Mortgage rates are down for the third day in a row. Rates have come down on almost all types of loans for both buy mortgages and refinance mortgages. The only exception is the 5/1 variable rate mortgage, which today is slightly higher for purchase than for refi.

Unlike last week when interest rates were rising daily, this week’s rates are trending lower, although they are unlikely to be as low as they were at the start of the year. . However, the current rates are very advantageous for people interested in to buy a house and borrowers who have not recently refinanced a mortgage.

  • The average rate for a 30-year fixed-rate mortgage is 3.354% today.
  • The average rate for a 15-year fixed-rate mortgage today is 2.491%.
  • The average rate on an ARM 5/1 jumbo is 3.013% today.
  • The average rate on a 7/1 compliant ARM is 4.297% today.
  • The average rate on a 10/1 compliant ARM is 4.007% today.

Current 30-year fixed mortgage rates

  • The current 30-year rate is 3.354%.
  • It’s a day decrease by 0.029 percentage point.
  • It’s a month to augment by 0.249 percentage points.

The interest rate on fixed rate mortgages will not change during the life of the loan. Therefore, the monthly loan payment will not change either. A 30-year mortgage will be paid off in 360 months, unless you pay more than your monthly payment, refinance the loan, or sell your home.

A 30-year loan will have a higher interest rate than a shorter-term loan like a 15-year loan, but as you spread the payments over a longer period, the monthly payments will be lower. However, you will pay more overall interest compared to a 15 year loan because you are paying a higher rate for more months.

The 30-year loan is the most common term for borrowers, accounting for 75% of the mortgage market.

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Data based on U.S. mortgages closed on March 3, 2021

Type of loan 3rd of March Last week Switch
Conventional Fixed 15 Years 2.49% 2.55% 0.06%
Conventional Fixed 30 Years 3.35% 3.43% 0.08%
ARM rate 7/1 4.3% 4.36% 0.06%
ARM rate 10/1 4.01% 4.25% 0.24%

Your actual rate may vary

Current 15-year fixed mortgage rate

  • The current 15-year rate is 2.491%.
  • It’s a day offold 0.001 percentage point.
  • It’s a month infold by 0.165 percentage point.

Just like with a 30-year mortgage, the interest rate on a 15-year loan will not change during the life of the loan. The monthly payments will not change either. A 15-year loan will be paid off in 180 months, unless you pay more than the required payment each month, refinance the loan, or sell.

Compared to a 30-year loan, the interest rate on a 15-year loan is generally lower. However, as you spread the balance over a shorter period, the monthly payment will be higher. However, you will pay less total interest because you are paying a lower rate for a shorter period.

Shorter-term loans like 15-year loans are popular among borrowers who can afford higher payments, want to save on interest, and get out of debt faster.

Current 5/1 Jumbo Variable Rate Mortgage Rates

  • Today’s ARM 5/1 rate is 3.013%.
  • It’s a day infold by 0.113 percentage points.
  • It’s a month to augment by 0.187 percentage point.

With an adjustable rate mortgage, there will be an initial period where you actually have a fixed interest rate. Once this period is over, the rate will generally reset each year and may increase or decrease depending on market conditions. Consequently, the monthly payment will initially be fixed but will then evolve according to fluctuations in the interest rate.

An ARM 5/1 means that the loan will have a fixed interest rate for the first five years of the loan and will return each year thereafter. Other common loan terms are 7/1 and 10/1.

Compared to fixed rate loans, a 5/1 ARM will usually have a lower interest rate, at least during the initial fixed rate period. The low interest rate makes ARMs attractive to borrowers who plan to sell the home before the end of the fixed rate period or who don’t think rates will rise in the long run.

Today’s VA, FHA, and Jumbo Loan Rates

The average rates for FHA, VA and jumbo loans are:

  • The latest rate on a 30-year FHA mortgage is 3.244%.
  • The latest rate on a 30 year VA mortgage is 3.343%.
  • The latest rate on a 30-year jumbo mortgage is 3.554%.

Mortgage Refinance Rate Today

The average rates for 30-year, 15-year and 5/1 jumbo ARM loans are:

  • The latest refinance rate on a 30 year fixed rate refinance is 3.718%.
  • The latest refinance rate on a 15 year fixed rate refinance is 2.79%.
  • The latest refinance rate on a Jumbo ARM 5/1 is 3.391%.
  • The latest refinance rate on a 7/1 compliant ARM is 4.661%.
  • The latest refinance rate on a 10/1 compliant ARM is 4.534%.
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Data based on U.S. mortgages closed on March 3, 2021

Type of loan 3rd of March Last week Switch
Conventional Fixed 15 Years 2.79% 2.89% 0.1%
Conventional Fixed 30 Years 3.72% 3.84% 0.12%
ARM rate 7/1 4.66% 4.88% 0.22%
ARM rate 10/1 4.53% 4.79% 0.26%

Your actual rate may vary

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 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.

Although 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 its intention 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 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 your 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 on the previous business day. Today we are posting the rates for Wednesday March 3. 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.

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