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A variety of major mortgage rates have fallen today. Average interest rates for both 15-year fixed-rate mortgages and 30-year fixed-rate mortgages plummeted. When it comes to variable interest rates, the 5/1 variable rate mortgage also declined. Although mortgage rates are constantly changing, they are lower than they have been in years. If you are planning to buy a home, now may be a good time to set a fixed price. However, as always, before buying a home, consider your personal goals and circumstances first and find a lender who can best meet your needs.

View the mortgage rates that suit your individual needs

30-year fixed-rate mortgages

For a 30-year fixed-rate mortgage, the average interest rate is 3.01%, which is a decrease of 2 basis points compared to the previous week. (One basis point is 0.01%.) 30-year fixed-rate mortgages are the most common loan periods. A 30-year fixed-rate mortgage usually has a lower monthly payment than a 15-year – but usually a higher interest rate. Although you'll pay more interest over time – you pay off your loan over a longer period of time – if you're looking for a lower monthly payment, a 30-year fixed-rate mortgage can be a good option.

15-year fixed-rate mortgages

The average interest rate on a 15-year fixed-rate mortgage is 2.31%, a 7 basis point decrease from the previous week. Compared to a 30-year fixed-rate mortgage, a 15-year fixed-rate mortgage has a higher monthly payment for the same mortgage lending value and interest rate. However, as long as 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 overall interest because you will pay off your mortgage much faster.

5/1 adjustable rate mortgages

A 5/1 ARM has an average rate of 3.03%, a downtick of 1 basis point compared to the previous week. For the first five years of the mortgage, you usually get a lower interest rate (compared to a 30-year fixed-rate mortgage) with a 5/1 ARM. However, as the interest rate adjusts to the market rate, you may be able to pay more after this time, as detailed in the terms of your loan. Because of this, an ARM can be a great option if you are planning to sell or refinance your home before the interest rate changes. If not, market shifts could increase your interest rate significantly.

Mortgage rate trends

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

Current average mortgage interest rate
Credit type Interest rate A week ago change
30-year fixed rate 3.01% 3.03% -0.02
15 years fixed rate 2.31% 2.38% -0.07
30 year jumbo mortgage rate 2.78% 2.81% -0.03
30 year mortgage refinancing rate 2.99% 3.10% -0.11

Updated July 26, 2021.

How to buy the best mortgage rate

You can get a personalized mortgage rate by connecting with your local mortgage broker or using an online calculator. When researching home mortgage rates, consider your goals and your current financial situation. A number of factors – including your down payment, creditworthiness, loan-to-value ratio, and debt-to-income ratio – all affect your mortgage interest rate. A higher credit score, larger down payment, lower DTI, lower LTV, or a combination of these factors can help you get a lower interest rate. The interest rate isn't the only factor that affects the cost of your home – consider other costs such as fees, closing costs, taxes, and discount points. You should compare with multiple lenders – such as credit unions and online lenders, as well as local and national banks – to find a mortgage that is best for you.

How does the repayment period affect my mortgage?

One important thing to consider when choosing a mortgage is the repayment term or payment schedule. The most common mortgage terms are 15 years and 30 years, but there are also 10, 20 and 40 year mortgages. Mortgages are further divided into fixed rate and adjustable rate mortgages. The interest rates on a fixed-rate mortgage are fixed for the term of the loan. Unlike a fixed-rate mortgage, the interest rates on an adjustable-rate mortgage are only fixed for a certain period of time (typically five, seven or 10 years). Thereafter, the rate is adjusted annually based on the market price.

When deciding between a fixed rate mortgage and an adjustable rate mortgage, you should consider the length of time you plan to live in your own home. For those looking to stay in a new home for the longer term, fixed-rate mortgages may be the better option. While adjustable rate mortgages can offer lower interest rates upfront, fixed rate mortgages are more stable over time. However, you could get a better deal on an adjustable rate mortgage if you only want to keep your home for a few years. The best repayment term all depends on your own situation and goals. So keep in mind what is important to you when choosing a mortgage.

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source https://seapointrealtors.com/2021/07/26/todays-mortgage-rates-for-july-26-2021-rates-decrease/

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