | -0.04 |
| 15-year fixed | 2.44% | 2.43% | +0.01 |
| 30-year jumbo mortgage rate | 3.33% | 3.20% | +0.13 |
| 30-year mortgage refinance rate | 3.21% | 3.23% | -0.02 |
Rates as of June 28, 2021.
How to find the best mortgage rates
When you are ready to apply for a loan, you can connect with a local mortgage broker or search online. When shopping around for home mortgage rates, take into account 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. Generally, you want a good credit score, a larger down payment, a lower DTI and a lower LTV to get a lower interest rate. Besides the mortgage rate, factors including closing costs, fees, discount points and taxes might also factor into the cost of your house. You should shop around with multiple lenders -- including credit unions and online lenders in addition to local and national banks -- in order to get a mortgage that's the best fit for you.
How does the loan term impact my mortgage?
When picking a mortgage, it's important to 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- and adjustable-rate mortgages. The interest rates in a fixed-rate mortgage are set for the duration of the loan. For adjustable-rate mortgages, interest rates are set 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 important factor to think about when choosing between a fixed-rate and adjustable-rate mortgage is how long you plan on staying in your home. Fixed-rate mortgages might be a better fit for those who plan on living in a home for quite some time. Fixed-rate mortgages offer more stability over time in comparison to adjustable-rate mortgages, but adjustable-rate mortgages may offer lower interest rates upfront. If you don't have plans to keep your new house for more than three to 10 years, though, an adjustable-rate mortgage could give you a better deal. The best loan term depends on your own situation and goals, so make sure to take into consideration what's important to you when choosing a mortgage.
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June 28, 2021 at 08:00PM
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Here are mortgage rates for June 28, 2021: Rates retreat - CNET
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