Historic mortgage rates | NextAdvisor with TIME

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For borrowers, 2021 started just at the end of 2020 – with historically low mortgage rates.

So now is always a great time to refinance your mortgage or to consider buying a home.

And as long as the US economy is still mired in a recession, rates should stay low. Many experts believe mortgage rates could rise towards the end of 2021, while remaining favorable relative to historical averages. With 30-year fixed rates falling below 2.7% in 2020, even a sharp 1% increase would leave rates well below the 5% to 6% average rates we saw just 15 years ago. years.

Before you embark on refinancing your existing mortgage, you should understand the fees you will be paying, which are included in the annual percentage rate (APR). It’s also important to understand that average rates may not apply to your situation. Your credit score and your loan-to-value (LTV) will affect any mortgage rates you can qualify for.

Average historical mortgage rates for the past 21 months

What are mortgage interest rates based on?

No government entity directly sets or regulates mortgage rates. Rather, they are based on a number of broader market factors. Everything from housing demand to inflation and the overall health of the economy can influence mortgage rates – as well as refinancing rates.

Typically, when the economy is strong and unemployment rates are low, rates rise because demand is higher. But during a recession – like the one we’re experiencing now – rates often drop as lenders try to attract a smaller pool of borrowers looking to spend.

Monetary policies set by the Federal Reserve can also have a significant impact on mortgage rates, even if they do not set rates directly. When the Federal Reserve cuts the federal funds rate or buys large amounts of Treasury securities, it puts downward pressure on mortgage rates.

Will Mortgage Interest Rates Rise?

In 2020, the pandemic and subsequent recession repeatedly pushed mortgage rates to new historic lows. Given the low rates, you should expect rates to increase in the future. But when they increase and how far they go depends on a handful of influences.

How and when the economy recovers from this recession will likely be the main factor driving rates up. Logan Mohtashami, housing data analyst at HousingWire, believes that our economic recovery and the potential for rate increases are tied to the successful implementation of a vaccine. So we’re likely to see continued low rates until the unemployment rate and other economic indicators start to return to pre-pandemic levels, Mohtashami says.

Even after the pandemic is behind us, rates should still be historically favorable compared to double-digit mortgage rates of the ’70s and’ 80s. “I would be shocked if I ever saw 6% mortgage rates in my life,” says Mohtashami. “Rates have been falling for four decades.” Unless the government takes extreme measures to stimulate the economy, he said, demographic trends and other macroeconomic factors will keep rates relatively low in the long run.

How mortgage rates affect your monthly payment

Your monthly mortgage payment typically includes mortgage, interest, and escrow payments. And what at first glance may seem like a slight increase in your interest rate can have a big impact on your bottom line. It is therefore important to compare mortgage lenders to make sure you get the best deal.

Over a 30-year term, a 0.5% rate increase on a loan balance of $ 250,000 could cost $ 68 more per month and almost $ 25,000 more in interest over the life of the loan.

term of the loan Amount of the loan Interest rate Monthly payment Total cost of the loan
30 years $ 250,000 3% $ 1,054 $ 379,446
30 years $ 250,000 3.5% $ 1,122 $ 404,308

Typically, 15-year mortgages have lower rates than 30-year mortgages, and because you pay off the loan much faster, they’re usually cheaper. So the same interest rate hike would be less costly in the long run, but almost as costly month to month.

term of the loan Amount of the loan Interest rate Monthly payment Total cost of the loan
15 years old $ 250,000 2.5% $ 1,666 $ 300,092
15 years old $ 250,000 3% $ 1,726 $ 310,783

How Does Your Credit Score Affect Your Rate?

In addition to macroeconomic factors beyond your control, your personal circumstances will also influence the interest rate to which you are entitled. Your down payment and credit score can have a big impact on your mortgage rate.

Lenders set mortgage rates based on the degree of risk they see as a loan. So having a lower credit score or a smaller down payment will increase the rate you are likely to qualify for. On the other hand, improving your credit score and taking a larger down payment can backfire and lower your interest rate. Although each lender has different standards, a down payment of at least 20% and a credit score of 700-740 will usually get you the lowest mortgage rate.

If you’re having trouble qualifying for a mortgage or getting a decent interest rate, you may have better luck with a government guaranteed loan. Some mortgages are guaranteed by different federal government departments and are considered less risky by lenders. There are loans guaranteed by the Federal Housing Administration (FHA loan), the Department of Veterans Affairs (VA loan), and the Department of Agriculture (USDA loan).

What is an APR?

The annual percentage rate, or APR, shows you more than the interest rate on your loan. It also includes a lot of the fees you pay on any mortgage or refinance. While your mortgage interest rate is the biggest long-term cost associated with a home loan, it’s not the only expense you should be aware of. Whenever you take out a mortgage, there are upfront costs called closing costs. This can include fees paid to the appraiser and home inspector, as well as loan origination fees and discount points. All of these costs add up and can easily be anywhere from 2% to 5% of the loan amount.

These upfront costs can vary widely depending on the lender. So, if you compare loan offers purely based on the interest rate, you might end up paying more fees than you need to. This is why understanding PRA is important. If a loan has higher brokerage fees, this will be reflected in the APR, but not the interest rate. So the APR gives you a better idea of ​​the total cost of the mortgage.

History of mortgage rates for the last 12 months

Dated Fixed average over 30 years Fixed average over 15 years Average ARM 5/1
April 23, 2021 3.0756% 2.3832% 3.2354%
April 16, 2021 3.1241% 2.4218% 3.0933%
April 9, 2021 3.2136% 2.4772% 3.0748%
April 2, 2021 3.2685% 2.5124% 3.0836%
March 26, 2021 3.2349% 2.4744% 3.1351%
March 19, 2021 3.2498% 2.4847% 3.121%
March 12, 2021 3.2113% 2.478% 3.0556%
March 5, 2021 3.177% 2.5039% 3.0069%
February 26, 2021 3.1354% 2.4766% 2.9649%
February 19, 2021 2.96% 2.3984% 2.9411%
February 12, 2021 2.8176% 2.326% 2.9538%
February 5, 2021 2.8443% 2.3341% 2.9936%
January 29, 2021 2.8563% 2.3558% 2.987%
January 22, 2021 2.882% 2.3615% 2.9789%
January 15, 2021 2.9014% 2.3873% 2.8973%
January 8, 2021 2.8892% 2.3371% 2.9467%
January 1, 2021 2.8836% 2.3752% 3.0093%
December 25, 2020 2.9157% 2.3766% 3.0604%
December 18, 2020 2.8647% 2.3951% 3.0465%
December 11, 2020 2.9206% 2.388% 3.0107%
December 4, 2020 2.9054% 2.3927% 3.0194%
November 27, 2020 2.9241% 2.4139% 3.0238%
November 20, 2020 2.957% 2.4688% 3.0289%
November 13, 2020 3.016% 2.4965% 3.043%
November 6, 2020 3.067% 2.6254% 3.0348%
October 30, 2020 3.0139% 2.5802% 3.0414%
23 october 2020 3.0347% 2.5643% 3.0624%
October 16, 2020 3.0241% 2.5456% 3.1009%
October 9, 2020 3.0351% 2.5519% 3.1037%
October 2, 2020 3.0841% 2.5902% 3.1091%
Sep 25, 2020 3.0145% 2.4811% 2.8943%
Sep 18, 2020 3.0074% 2.476% 3.0491%
September 11, 2020 3.0572% 2.558% 3.3357%
Sep 4, 2020 3.0614% 2.548% 3.3231%
August 28, 2020 3.0669% 2.604% 3.3604%
Aug 21, 2020 3.0297% 2.6399% 3.3675%
August 14, 2020 3.1116% 2.6404% 3.3231%
August 7, 2020 3.0762% 2.6611% 3.2799%
Jul 31, 2020 3.0925% 2.7354% 3.2972%
Jul 24, 2020 3.1338% 2.7153% 3.1864%
Jul 17, 2020 3.137% 2.7182% 3.1879%
Jul 10, 2020 3.2017% 2.7193% 3.1027%
Jul 3, 2020 3.2619% 2.794% 3.1127%
June 26, 2020 3.326% 2.862% 3.1559%
June 19, 2020 3.4066% 2.8558% 3.18%
June 12, 2020 3.3991% 2.8316% 3.1724%
June 5, 2020 3.4524% 2.8229% 3.1784%
May. 29, 2020 3.5739% 2.8811% 3.2745%
May. 22, 2020 3.5388% 2.8977% 3.3191%
May. 15, 2020 3.5603% 30006% 3.3092%
May. 8, 2020 3.5426% 3.1504% 3.3308%
May. January 1, 2020 3.5319% 3.0592% 3.3539%
April 24, 2020 3.5718% 3.1452% 3.3791%
April 17, 2020 3.5647% 3.0936% 3.3717%
April 10, 2020 3.7339% 3.2267% 3.4885%
April 3, 2020 3.8591% 3.3007% 3.3479%
March 27, 2020 3.7897% 3.2868% 3.4346%
March 20, 2020 3.9845% 3.1977% 3.3982%
March 13, 2020 3.8317% 3.0446% 3.4104%
March 6, 2020 3.6886% 3.0459% 3.4584%
February 28, 2020 3.6568% 3.1494% 3.6011%
February 21, 2020 3.7018% 3.1873% 3.6614%
February 14, 2020 3.5968% 3.1091% 3.4967%
February 7, 2020 3.6182% 3.1215% 3.3167%
January 31, 2020 3.6646% 3.1607% 3.3772%
January 24, 2020 3.7687% 3.2291% 3.4214%
January 17, 2020 3.807% 3.2449% 3.4365%
January 10, 2020 3.7381% 3.2755% 3.9618%
January 3, 2020 3.8629% 3.4113% 3.5016%

Rates as of Tuesday, December 15, 2020

These average rates are based on information on weekday mortgage rates provided by national lenders to Bankrate.com, which is owned by the same parent company as NextAdvisor. These average market rates for a variety of refinance loan types are updated daily, although it is possible that the rates have changed since the last update.

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