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Current mortgage interest on July 22, 2021: Rates continue to fall

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Mortgage rates have fallen further today. Average rates for fixed-rate mortgages of both 15 and 30 years both fell, while average rates for floating-rate mortgages also fell 5/1. Mortgage rates are dynamic, but are currently at an all-time low. If you’re looking to buy a new home, now might be a good time to lock in a low, fixed interest rate. Before applying for a home loan, we recommend reviewing your financial goals and shopping around to find the best mortgage for your needs.
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Find the current mortgage rate for today

30-year fixed-rate mortgages

The average 30-year fixed mortgage rate is 2.98%, down 6 basis points from a week ago. (A basis point equals 0.01%.) The most common loan term is a 30-year fixed mortgage. A mortgage with a fixed rate of 30 years usually has a higher interest rate than a mortgage with a fixed rate of 15 years, but also a lower monthly payment. While you’ll pay more interest over time — you’ll pay off your loan over a longer period of time — if you’re looking for a lower monthly payment, a 30-year fixed mortgage may be a good option.

Mortgages with a fixed interest rate of 15 years

The average rate for a 15-year, fixed mortgage is 2.33%, down 5 basis points from the same time last week. With a mortgage with a term of 15 years you certainly have a higher monthly amount than with a mortgage with a term of 30 years, even if the interest and the loan amount are the same. However, if you can afford the monthly payments, there are several advantages to a 15-year loan. You will probably get a lower interest rate and in total you pay less interest because you pay off your mortgage much faster.

5/1 floating rate mortgages

A 5/1 ARM has an average yield of 2.99%, down 5 basis points from last week. For the first five years, you will typically get a lower interest rate with a 5/1 floating rate mortgage compared to a 30-year fixed mortgage. But you may have to pay more after that time, depending on the terms of your loan and how the interest rate shifts with the market interest rate. Therefore, a variable rate mortgage can be a good option if you plan to sell or refinance your home before the interest rate changes. Otherwise, shifts in the market mean your interest rate could be a lot higher once interest rates adjust.

Mortgage Interest Trends

We use rates collected by Bankrate, which is owned by the same parent company as CNET, to track changes in these daily rates. This table summarizes the average rates offered by lenders in the US:

Average Mortgage Interest Rates

Product Rate Last week Change
30 years fixed 2.98% 3.04% -0.06
15 years fixed 2.33% 2.38% -0.05
30-year jumbo mortgage rate 2.80% 2.82% -0.02
Mortgage interest over 30 years 2.96% 3.10% -0.14

Rates as of July 22, 2021.

How to Shop for the Best Mortgage Rate

Contact your local mortgage broker or use an online mortgage service to find a personalized mortgage rate. When looking at mortgage rates, consider your goals and current finances. A range of factors — including your down payment, credit score, loan-to-value ratio, and debt-to-income ratio — all affect the interest rate on your mortgage. If you have a higher credit score, a higher down payment, a low DTI, a low LTV, or a combination of these factors, you can get a lower interest rate. Interest is not the only factor that affects the cost of your home. Also consider other costs such as fees, closing costs, taxes and discount points. Be sure to speak with multiple lenders — for example, local and national banks, credit unions and online lenders — and compare shop to find the best mortgage for you.

What is the best loan term?

An important thing to consider when choosing a mortgage is the loan term or payment schedule. The most common loan terms are 15 years and 30 years, although there are also mortgages with terms of 10, 20 and 40 years. Another important distinction is between fixed and floating rate mortgages. For fixed-rate mortgages, the interest rate is the same for the term of the loan. For floating rate mortgages, the interest rate is the same for a certain number of years (usually five, seven or ten years), after which the rate fluctuates annually based on the current interest rate in the market.

One factor to consider when choosing between a fixed and variable rate mortgage is how long you plan to live in your home. If you plan to live in a new home for a long time, a fixed rate mortgage may be the better option. While adjustable-rate mortgages may have lower interest rates up front, fixed-rate mortgages are more stable over time. However, if you don’t plan on keeping your new home for more than three to 10 years, a variable-rate mortgage may offer you a better deal. There is no best loan term as a rule of thumb; it all depends on your goals and your current financial situation. It’s important to do your research and think about what’s most important to you when choosing a mortgage.

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