Mortgage And Refinance Charges Right this moment, July 12
Today’s mortgage and refinancing rates
Average mortgage rates rose a few inches last Friday. But that was the first increase in a week. And those rates remain exceptionally low by recent and historical standards.
Judging from the early moves in key markets, there is no strong direction of travel today. And it looks like it does Mortgage rates today can remain stable or almost constant.
Find and lock a cheap rate (July 12, 2021)
Current mortgage and refinancing rates
|program||Mortgage rates||Effective interest rate*||change|
|Conventionally fixed for 30 years||2,811%||2,811%||Unchanged|
|Conventionally fixed for 15 years||2.125%||2.125%||Unchanged|
|Conventional 20 years old||2,625%||2,625%||Unchanged|
|Conventional 10 year fixed year||1,944%||1,983%||Unchanged|
|30 years permanent FHA||2,672%||3,326%||Unchanged|
|15 years fixed FTA||2,522%||3.123%||+ 0.16%|
|5/1 ARM FHA||2.5%||3.213%||+ 0.01%|
|30 years of permanent VA||2,258%||2,429%||Unchanged|
|15 years fixed VA||2.25%||2,571%||Unchanged|
|5/1 ARM-VA||2.5%||2,392%||+ 0.01%|
|Prices are provided by our partner network and may not reflect the market. Your price can be different. Click here for an individual price offer. View our rate assumptions here.|
Find and lock a cheap rate (July 12, 2021)
COVID-19 Mortgage Updates: Mortgage lenders are changing rates and rules due to COVID-19. To learn how the coronavirus could affect your home loan, click here.
Should You Lock A Mortgage Rate Today?
Mortgage rates have come down in the past two to three weeks. And that can go on (overall, in the midst of ups and downs) for at least another week or two.
But there is no certainty that it will. And most experts still believe that mortgage rates will rise soon. In fact, there is a possibility of a sharp increase over the course of this month or next. So if you keep floating, don’t be complacent. And be ready to lock immediately if necessary.
Personally, I am not that brave. So my rate lock recommendations have to stay:
- LOCK when close in 7th Days
- LOCK when close in fifteen Days
- LOCK when close in 30th Days
- LOCK when close in 45 Days
- LOCK when close in 60 Days
However, I do not claim to have perfect foresight. And your personal analysis could be as good as mine – or better. So you can be guided by your instincts and your personal willingness to take risks.
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Important information about current mortgage rates
Here are some things you need to know:
- Usually mortgage rates go up when the economy is doing well and go down when the economy is in trouble. But there are exceptions. Read ‘How Mortgage Rates Are Determined and Why You Should Care About It
- Only “top notch” borrowers (with great credit scores, high down payments, and very healthy finances) will get the extremely low mortgage rates you see advertised
- Lenders vary. Yours may or may not follow the crowd when it comes to daily price action – though they usually all follow the broader trend over time
- When the daily price changes are small, some lenders adjust the closing costs and leave their price lists unchanged
- The refinancing rates are usually close to those for purchases. However, some types of refinancing are higher after a regulatory change
So there is a lot going on here. And no one can claim to know for sure what will happen to mortgage rates in the coming hours, days, weeks, or months.
Are mortgage and refinancing rates rising or falling?
today and so on
Yesterday, Treasury Secretary Janet Yellen, a former Federal Reserve chairwoman, warned of the potential economic damage the COVID-19 pandemic could wreak. After a meeting of the Group of 20 (G-20) Nations, Ms. Yellen said:
We are very concerned about the Delta variant and other variants that may emerge and threaten recovery. We are a networked global economy. What happens in any part of the world affects all other countries.
– Quoted in The New York Times (Paywall), July 11, 2021
Ms. Yellen’s comment echoes a very similar message conveyed by the President of the Federal Reserve Bank of San Francisco, Mary Daly, in an interview in the Financial Times last Friday.
Fortunately, such comments are usually good for mortgage rates. Because any prospect of a slowdown in the economic recovery encourages investors to shift their money from riskier stocks to safe bonds, including mortgage-backed securities (MBS), which directly determine those interest rates. As the additional demand drives the prices of MBSs up, they deliver lower returns, and therefore lower mortgage rates.
Inflation remains a risk
Meanwhile, investors remain concerned about current and future inflation. And their concerns could be confirmed or allayed later this week by several inflation-related economic reports.
The first and most important of these comes tomorrow. And that’s the consumer price index (CPI) along with the core CPI, the CPI excluding volatile food and energy prices.
Higher than expected numbers could lead to higher mortgage rates. Investors fear that high bonds could force the Fed to curb their purchases of mortgage-backed securities earlier than planned. Conversely, lower than expected numbers could depress these rates.
It is the Fed’s early announcement that it will reduce (gently reduce) its purchases of MBS, which poses the greatest risk of a sudden, sharp spike in mortgage rates.
Mortgage Rates and Inflation: Why Are Rates Rising?
For more background information, see the weekend edition of this Saturday column, which offers more space for in-depth analysis.
The general trend in mortgage rates was clearly declining for much of 2020. And according to Freddie Mac, a new weekly all-time low was hit 16 times in the past year.
The latest weekly record low was hit on January 7th at 2.65% for 30-year fixed-rate mortgages. But then the trend was reversed and interest rates rose.
However, in April and since then, those increases have been largely replaced by decreases, if only marginally. Freddie’s July 8th report puts that weekly average at 2.9% (with 0.6 fees and points). Low from 2.98% the previous week.
Expert predictions for mortgage rates
Looking ahead, Fannie Mae, Freddie Mac, and the Mortgage Bankers Association (MBA) each have a team of economists devoted to monitoring and forecasting developments in the economy, real estate and mortgage rates.
And here are their current interest rate forecasts for the remaining quarters of 2021 (Q2 / 21, Q3 / 21, Q4 / 21) and the first quarter of 2022 (Q1 / 22).
The numbers in the table below are for 30-year fixed-rate mortgages. Fannies were updated on June 16 and the MBAs on June 18. Freddie’s forecast is dated April 14th, but it is now only updated quarterly. So his numbers look out of date.
|Forecasters||Q2 / 21||Q3 / 21||Q4 / 21||Q1 / 22|
However, with so many imponderables, current forecasts could be even more speculative than usual.
Find your lowest rate today
Some lenders have been terrified by the pandemic. And they are limiting their offerings to vanilla-flavored mortgages and refinancing.
But others remain brave. And you can still likely find the refinance, investment mortgage, or jumbo loan you want. All you have to do is look around.
But of course, no matter what type of mortgage you want, you should compare widely. As a federal regulator, the Consumer Financial Protection Bureau says:
Shopping for your mortgage has the potential to result in real savings. It may not sound like much, but if you save only a quarter point in interest on your mortgage, you will save thousands of dollars over the life of your loan.
Confirm your new plan (July 12, 2021)
Mortgage rate methodology
The mortgage report receives interest rates from several credit partners on a daily basis according to selected criteria. We’ll find an average interest rate and an APR for each type of loan shown on our chart. Since we average a range of prices, this will give you a better idea of what you might find in the market. In addition, we determine average rates for the same types of credit. For example FHA fixed with FHA fixed. The end result is a good snapshot of the daily rates and how they change over time.