Today, a few important mortgage rates are trending down from last week. The average interest rates for 15-year fixed and 30-year fixed mortgages decreased. At the same time, average rates for the 5/1 adjustable-rate mortgage also dipped. Mortgage rates are always changing, but are currently at historical lows. If you're shopping for a home, now is an excellent time to lock-in a low rate. Before you buy, make sure to review your current financial situation and goals. As always, shop around to find the right lender and mortgage for you.
30-year fixed-rate mortgages
The 30-year fixed-mortgage rate average is 3.07%, which is a decrease of 3 basis points compared to one week ago. (A basis point is equivalent to 0.01%.) Thirty-year fixed mortgages are the most common loan term. A 30-year fixed mortgage will usually have a higher interest rate than a 15-year fixed rate mortgage -- but also a lower monthly payment. Although you'll pay more interest over time -- you're paying off your loan over a longer timeframe -- 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 mortgage is 2.36%, which is a decrease of 2 basis points compared to a week ago. Compared to a 30-year fixed mortgage, a 15-year fixed mortgage with the same loan value and interest rate will have a bigger monthly payment. However, if you can afford the monthly payments, there are several benefits to a 15-year loan. You'll most likely get a lower interest rate, and you'll pay less interest in total because you're paying off your mortgage much quicker.
5/1 adjustable-rate mortgages
A 5/1 ARM has an average rate of 3.08%, a decrease of 4 basis points compared to last week. You'll usually get a lower interest rate (compared to a 30-year fixed mortgage) with a 5/1 adjustable-rate mortgage in the first five years of the mortgage. However, shifts in the market may cause your interest rate to increase after that time, as detailed in the terms of your loan. Because of this, an adjustable-rate mortgage may be a good option if you plan to sell or refinance your house before the rate changes. If not, changes in the market could significantly 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 rates changes over time. This table summarizes the average rates offered by lenders nationwide:
Average mortgage interest rates
| Product | Rate | Last week | Change |
|---|---|---|---|
| 30-year fixed | 3.07% | 3.10% | -0.03 |
| 15-year fixed | 2.36% | 2.38% | -0.02 |
| 30-year jumbo mortgage rate | 3.24% | 3.15% | +0.09 |
| 30-year mortgage refinance rate | 3.13% | 3.14% | -0.01 |
Rates as of June 9, 2021.
How to find the best mortgage rates
You can get a personalized mortgage rate by connecting with your local mortgage broker or using an online calculator. When looking into home mortgage rates, think about your goals and current financial situation. Things that affect what the interest rate you might get on your mortgage include: your credit score, down payment, loan-to-value ratio and your debt-to-income ratio. Having a higher credit score, a higher down payment, a low DTI, a low LTV, or any combination of those factors can help you get a lower interest rate. The interest rate isn't the only factor that affects the cost of your home — be sure to also consider additional factors such as fees, closing costs, taxes and discount points. Be sure to shop around with multiple lenders -- for example, credit unions and online lenders in addition to local and national banks -- in order to get a mortgage that's right for you.
What is a good loan term?
One important thing you should consider when choosing a mortgage is the loan term, or payment schedule. The mortgage terms most commonly offered are 15 years and 30 years, although you can also find 10-, 20- and 40-year mortgages. Mortgages are further divided into fixed-rate and adjustable-rate mortgages. For fixed-rate mortgages, interest rates are set for the life of the loan. For adjustable-rate mortgages, interest rates are set for a certain number of years (usually five, seven or 10 years), then the rate changes annually based on the market rate.
When deciding between a fixed-rate and adjustable-rate mortgage, you should think about how long you plan to live in your home. Fixed-rate mortgages might be a better fit for people who plan on staying in a home for a while. Fixed-rate mortgages offer greater stability over time in comparison to adjustable-rate mortgages, but adjustable-rate mortgages might offer lower interest rates upfront. If you aren't planning to keep your new house for more than three to 10 years, though, an adjustable-rate mortgage could give you a better deal. The best loan term all depends on your situation and goals, so be sure to take into consideration what's important to you when choosing a mortgage.
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