Today’s mortgage and refinance rates
Average mortgage rates rose moderately yesterday. They’re not yet at their highest level for the last 30 days. But they’re very different from how they were on Monday.
Don’t assume that rises during the last half of this week spell the end of falls. They might well. But it’s much too soon to draw inferences from them.
However, I think mortgage rates might rise again next week. High inflation and a surging economic recovery — further empowered by the $1 trillion infrastructure package — should normally drive those rates higher.
Current mortgage and refinance rates
|Conventional 30 year fixed||3.281%||3.299%||+0.02%|
|Conventional 15 year fixed||2.664%||2.696%||-0.02%|
|Conventional 20 year fixed||3.144%||3.178%||Unchanged|
|Conventional 10 year fixed||2.653%||2.713%||+0.01%|
|30 year fixed FHA||3.304%||4.068%||-0.02%|
|15 year fixed FHA||2.643%||3.287%||+0.15%|
|5/1 ARM FHA||2.643%||3.198%||-0.01%|
|30 year fixed VA||2.933%||3.119%||Unchanged|
|15 year fixed VA||2.781%||3.123%||+0.13%|
|5/1 ARM VA||2.623%||2.406%||-0.06%|
|Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions here.|
Should you lock a mortgage rate today?
I can’t guarantee that mortgage rates will continue to rise. But I think it highly likely that they will. However, increases will be punctuated by periods of falls.
So, for now, my personal recommendations remain:
- LOCK if closing in 7 days
- LOCK if closing in 15 days
- LOCK if closing in 30 days
- LOCK if closing in 45 days
- LOCK if closing in 60 days
However, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So be guided by your gut and your personal tolerance for risk.
What’s moving current mortgage rates
Yesterday, I wrote extensively about why inflation affects mortgage rates. Do read that if you’re interested in why those rates spiked on Wednesday following the publication of the consumer price index that morning.
What it means is that inflation should probably head our list of reasons why mortgage rates look set to continue to rise:
- Continuing inflation that’s higher than expected
- The resurgence of the economic recovery, which is likely to be strengthened by the recent passage of the $1 trillion infrastructure package through Congress
- Withdrawal of the Federal Reserve’s support for artificially low mortgage rates — From this month, the Fed’s slashing that $40-billion-a-month support by $5 billion a month until it reaches zero in mid-2022
- Falling COVID-19 infection rates — Actually, those have plateaued in recent days. But they remain close to one quarter of what they were on Sept. 13, when they last spiked. That adds momentum to the recovery
Each of those should exert an upward force on these rates. And, together, they comprise a formidable array that I expect to prove irresistible.
Well, very likely so. Of course, an economic catastrophe that forces each of those to switch direction is never impossible. Just unlikely.
Economic reports next week
The main economic report next week appears on Tuesday and measures retail sales in October. That provides information on how the economic recovery is doing.
Also that day, there’s an indicator of future inflation in the form of the import price index. And we saw on Wednesday how focused investors are on inflationary pressures.
None of the other economic reports listed below is likely to cause much movement in markets unless it includes shockingly good or bad data:
- Tuesday — October retail sales, import price index and industrial production and capacity utilization
- Wednesday — October building permits and housing starts.
- Thursday — October leading economic indicators. Plus weekly new claims for unemployment insurance to Nov. 13
Watch out for Tuesday.
Mortgage interest rates forecast for next week
Yes, I still think that mortgage rates might rise next week. But it’s hard to make predictions over a seven-day period and my recent record for these isn’t exactly glittering.
However, absent something economically devastating, I remain convinced that rates will rise in the coming weeks and months. In my view, the forces pushing them higher are simply too strong to resist.
Mortgage and refinance rates usually move in tandem. And a gap that had grown between the two has been largely eliminated by the recent scrapping of the adverse market refinance fee.
And another recent regulatory change has likely made mortgages for investment properties and vacation homes more accessible and less costly.
How your mortgage interest rate is determined
Mortgage and refinance rates are generally determined by prices in a secondary market (similar to the stock or bond markets) where mortgage-backed securities are traded.
And that’s highly dependent on the economy. So mortgage rates tend to be high when things are going well and low when the economy’s in trouble.
But you play a big part in determining your own mortgage rate in five ways. And you can affect it significantly by:
- Shopping around for your best mortgage rate — They vary widely from lender to lender
- Boosting your credit score — Even a small bump can make a big difference to your rate and payments
- Saving the biggest down payment you can — Lenders like you to have real skin in this game
- Keeping your other borrowing modest — The lower your other monthly commitments, the bigger the mortgage you can afford
- Choosing your mortgage carefully — Are you better off with a conventional, FHA, VA, USDA, jumbo or another loan?
Time spent getting these ducks in a row can see you winning lower rates.
Remember, it’s not just a mortgage rate
Be sure to count all your forthcoming homeownership costs when you’re working out how big a mortgage you can afford. So focus on your “PITI.” That’s your Principal (pays down the amount you borrowed), Interest (the price of borrowing), (property) Taxes, and (homeowners) Insurance. Our mortgage calculator can help with these.
Depending on your type of mortgage and the size of your down payment, you may have to pay mortgage insurance, too. And that can easily run into three figures every month.
But there are other potential costs. So you’ll have to pay homeowners association dues if you choose to live somewhere with an HOA. And, wherever you live, you should expect repairs and maintenance costs. There’s no landlord to call when things go wrong!
Finally, you’ll find it hard to forget closing costs. You can see those reflected in the annual percentage rate (APR) you’ll be quoted. Because that effectively spreads them out over your loan’s term, making that higher than your straight mortgage rate.
But you may be able to get help with those closing costs and your down payment, especially if you’re a first-time buyer. Read:
Mortgage rate methodology
The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The result is a good snapshot of daily rates and how they change over time.