Mortgage rates today

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Most mortgage and refinance rates have dropped since last Wednesday. The 10/1 ARM rates have increased slightly, though.

Both mortgage and refinance rates are at historic lows. If you’re ready to apply for a mortgage, you may want to choose a fixed-rate mortgage over an adjustable-rate mortgage right now.

Mat Ishbia, CEO of United Wholesale Mortgage, told Business Insider there isn’t much of a reason to choose an ARM over a fixed rate these days.

ARM rates used to start lower than fixed rates for the first few years, and there was a chance your rate could decrease later. But fixed rates are lower than adjustable rates right now, so you probably want to lock in a low rate while you can.

Mortgage rates on Wednesday, January 13, 2021

Mortgage type
Average rate today
Average rate last week

15-year fixed
2.36%
2.44%

30-year fixed
3.18%
3.32%

7/1 ARM
4.12%
4.21%

10/1 ARM
4.11%
4.10%

Rates from Ad Practitioners LLC.

Mortgage rates have decreased since last Wednesday, with the exception of 10/1 adjustable rates, which have increased by just one basis point.

Note that these are the national average rates for conventional mortgages, which are what you probably think of as “regular mortgages.” Rates may be different for government-backed mortgages through the FHA, VA, or USDA.

In general, mortgage rates are at all-time lows. Low rates are typically a sign of a struggling economy. Mortgage rates will probably stay low as the US continues to grapple with the COVID-19 pandemic.

Refinance rates on Wednesday, January 13, 2021

Mortgage type
Average rate today
Average rate last week

15-year fixed
2.63%
2.70%

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30-year fixed
3.81%
3.83%

7/1 ARM
4.47%
4.53%

10/1 ARM
4.60%
4.54%

Rates from Ad Practitioners LLC.

The 15-year fixed refinance rates, 30-year fixed rates, and 7/1 adjustable rates are down since last Wednesday. The 10/1 ARM rates are up by six basis points.

15-year fixed-rate mortgages

With a 15-year fixed term, you’ll pay down your mortgage over 15 years, and your rate stays the same the entire time.

Rates on 15-year mortgages are lower than on longer terms. Between these low rates and paying off your mortgage relatively quickly, it’s much more affordable overall to get a 15-year mortgage than a 30-year mortgage.

However, your monthly payments will be higher on a 15-year term than on a longer term. You’re cramming the same mortgage principal into a shorter chunk of time, so you’ll pay more each month.

30-year fixed-rate mortgages

A 30-year fixed-rate mortgage is similar to a 15-year mortgage, except you’ll pay off the mortgage over 30 years.

You’ll pay a higher interest rate on a 30-year fixed mortgage than on 15-year mortgages. For a long time, you’d also pay a higher rate on a 30-year fixed loan than on an ARM. But right now, 30-year fixed rates the better deal.

Monthly payments are lower for 30-year terms than for shorter terms, because you’re spreading payments out over a longer period of time.

You’ll pay more in interest in the long term with a 30-year term than you would for a shorter term, …read more

Source:: Business Insider

      

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