Mortgage interest rates today, October 6, 2021 | Rates refused
What we are seeing today is that a handful of closely watched mortgage rates have come down. Both 30-year and 15-year fixed mortgage rates have come down. At the same time, average rates for 5/1 adjustable-rate mortgages (ARM) remained stable.
Mortgage rates are currently:
What this means for borrowers:
Historically low rates continue to be offered to highly qualified borrowers. But for many buyers, getting a good rate doesn’t make it easier to find a home. There aren’t a lot of homes for sale, so competition has driven up house prices. So, if you are shopping for a home, be prepared to move quickly because the few homes on the market are moving fast.
A look at today’s mortgage refinance rates
There is good news if you are considering refinancing, as the average rates for 15-year and 30-year fixed refinance loans have dropped. If you’ve been considering a 10-year refinance loan, just be aware that average rates have come down as well.
The average refinancing rates are as follows:
Here are the mortgage rates for different types of loans.
30-year fixed mortgage rates
The median interest rate on a 30-year standard fixed-rate mortgage is 3.11%, which is a decrease of 2 basis points from the previous week.
You can use NextAdvisor’s mortgage calculator to figure out your monthly payments and play with additional mortgage payments to figure out how much you could save. The mortgage calculator can also show you all the interest you will pay over the life of the loan.
15-year fixed mortgage interest rates
The median rate for a 15-year fixed-rate mortgage is 2.38%, which is 2 basis points down from a week ago.
The monthly payment on a 15 year fixed rate mortgage is, without a doubt, a much higher monthly payment than what you would get with a 30 year mortgage offering the same interest rate. But 15-year loans have huge advantages: you’ll save thousands of dollars in interest and pay off your loan much faster.
ARM rate 5/1
A 5/1 ARM has an average rate of 2.79%, the same rate compared to last week.
An adjustable rate mortgage is ideal for individuals who will sell or refinance before the rate changes. If not, their interest rates could end up being significantly higher after a rate adjustment.
For the first five years, a 5/1 ARM will typically have a lower interest rate than a 30-year fixed mortgage. Keep in mind that your payment could end up being several hundred dollars higher after a rate adjustment, depending on the terms of your loan.
Mortgage rate movement
The mortgage rate for which you qualify depends in part on personal factors, such as your credit rating or the amount of your down payment. But general rate trends involve a number of things that are beyond your control. Federal Reserve Bank policies, mortgage demand, and the health of the economy are all factors that influence mortgage rate trends.
The Federal Reserve Bank can also influence rates, although it does not set mortgage interest rates directly. Currently, the Federal Reserve buys billions of dollars in mortgage backed securities (MBS) every month. This increased demand for MBS has helped keep rates from rising. However, as the economy recovers, the Federal Reserve may announce plans to reduce the amount of securities it purchases, which would allow rates to rise.
How we calculate our mortgage rates
We use Bankrate’s daily rate data for our mortgage rate trends. These overnight rates are based on a specific borrower profile, which only includes loans for single family homes with a loan-to-value ratio of 80% or more.
Bankrate is part of the same parent company as NextAdvisor.
Updated October 6, 2021.
Should I lock in my mortgage rate now?
It is impossible to know in which direction mortgage rates will go overnight. This is why a mortgage rate foreclosure is such a useful tool, because it protects you if rates go up. And with interest rates so low right now, you should lock in your rate as soon as you can.
When you lock in your rate, ask your lender how long the lockout will last. A rate lockout can last anywhere from 30 to 60 days, which usually gives you enough time to close before the lockout expires. If something happens where you need to extend your rate foreclosure, find out about the fees, as many lenders charge a fee to extend a rate foreclosure.
Where are mortgage rates going in 2021?
In recent months, mortgage rates have held steady at around 3%. It looks like this rate trend will continue until the Federal Reserve changes its policies that have kept rates low. But there are indications that changes could be announced this fall, which could push rates higher, closer to the levels many experts predicted they would reach in 2021.
What happens with rates will depend on the economy. A growing economy usually goes hand in hand with rising mortgage rates. If spending increases, by government and consumers, it will likely lead to higher inflation. However, the Federal Reserve believes that the inflation we are seeing is only temporary, and rates have therefore remained low. But despite the potential for higher inflation, we are unlikely to see a surge in mortgage rates in 2021. One reason: The Federal Reserve believes low rates will help our economic recovery. It is therefore likely to take political decisions in favor of keeping rates low.
Mortgage rate forecasts 2021
Over the next few weeks, we shouldn’t see any drastic changes in mortgage rates. This means that we are likely to see rates stay near or below 3%.
Uncertainty surrounding COVID variants has put the brakes on rates. But if the Federal Reserve has enough confidence in the US economy, it could change course and loosen its policies that have kept rates low.
How to get the best mortgage rate
Finding a home loan is a great way to get the lowest interest rate.
Your mortgage rate depends on a variety of factors that lenders take into account when assessing the likelihood of you paying off your mortgage. Your credit score is a big part of that decision. And your loan to value ratio (LTV) is also important, so having a larger down payment is better for your mortgage rate.
But the banks will look at your situation differently. So you can provide the same documentation to three different banks and receive mortgage offers with very different rates and fees.