Current mortgage rates for August 5, 2021: Rates are going down
A variety of major mortgage rates have fallen today. Average interest rates for 15-year and 30-year fixed mortgages have declined. For variable rates, the 5/1 variable rate mortgage has also declined. Mortgage interest rates are never set in stone, but interest rates are at historically low levels. If you are considering buying a home, this might be a great time to get a fixed rate. Before buying a home, remember to consider your personal needs and financial situation, and speak with different lenders to find the one that’s right for you.
Check out the mortgage rates that meet your specific needs
30-year fixed rate mortgages
For a 30-year fixed rate mortgage, the average rate you’ll pay is 2.96%, which is a decrease of 6 basis points from seven days ago. (One basis point equals 0.01%.) The most commonly used loan term is a 30-year fixed mortgage. A 30 year fixed rate mortgage will usually have a smaller monthly payment than a 15 year mortgage, but often a higher interest rate. While you will pay more interest over time – you pay off your loan over a longer period – if you’re looking for a lower monthly payment, a 30-year fixed mortgage may be a good option.
15-year fixed rate mortgages
The average rate for a 15-year fixed-rate mortgage is 2.26%, which is a decrease of 4 basis points from the same period last week. You will likely have a higher monthly payment with a 15-year fixed mortgage compared to a 30-year fixed mortgage, even if the interest rate and loan amount are the same. However, if you can afford the monthly payments, a 15-year loan has several advantages. You will most likely get a lower interest rate and pay less interest overall because you pay off the mortgage much faster.
5/1 adjustable rate mortgages
A 5/1 variable rate mortgage has an average rate of 2.97%, down 7 basis points from last week. With an ARM mortgage, you will typically get a lower interest rate than a 30-year fixed mortgage for the first five years. However, you could end up paying more after this period, depending on the terms of your loan and how the rate adjusts to the market rate. For this reason, an ARM might be a good option if you plan to sell or refinance a home before the rate changes. Otherwise, market fluctuations can dramatically increase your interest rate.
Mortgage rate trends
We use data 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 across the country:
Mortgage interest rates today
Prices exact as of August 5, 2021.
How to find the best mortgage rates
To find a personalized mortgage rate, talk to your local mortgage broker or use an online mortgage service. Make sure you think about your finances and current goals when looking for a mortgage. A range of factors, including your down payment, credit score, loan-to-value ratio, and debt-to-income ratio, will all affect your mortgage interest rate. Typically, you want a good credit score, higher down payment, lower DTI, and lower LTV to get a low interest rate. Besides the interest rate, factors such as closing costs, fees, points of call, and taxes can also affect the cost of your home. Be sure to talk to several different lenders – such as local and state banks, credit unions, and online lenders – and a comparator to find the best loan for you.
What is a good loan term?
An important factor to consider when choosing a mortgage loan is the length of the loan or the payment schedule. The most common loan terms are 15 years and 30 years, although there are also 10, 20 and 40 year mortgages. Another important distinction is between fixed rate and adjustable rate mortgages. For fixed rate mortgages, the interest rates are fixed for the term of the loan. Unlike a fixed rate mortgage, the interest rates for a variable rate mortgage are only the same for a certain period of time (usually five, seven, or 10 years). After that, the rate changes every year depending on the market.
When deciding between a fixed rate mortgage and an adjustable rate mortgage, you need to think about how long you plan to live in your home. Fixed rate mortgages might be better suited if you plan to stay in a house for a while. Fixed rate mortgages offer more stability over time compared to variable rate mortgages, but variable rate mortgages may offer lower interest rates upfront. However, you may get a better deal with an adjustable rate mortgage if you only intend to keep your home for a few years. The rule of thumb is no better loan term – it all depends on your goals and your current financial situation. It’s important to do your research and think about your own priorities when choosing a mortgage.