The average rate you'll pay for a 30-year fixed mortgage is 3.40 percent, down 10 basis points over the last week. This time a month ago, the average rate on a 30-year fixed mortgage was higher at 3.55 percent.
Several closely watched mortgage rates tapered off this week. The average for a 30-year fixed-rate mortgage decreased, but the average rate on a 15-year fixed cruised higher. The average rate on 5/1 adjustable-rate mortgages, or ARMs, the most popular type of variable rate mortgage, tapered off.
The average rate you’ll pay for a 30-year fixed mortgage is 3.40 percent, down 10 basis points over the last week. This time a month ago, the average rate on a 30-year fixed mortgage was higher at 3.55 percent.
At the current average rate, you’ll pay a combined $443.48 per month in principal and interest for every $100,000 you borrow. That’s a decline of $5.56 from last week.
The average 15-year fixed-mortgage rate is 2.86 percent, up three basis points since the same time last week.
Monthly payments on a 15-year fixed mortgage at that rate will cost around $684 per $100,000 borrowed. That’s obviously much higher than the monthly payment would be on a 30-year mortgage at that rate, but it comes with some big advantages: You’ll come out several thousand dollars ahead over the life of the loan in total interest paid and build equity much faster.
The average rate on a 5/1 adjustable rate mortgageis 3.14 percent, sliding five basis points since the same time last week.
These types of loans are best for those who expect to sell or refinance before the first or second adjustment. Rates could be materially higher when the loan first adjusts, and thereafter.
Monthly payments on a 5/1 ARM at 3.14 percent would cost about $429 for each $100,000 borrowed over the initial five years, but could climb hundreds of dollars higher afterward, depending on the loan’s terms.
None of the financial experts predict that rates will rise, 67 percent of them see a drop in rates and 33 percent believe that rates will remain relatively unchanged (plus or minus two basis points).
Dick Lepre, a senior loan officer at RPM Mortgage, Inc., said, “The short term techs are bullish, which means higher prices and lower yields in the coming week. This is recovery from damage done to Treasury yields after the May BLS Jobs Report. Despite media stories, the number of unemployed was not really a surprise. It was essentially the same number (21,487,000) as continuing unemployment claims (20,985,000) in the weekly jobless claims report the day before.”
James Sahnger, a mortgage planner with C2 Financial Corporation, adds, “Mortgage rates did better than I expected over the last week and not only held their own, started to improve following last week’s upside surprise employment report. The 10-year Treasury climbed from 65 to 95 basis points, but has since backed down this week to 73 basis points - this following the FOMC’s decision to leave rates unchanged, citing we have a long way to go before things get better. Rates could drift back down and the 10-year should ease back down into the 60s.”
Gordon Miller of Miller Lending Group, LLC, said, “I would expect rates to stay the same as the past week illustrates the disconnect between the 10-year Treasury and mortgage-backed securities. The bottom line is I don’t believe we go higher until we see a 10-year at least over 1.25 percent. For now, all that matters is keeping the economy afloat so rates should remain in a narrow trading range for a while or until the fed stops buying securities, which likely isn’t in the foreseeable future.”
Logan Mohtashami, a housing analyst at HousingWire, notes, “This has been a wild week as the job data surprised many, and the 10-year yield and the stock market headed higher. However, yields quickly fell back down. Some of the data is getting noticeably better, purchase application data, and the St. Louis Fed Financial Stress Index has made significant progress to pre-COVID levels. As more of the economy opens up, the data should get better. The risk right now is terrible coronavirus news, and any pullback in the markets can lead to more money going into bonds.”