Mortgage interest rates stay on downward track

JEFF OSTROWSKI
BANKRATE.COM
National mortgage rates were mostly lower compared to a week ago.

National mortgage rates were mostly lower compared to a week ago. Rates for 30-year fixed, 15-year fixed and jumbo loans receded while rates for adjustable rate mortgages rose.

Mortgage rates have been volatile because of the COVID-19 pandemic. Generally, though, rates have been low. Mortgage rates are rising and falling from week to week, as lenders are inundated with forbearance and refinance requests.

In general, however, rates are consistently below 4 percent and even dipping below 3 percent. This is an especially good time for people with good to excellent credit to lock in a low rate for a purchase loan. However, lenders are also raising credit standards for borrowers and demanding higher down payments as they try to dampen their risks.

The average rate for the benchmark 30-year fixed mortgage is 3.12 percent, a decrease of 6 basis points over the last week. A month ago, the average rate on a 30-year fixed mortgage was higher, at 3.34 percent.

At the current average rate, you’ll pay a combined $428.10 per month in principal and interest for every $100k you borrow. That’s down $3.27 from what it would have been last week.

The average 15-year fixed-mortgage rate is 2.43 percent, down 1 basis point since the same time last week.

Monthly payments on a 15-year fixed mortgage at that rate will cost around $664 per $100k borrowed. That payment is much bigger than it would be on a 30-year mortgage, 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 mortgage is 3.21 percent, rising 13 basis points over the last week.

Adjustable-rate mortgages, or ARMs, are home loans that come with a floating interest rate. In other words, the interest rate can change intermittently throughout the life of the loan, unlike fixed-rate loans. These types of loans are best for those who expect to refinance or sell before the first or second adjustment. Rates could be substantially higher when the loan first adjusts, and thereafter.

Monthly payments on a 5/1 ARM at 3.21 percent would cost about $433 for each $100,000 borrowed over the initial five years, but could ratchet higher by hundreds of dollars afterward, depending on the loan’s terms.

The average jumbo mortgage rate is 3.12 percent, down 7 basis points over the last seven days. Last month on the 20th, the average rate for jumbo mortgages was greater than 3.12, at 3.37 percent.

At the current average rate, you’ll pay $428.10 per month in principal and interest for every $100k you borrow. Compared with last week, that’s $3.82 lower.

The average 30-year fixed-refinance rate is 3.17 percent, down 8 basis points over the last week. A month ago, the average rate on a 30-year fixed refinance was higher, at 3.41 percent.

At the current average rate, you’ll pay $430.83 per month in principal and interest for every $100,000 you borrow. That’s lower by $4.38 than it would have been last week.

Summary: How mortgage interest rates have moved over the past week

-          30-year fixed mortgage rate: 3.12%, down from 3.18% last week, -0.06

-          15-year fixed mortgage rate: 2.43%, down from 2.44% last week, -0.01

-          5/1 ARM mortgage rate: 3.21%, up from 3.08% last week, +0.13

-          Jumbo mortgage rate: 3.12%, down from 3.19% last week, -0.07