Current Mortgage Interest Rates, February 1, 2021 | Benchmark Rates Varied

Current Mortgage Interest Rates, February 1, 2021 | Benchmark Rates Varied

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What we are seeing today is mortgage rates following a split path. Average 30-year fixed mortgage rates didn’t move, but average 15-year fixed mortgage rates shrank. We also saw an upward trend in the average rate of 5/1 adjustable-rate mortgages (ARM).

The averages for 30-year fixed, 15-year fixed, and 5/1 ARMs are:

Today’s Mortgage Refinance Rates

In a surprising move, the average rate for a 30-year fixed refinance increased, while 15-year fixed-rate refinances trailed off. Shorter term 10-year fixed-rate refinance mortgages went down.

Today’s refinance rates are:

Current Mortgage Rates.

30-Year Fixed-Rate Mortgages

The median interest rate for a standard, 30-year, fixed mortgage is 2.88%, which is unchanged from the previous week.

You can use NextAdvisor’s home loan payment calculator to get an idea of what your monthly payments will be and play around with extra mortgage payments to wrap your head around how much you could save. The mortgage calculator can also show you how much interest you’ll owe over the life of the loan

15-Year Fixed-Rate Mortgages

The median rate for a 15-year fixed mortgage is 2.35%, which is a decrease of 1 basis point from seven days ago.

A 15-year, fixed-rate mortgage’s monthly payment is larger and will put more stress on your monthly budget than a 30-year mortgage would. However, 15-year loans have some considerable benefits: You’ll save thousands of dollars in interest and pay off your loan much faster.

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5/1 Adjustable-Rate Mortgages

A 5/1 adjustable-rate mortgage has an average rate of 3.00%, a rise of 2 basis points from seven days ago.

An adjustable-rate mortgage is ideal for borrowers who will refinance or sell before the rate changes. If that’s not the case, their interest rates could end up being noticeably higher after a rate adjusts.

For the first five years, a 5/1 ARM will typically have a lower interest rate compared to a 30-year fixed mortgage. Just keep in mind that your rate could climb higher and your payment might grow by hundreds of dollars a month.

Where Rates Are Trending

To see where mortgage rates are going we rely on information collected by Bankrate, which is owned by the same parent company as NextAdvisor. Looking at historical mortgage rates, we’re in an exceptionally low rate environment. The table below compares today’s average rates to what they were a week ago, and is based on information provided to Bankrate by lenders from across the country:

Rates as of February 1, 2021.

There isn’t a single factor that causes mortgage rates to move, but rather there are many. Chief among them are things including inflation and even the unemployment rate. When you see inflation increasing that usually means mortgage rates are about to climb higher. On the other hand, lower inflation typically accompanies lower mortgage rates. With higher inflation, the dollar becomes less valuable. This scenario pushes buyers away from mortgage-backed securities, which leads to price decreases and the need for increasing yields. And higher yields require borrowers to pay higher interest rates.

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The demand for housing can also impact mortgage rates. If more people are buying homes, there is a greater need for mortgages. This type of demand can drive interest rates up. And if there is less demand for mortgages, that can cause a decline in mortgage rates.

What’s in Store for Mortgage Rates in 2021

In recent months, mortgage rates fell to new all-time lows. Since there’s not much room for rates to decline further, many experts predict mortgage rates will remain flat or increase just slightly in 2021.

The economy will play a big factor, which is tied to how well the coronavirus can be contained. As the economy recovers, we should see inflation rise, which will put upward pressure on mortgage rates. Conversely, mortgage rates are likely to stay low if the coronavirus continues to cause economic hardship. The Federal Reserve could also choose to increase its purchasing of mortgage-backed securities, which could cause mortgage rates to drop.

Factors Behind Today’s Mortgage Rates

Your mortgage rate is determined by a number of things. First off, your personal finances have a big influence. A higher credit score or having the ability to make a larger down payment will help you qualify for a better rate. However, not everything is in your control, many larger economic factors play a role as well:

  • Condition of the economy
  • Federal Reserve policies
  • Government and consumer spending
  • Yields for 10-year Treasury bonds
  • Inflation
  • Personal situation: Loan term, type and location of the property, and credit score

Is Now a Good Time to Buy a Home?

There’s no “right time” to buy a house — the decision is a highly personal one. Keep in mind, when you purchase a home the monthly payment won’t be your only cost. You’ll also need enough money saved up for upfront closing costs and a down payment. And you’ll get a better deal if you have a higher credit score and lower debt-to-income ratio.

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However, the pandemic has exacerbated a shortage of homes, leading to bidding wars and rising prices. Those trends mean it can be a frustrating market for buyers.

How We Got These Rates

The rates we have included are averages provided by Bankrate.com Site Averages and are calculated after the close of the previous business day. The lenders that the “Bankrate.com Site Average” tables include are not the same from day to day.

National lenders provide this mortgage rate information to Bankrate.com. It is possible the mortgage rates we reference has changed since this was published.

Mortgage Interest Rates by Loan Type

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