Present mortgage charges for Oct. 6, 2021: Charges tick down
Jim Lane / Getty Images
A variety of major mortgage rates have fallen today. Average interest rates for both 15-year fixed-rate mortgages and 30-year fixed-rate mortgages plummeted. At the same time, the average interest rate on 5/1 variable rate mortgages also fell. Although mortgage rates are constantly changing, they are lower than they have been in years. Because of this, now is an ideal time for potential homebuyers to secure a fixed price. However, as always, before home buying, think about your personal goals and circumstances and compare offers to find a lender that best suits your needs.
30-year fixed-rate mortgages
For a 30-year fixed-rate mortgage, the average interest rate is 3.11%, which is a decrease of 2 basis points from seven days. (One basis point is 0.01%.) 30-year fixed-rate mortgages are the most common loan term. A 30-year fixed-rate mortgage often has a higher interest rate than a 15-year fixed-rate mortgage – but it also has a lower monthly payment. Although you’ll pay more interest over time – you pay off your loan over a longer period of time – if you’re looking for a lower monthly payment, a 30-year fixed-rate mortgage can be a good option.
15-year fixed-rate mortgages
The average rate on a 15-year fixed-rate mortgage is 2.38%, down 2 basis points from seven days ago. With a 15-year fixed-rate mortgage, you definitely have a higher monthly rate than you would with a 30-year old, even if the interest rate and loan amount are the same. However, as long as you can afford the monthly payments, a 15 year loan has several advantages. This usually includes the option of getting a lower interest rate, paying off your mortgage earlier, and paying less total interest in the long run.
5/1 adjustable rate mortgages
A 5/1 floating rate mortgage has an average rate of 3.11%, a 4 basis point decrease from the previous week. For the first five years, you will typically get a lower interest rate on a 5/1 variable rate mortgage than you would on a 30 year fixed rate mortgage. However, market shifts can cause your interest rate to rise after this time, as detailed in the terms of your loan. If you are planning to sell or refinance your home before the interest rate change, an adjustable rate mortgage may make sense for you. Otherwise, your interest rate could be significantly higher due to market changes once the interest rate adjusts.
Mortgage rate trends
We use the data collected by Bankrate, owned by the same parent company as CNET, to keep track of daily mortgage rate trends. This table summarizes the average rates offered by lenders across the country:
Average mortgage interest
|Fixed for 15 years||2.38%||2.40%||-0.02|
|30 year jumbo mortgage rate||2.79%||2.79%||opener|
|30 year mortgage refinancing rate||3.08%||3.12%||-0.04|
Prices from October 6, 2021.
How to Find the Best Mortgage Rates
You can get a personalized mortgage rate by contacting your local mortgage broker or using an online calculator. When looking for a mortgage, consider your current finances and goals. A number of factors – including your down payment, creditworthiness, loan-to-value ratio, and debt-to-income ratio – all affect your mortgage interest rate. A higher credit score, larger down payment, lower DTI, lower LTV, or a combination of these factors can help you get a lower interest rate. The interest rate isn’t the only factor that affects the cost of your home: consider additional factors such as fees, closing costs, taxes, and discount points. Make sure you compare with multiple lenders – such as credit unions and online lenders, as well as banks – to find a mortgage that suits you.
What is a good repayment term?
An important consideration when choosing a mortgage is the repayment term or payment schedule. The most common mortgage terms on offer are 15 year and 30 year, although you can also find 10, 20 and 40 year mortgages. Another important distinction is between fixed rate and adjustable rate mortgages. The interest rates on a fixed-rate mortgage are stable over the life of the loan. In contrast to a fixed-rate mortgage, the interest rates on a variable-rate mortgage are only fixed for a certain period of time (usually five, seven or 10 years). After that, the price changes annually based on the market price.
One important factor to consider when choosing between a fixed rate mortgage and an adjustable rate mortgage is the length of time you plan to live in your home. Fixed-rate mortgages may be more suitable if you plan to stay in a home for an extended period of time. While adjustable rate mortgages can offer lower interest rates upfront, fixed rate mortgages are more stable over time. However, you could get a better deal on an adjustable rate mortgage if you only want to keep your home for a few years. There is usually no such thing as a best repayment period; it all depends on your goals and your current financial situation. It is important to do the research and understand your priorities when choosing a mortgage.
Bring your home up to date with the latest information on automation, security, utilities, networking, and more.