Mortgage rates for August 3, 2021: Rates trailed off – CNET

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A few major mortgage rates receded today. The average interest rates for both 15-year fixed and 30-year fixed mortgages took a tumble. For variable rates, the 5/1 adjustable-rate mortgage also receded. Mortgage interest rates are never set in stone, but interest rates are historically low. If you plan to buy a house, now might be an excellent time to lock in a fixed rate. Before you buy a house, remember to take into account your personal needs and financial situation, and speak with different lenders to find the right one for you.

Find current mortgage rates for today

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 7 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 rate mortgage will usually have a smaller monthly payment than a 15-year one -- but typically a higher interest rate. You won't be able to pay off your house as quickly and you'll pay more interest over time, but a 30-year fixed mortgage is a good option if you're looking to minimize your monthly payment.

15-year fixed-rate mortgages

The average rate for a 15-year, fixed mortgage is 2.26%, which is a decrease of 5 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 larger monthly payment. But a 15-year loan will usually be the better deal, as long as you're able to afford the monthly payments. You'll usually 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 2.97%, a decrease of 8 basis points compared to last week. For the first five years, you'll usually get a lower interest rate with a 5/1 ARM compared to a 30-year fixed mortgage. But changes in the market could cause your interest rate to increase after that time, as detailed in the terms of your loan. If you plan to sell or refinance your house before the rate changes, an adjustable-rate mortgage may make sense for you. If not, changes in the market might significantly increase your interest rate.

Mortgage rate trends

We use rates 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 nationwide:

Average mortgage interest rates

ProductRateLast weekChange
30-year fixed2.96%3.03%-0.07
15-year fixed2.26%2.31%-0.05
30-year jumbo mortgage rate2.80%2.78%+0.02
30-year mortgage refinance rate 2.94%3.00%-0.06

Rates as of August 3, 2021.

How to find the best mortgage rates

You can get a personalized mortgage rate by reaching out to your local mortgage broker or using an online calculator. In order to find the best home mortgage, you'll need to take into account your goals and overall financial situation. Specific mortgage interest rates will vary based on factors including credit score, down payment, debt-to-income ratio and loan-to-value 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 other factors such as fees, closing costs, taxes and discount points. Be sure to speak with multiple lenders -- like local and national banks, credit unions and online lenders -- and comparison shop to find the best mortgage loan for you.

How does the loan term impact my mortgage?

When picking a mortgage, you should consider 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. The interest rates in a fixed-rate mortgage are fixed for the duration of the loan. For adjustable-rate mortgages, interest rates are stable for a certain number of years (most frequently five, seven or 10 years), then the rate changes annually based on the current interest rate in the market.

One thing to think about when deciding between a fixed-rate and adjustable-rate mortgage is the length of time you plan on living in your house. Fixed-rate mortgages might be a better fit for people who plan on staying in a home for quite some time. Fixed-rate mortgages offer greater stability over time compared to adjustable-rate mortgages, but adjustable-rate mortgages may offer lower interest rates upfront. However you might get a better deal with an adjustable-rate mortgage if you only have plans to keep your house for a couple years. The best loan term all depends on your situation and goals, so make sure to take into consideration what's important to you when choosing a mortgage.

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