The current mortgage and refinancing rates
The average mortgage interest rate remained unchanged yesterday. And conventional loans started this morning at 2.75% (2.75% APR) for a 30-year fixed-rate mortgage.
Yesterday’s unchanged mortgage rates came as no surprise as a major market closed. Any differences would therefore have been related to the fact that lenders had adjusted their own rates. The first thing this morning was, things were looking quiet good for rates
Current mortgage and refinancing rates
|Program||Mortgage interest||APR *||Change|
|Conventional fixed for 30 years||2.75||2.75||Unchanged|
|Conventional fixed for 15 years||2.5||2.5||Unchanged|
|Conventional ARM for 5 years||3||2,743||Unchanged|
|30 years of fixed FHA||3||3,982||Unchanged|
|Fixed FHA for 15 years||2.25||3,191||Unchanged|
|5 years ARM FHA||2.5||3,239||Unchanged|
|30 years permanent VA||3||3,179||Unchanged|
|15 years permanent VA||2.25||2,571||Unchanged|
|5 years ARM VA||2.5||2,419||Unchanged|
|The rates are provided by our partner network and may not reflect the market. Your rate may differ. Click here for a personalized price offerSee our rate assumptions here|
COVID-19 Mortgage Updates: Mortgage lenders change rates and rules because of COVID-19. To see the latest news on how the coronavirus can affect your home loan, click here
Should You Lock Out Mortgage Interest Today?
We may see a modest fall in mortgage interest rates today. And there could be more to come.
So I wouldn’t lock today unless I was about to close. But the possibility of good economic news pushing them higher never goes away. See “Do Mortgage and Refinance Interest Rates Rise or Fall?” (below) for more.
Still, I’m putting my personal rate lock recommendations back to where they were last week:
- KEY LOCK when you get closer 7 days
- KEY LOCK when you get closer 15 days
- FLOAT when you get closer 30 days
- FLOAT when you get closer 45 days
- FLOAT when you get closer 60 days
But with so much uncertainty right now, your instincts can easily turn out to be as good as mine – or better. So let yourself be guided by your feelings and your personal risk tolerance.
Market data affecting current mortgage rates
Here’s the state of affairs this morning at about 9:50 a.m. ET. The data, compared to around the same time yesterday morning, was:
- The proceeds on 10-year Treasurys decreased from 0.96% to 0.92%.Good for mortgage interest.More than in any other market, mortgage rates normally track these specific government bond yields, although less recently
- Major stock indices were usually lower when opened.Good for mortgage interest.When investors buy stocks, they often sell bonds, pushing their prices down and increasing yields and mortgage rates. The opposite happens when the indexes are lower
- Oil prices fell to $ 41.80 from $ 42.62 a barrel.Good for mortgage interest * because energy prices play a major role in creating inflation and also indicating future economic activity.)
- Gold prices rose to $ 1,875 from $ 1,863 an ounce.Neutral for mortgage interest *.Overall, it is better for prices when gold rises, and worse when gold falls. Gold tends to rise when investors are concerned about the economy. And concerned investors tend to cut interest rates
- CNN Business Fear & Greed Index – Fell down to 62 from 65 out of 100. (Good for mortgage interest “Greedy” investors push bond prices (and interest rates) down as they exit the bond market and move to stocks, while “anxious” investors do the opposite. So lower values are better than higher ones
* A change of less than $ 20 on gold prices or 40 cents on oil prices is a fraction of 1%. We therefore only count meaningful differences as good or bad for the mortgage interest.
Reservation on markets and rates
Before the pandemic and the Federal Reserve’s interventions in the mortgage market, you could look at the numbers above and make a pretty good estimate of what would happen to mortgage rates that day. But that is no longer the case. The Fed is now a big player and some days can overwhelm investor sentiment.
So only use markets as a rough guide. They have to be exceptionally strong (interest rates are likely to rise) or weak (they can fall) to rely on. But with that caveat they look OK for mortgage interest today.
Important Notes About Current Mortgage Rates
Here are some things to know:
- The Fed’s continued interventions in the mortgage market (well above $ 1 trillion) should put sustained downward pressure on these interest rates. But it cannot always work miracles. So expect both increases and decreases in the short term. And read “For once, the Fed DOES influence mortgage rates. This is whyIf you want to understand this aspect of what is happening
- Mortgage rates tend to go up when the economy is doing well and fall when it is in trouble. But there are exceptions. Read How Mortgage Rates Are Determined and Why You Should Care
- Only top-tier borrowers (with excellent credit scores, high down payments and very healthy finances) get the ultra-low mortgage rates you see
- Lenders vary. Yours may or may not follow the crowd when it comes to daily price movements – although they usually follow the broader trend over time
- If the rate changes are minor, some lenders will adjust the closing costs and leave their rate cards the same
- Refinancing rates are generally close to those for purchases. But some types of refinances from Fannie Mae and Freddie Mac are currently significantly higher due to a change in regulation
So a lot is happening here. And no one can claim to know with certainty what will happen to mortgage rates in the coming hours, days, weeks or months.
Are the mortgage and refinancing rates going up or down?
Yesterday, I was hoping that “we might see the beginning of a return to the slow downward trend in mortgage rates that we’ve been seeing for months.”
And markets until 9:50 a.m. (ET) this morning suggest I may have been right – at least for now. Most of the current outlook looks bleak (so good for mortgage rates) and investors have already priced in the likely bright spots.
In particular, markets need to take more account of the economic impact of the COVID-19 pandemic. The number of new cases in the US continues to rise, with grim records most days.
Meanwhile, Governor Andrew M. Cuomo imposed new pandemic restrictions on New York State yesterday, further restricting personal and business activities. If other governors – or the federal government under a new government – are forced to follow suit, it could have serious consequences for our national gross domestic product.
Yes, the Pfizer vaccine can slow and eventually reverse the increase in new cases. But that assumes the vaccine will pass the remaining trials and prove equally safe and effective with widespread use. And even then, it could easily be in the second half of 2021 or beyond for the country to acquire some form of herd immunity. Markets cannot just shake that off.
But stock markets in particular are notorious for ignoring things they don’t want to see. There are therefore no guarantees that the mortgage interest will fall. And even when they do, periods of surges are inevitable, although we hope they are short.
This morning’s weekly unemployment claim rates were slightly better than expected. But they weren’t good enough to move markets. And, without further memorable news, it wouldn’t come as a surprise mortgage rates can be modestly lower today.
The mortgage interest trend has been clearly downward in recent months. According to Freddie Mac, each of the weeks ending October 15-22 and November 5 hit a new low. But today’s report showed higher mortgage rates this week.
However, keep in mind that Freddie’s numbers only pertain to purchase mortgages and ignore refinances. And if you average across both, rates have been consistently higher than an all-time low since a record high in August. The gap between the two has been widened by a controversial regulatory change.
Mortgage interest forecasts from experts
Looking further ahead, Fannie Mae, Freddie Mac and the Mortgage Bankers Association (MBA) each have a team of economists dedicated to monitoring and predicting what will happen to the economy, the housing industry and mortgage rates.
And here are their current interest rate forecasts for the last quarter of 2020 (Q4 / 20) and the first three of 2021 (Q1 / 21, Q2 / 21 and Q3 / 21).
But watch Fannie’s (out October 19) and the MBAs (October 21) are updated monthly. However, Freddie’s are now published quarterly. And the last one was released on October 14.
The figures in the table below are for 30-year fixed-rate mortgages:
|Predictor||Q4 / 20||V1 / 21||Q2 / 21||Q3 / 21|
So the predictions vary considerably. You pay your money …
Find your lowest rate today
The pandemic – along with a surge in home sales and mortgage and refinancing applications – has caused some turmoil in the home loan sector.
And that makes it more difficult for some borrowers to find the kind of mortgages they need. So be prepared to shop around even more than usual.
But of course it is always important to compare a loan. As a federal regulator the Consumer Financial Protection Agency says:
Looking around for your mortgage can lead to real savings. It may not sound like much, but If you save even a quarter point in interest on your mortgage, you will save thousands of dollars during the term of your loan.
Mortgage interest methodology
The Mortgage Reports receives rates based on selected criteria from multiple loan partners per day. We arrive at an average rate and APR for each type of loan to display in our chart. Since we have an average number of rates, it gives you a better idea of what you can find in the market. In addition, we calculate average rates for the same types of loans. For example: FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.
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