Several major mortgage rates dropped today. Average rates for both the 15- and 30-year fixed mortgages decreased, while the average rates for the 5/1 adjustable-rate mortgages also fell. Mortgage rates are always fluctuating, but are currently lower than they've been in years. If you're looking to lock in a low fixed-rate, now might be the right time. As always, it's important to review your personal goals and financial circumstances before buying a home -- and be sure to shop around with multiple lenders to find the mortgage that's right for you.
Check out mortgage rates that meet your distinct needs
30-year fixed-rate mortgages
The average 30-year fixed mortgage interest rate is 2.96%, which is a decrease of 7 basis points from seven days 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 mortgage will typically have a higher interest rate than a 15-year fixed rate mortgage -- but also a lower monthly payment. You won't be able to pay off your house as quickly and you'll pay more interest over time, but a 30-year fixed mortgage is a good option if you're looking for minimal monthly payments.
15-year fixed-rate mortgages
The average rate for a 15-year, fixed mortgage is 2.26%, which is a decrease of 5 basis points from seven days ago. 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. However, if you can 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 ARM has an average rate of 2.97%, a fall of 8 basis points from the same time last week. You'll typically get a lower interest rate (compared to a 30-year fixed mortgage) with a 5/1 ARM in the first five years of the mortgage. However, since the rate shifts with the market rate, you may end up paying more after that time, as described in the terms of your loan. Because of this, an ARM might be a good option if you plan to sell or refinance your house before the rate changes. If not, market fluctuations could significantly increase your interest rate.
Mortgage rate trends
We use data collected by Bankrate, which is owned by the same parent company as CNET, to track rates changes over time. This table summarizes the average rates offered by lenders across the country:
Current average mortgage interest rates
| Loan type | Interest rate | A week ago | Change |
|---|---|---|---|
| 30-year fixed rate | 2.96% | 3.03% | -0.07 |
| 15-year fixed rate | 2.26% | 2.31% | -0.05 |
| 30-year jumbo mortgage rate | 2.80% | 2.78% | +0.02 |
| 30-year mortgage refinance rate | 2.94% | 3.00% | -0.06 |
Updated on Aug. 4, 2021.
How to find the best mortgage rates
To find a personalized mortgage rate, speak to your local mortgage broker or use an online mortgage service. In order to find the best home mortgage, you'll need to consider 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 your mortgage rate. Generally, you want a higher credit score, a higher down payment, a lower DTI and a lower LTV to get a low interest rate. Apart from the mortgage interest rate, factors including closing costs, fees, discount points and taxes might also impact the cost. You should talk to several different 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 keep in mind 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-rate 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 stable for a certain number of years (usually five, seven or 10 years), then the rate adjusts annually based on the market rate.
When choosing between a fixed-rate and adjustable-rate mortgage, you should consider how long you plan to live in your house. Fixed-rate mortgages might be a better fit for those who plan on living in a home for quite some time. While adjustable-rate mortgages may offer lower interest rates upfront, fixed-rate mortgages are more stable in the long term. If you aren't planning to keep your new house for more than three to 10 years, though, an adjustable-rate mortgage might be a better deal. The best loan term always depends on your specific situation and goals, so be sure to consider what's important to you when choosing a mortgage.
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Here are mortgage rates for Aug. 4, 2021: Rates slide - CNET
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