The current mortgage and refinancing rates
The average mortgage interest rate fell again yesterday. And conventional loans started this morning at 3,063% (3,063% APR) for a 30-year fixed rate mortgage.
I expect mortgage interest today slightly higherFederal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin later testify on Capitol Hill. And it is possible that one of them could cause a stir.
Current mortgage and refinancing rates
|Program||Mortgage interest||APR *||Change|
|Conventional fixed for 30 years||3.063||3.063||Unchanged|
|Conventional fixed for 15 years||2.75||2.75||-0.06%|
|Conventional ARM for 5 years||3||2,743||Unchanged|
|30 years of fixed FHA||2,875||3,856||-0.06%|
|Fixed FHA for 15 years||2||2,939||-0.13%|
|5 years ARM FHA||2.5||3,232||Unchanged|
|30 years permanent VA||2,813||2.99||Unchanged|
|15 years permanent VA||2||2,319||Unchanged|
|5 years ARM VA||2.5||2,413||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?
Those with mortgage loans that are about to close may choose to close now. They may have access to record low mortgage rates. And even those refinances are nearing new lows.
But personally, I would keep floating – unless I was close to getting closer. Because I think there may be more falling. But they are not guaranteed. And even I would be tempted to deposit my winnings by locking my course now.
See “Do Mortgage and Refinance Interest Rates Rise or Fall?” (below) for more. In the meantime, my personal recommendations for rate lockdown are:
- 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 is the state of affairs this morning at approximately 9:50 a.m. (ET). The data, compared to around the same time yesterday morning, was:
- The proceeds on 10-year Treasurys increased from 0.85% to 0.89%.Bad for mortgage interestMore than in any other market, mortgage rates normally track these specific government bond yields, although less recently
- Major stock indices were significantly higher when opened.Bad for mortgage interest.When investors buy stocks, they often sell bonds, which pushes their prices down and increases yields and mortgage rates. The opposite happens when the indexes are lower
- Oil prices were basically unchanged at $ 45.00, down from $ 45.28 a barrel.Neutral on mortgage interest * because energy prices play a major role in creating inflation and also indicating future economic activity.)
- Gold prices were up $ 1,816 from $ 1,775 an ounce.Good for mortgage interestIn general, 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 – A little lower at 90 from 91 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 worse 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?
I expect one worse day for mortgage interest. In other words, I think they will probably be a few inches higher today. But nothing is guaranteed in these difficult times.
It is, of course, the pandemic and its effects on the economy that are responsible for today’s ultra-low mortgage rates. They are almost always low in difficult economic times.
Admittedly, they will rise modestly from time to time (like today). But I can’t watch them spin higher for long or long – without a momentous change.
And these times certainly count as restless. Because the outlook for the pandemic and the economy is bleak, almost certainly until the middle of next year and maybe longer. The danger is that the economic damage can cause scars that delay the eventual recovery.
Possible future threat?
You need to be aware of a potential future threat from low mortgage rates. That is an announcement on December 16 that will follow a meeting of the Federal Open Market Committee (FOMC), the Federal Reserve’s policy body.
We already know that at its last meeting, the FOMC discussed the review of its purchases of mortgage-backed securities (MBS, the bonds that determine mortgage rates). And if the decision is made to stop or significantly reduce those purchases, mortgage rates may rise sharply that day and beyond. If enough investors think a policy change is likely, interest rates could start to rise before the announcement.
Personally, in the current gloom, I think the FOMC is probably not sacrificing the main bright spot (the housing market). But others are concerned. And you must be aware of this threat.
The mortgage interest trend has been clearly downward in recent months. According to Freddie Mac, a new low was set during each of the weeks ending October 15-22 and November 5-19. And that last low was the 13th this year. Last week, Freddie said these rates have remained stable.
But note that Freddie’s numbers only pertain to buying mortgages and ignoring refinances. And if you average across both, rates have been consistently higher than their all-time low since early August, although they are close now. 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 forecasting 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 (released November 17) and the MBAs (also November 17) 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
Some lenders are shocked by the pandemic. And they limit their offerings to only the most vanilla flavored mortgages and refinances.
But others remain brave. And you can probably still find the cashout refinance, investment mortgage, or jumbo loan you want. You just have to look around on a larger scale.
But, of course, you need to compare prices on a large scale no matter what type of mortgage you want. 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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