Today's mortgage and refinance rates
Average mortgage rates were just a touch lower yesterday. And traditional loans today start at 3.063% (3.063% APR) for a 30-year fixed-rate mortgage.
The last week started badly for these rates with a small increase. But they soon recovered and are a little lower than a week ago.
I expect the next seven days to be just as good Mortgage rates will fall again next week. But no one can be sure about this stuff.
Find and Lock a Low Rate (Nov 28, 2020)
Conventional 30 years fixed
Conventional 15 years fixed
Conventional 5-year ARM
Fixed FTA for 30 years
Fixed FTA for 15 years
5 years ARM FHA
30 years permanent VA
15 years fixed VA
5 years ARM VA
Prices are provided by our partner network and may not reflect the market. Your rate could be different. Click here for a personalized price offer. See our tariff assumptions here.
Find and Lock a Low Rate (Nov 28, 2020)
COVID-19 Mortgage Updates: Mortgage lenders are changing interest rates and rules due to COVID-19. For the latest information on the impact of Coronavirus on your home loan, click here.
Should You Lock A Mortgage Rate Today?
Depending on the type of mortgage you have, you may be staring at an all-time low. Nobody can blame you for seizing the moment and banning you today.
But I probably wouldn't unless I were a few weeks or less away from graduation. That's because I think there might be more small falls ahead. However, these are almost inevitably interrupted by periods of rise which I hope will prove to be short and small.
But the rewards of waiting could be modest. And the risk of some amazing news reversing the trend never goes away.
So the decision may have more to do with your personal willingness to take risks than with a rational analysis.
But right now my personal recommendations are:
LOCK when you approach 7th DaysLOCK when you approach 15th DaysHOVER when you approach 30th DaysHOVER when you approach 45 DaysHOVER when you approach 60 Days
With so much uncertainty right now, however, your instincts could easily prove to be as good as mine – or better. So let your gut and your personal risk tolerance guide you.
What is driving current mortgage rates?
I still think the most likely scenario for mortgage rates is for them to move Lower slowly and gently – with occasional and short climbs. That goes for next week and beyond.
However, you should not rely on my opinion for two reasons. First, unexpected messages can pop up at any time. For example, we just had encouraging vaccine announcements on three consecutive Mondays. Second, investors often perceive reality differently than we normal people.
It's hard to overstate how badly the US has been hit by COVID-19. It killed more than 270,000 Americans and infected 13.4 million. NBC News reported, "More than 1.2 million people in the US contracted Covid-19 in the week leading up to Thanksgiving, almost twice as many as more than 635,000 new cases three weeks earlier."
And those transmission rates (and later hospitalization and death rates) are likely to rise again after Thanksgiving. More than a million Americans flew on vacation and many more drove to family gatherings where social distancing may not have been practiced.
Some are optimistic that vaccines will soon reduce the effects of the coronavirus. But during the week I quoted the forecast by management consultancy McKinsey & Co about how quickly these could have a significant impact:
The positive results of the vaccine trials mean the United States will most likely reach an epidemiological end to the pandemic (herd immunity) in the third or fourth quarter of 2021.
– McKinsey & Company, When does the COVID-19 Pandemic end ?, November 23, 2020
And that's when these vaccines overcome all regulatory frameworks and overcome all logistical hurdles that stand in their way. It is equally important that enough Americans agree to the vaccination. So we are not only facing a harsh winter, but also a similarly difficult spring and summer – and maybe even an autumn.
Pandemic and economy
Investors are people too. But when it comes to their professional lives, it is the economic rather than the personal impact of the pandemic that bothers them the most.
And weekly unemployment insurance claims have risen again in the last two reports. In the meantime, it's hard to see how the inevitable anti-coronavirus restrictions imposed by governors and mayors won't soon affect other aspects of the economy.
Mortgage rates are almost always low during times of economic stress and rise when the nation is thriving. Because of this, I expect further rate cuts in the foreseeable future.
Economic reports next week
Friday is the big day in next week's economic report. At this point the monthly employment report will be published. Investors often view this as the most important release of all. And they will look at the number of jobs created or lost in November, as well as the unemployment rate.
Other important reports are:
Tuesday – Institute of Utilities Management (ISM) Manufacturing Purchasing Managers Index (ISM) Wednesday – ADP Employment Report – Sometimes viewed as a leitmotif for Friday's official Employment Situation Report Thursday – Weekly new unemployment insurance claims. Plus the PMI of the ISM for the service sector
Some of them are already out of date at the time of their publication. The current wave of COVID-19 infections increased enormously in the second half of November and made the measurements for the first half superfluous.
Find and Lock a Low Rate (Nov 28, 2020)
Mortgage rates forecast for next week
I expect the next seven days to be another quiet good week for mortgage rates. Sharp falls or climbs seem unlikely. And a continuation of the gentle downtrend seems the most likely scenario, barring some exceptionally good news.
However, as is becoming more and more apparent, there are major and highly unpredictable events at play right now. So there are no guarantees.
Mortgage and refinance rates usually move together. Note, however, that refinancing rates are currently slightly higher than those for purchase mortgages. This gap is likely to remain constant as it changes.
How is your mortgage rate determined?
Mortgage and refinancing rates are generally determined by the prices on a secondary market (similar to the stock or bond markets) where mortgage-backed securities are traded.
And that depends a lot on the economy. Therefore, mortgage rates are typically high when things are going well and low when the economy is in trouble.
However, they play a huge role in determining your own mortgage rate in five ways. You can significantly affect it by:
Shopping for Your Best Mortgage Rate – They vary widely depending on the lender. Boost Your Credit Score – Even a small bump can make a big difference in your interest rate and payments. Save the biggest deposit you can. – Lenders like you have real skin in this game. Keep Your Other Borrowing Modest – The lower your other monthly obligations, the higher the mortgage you can afford. Choose your mortgage carefully. – Are you better off with a conventional, FHA, VA, USDA, Jumbo, or any other loan?
If you spend these ducks in a row you can win lower rates.
Remember, it's not just a mortgage rate
Take into account all of your upcoming home ownership costs when figuring out what your mortgage can be. So concentrate on your "PITI" P.rincipal (pays out the borrowed amount), Interest (the price of borrowing), (property) T.Axes and (homeowners) IInsurance. Our mortgage calculator can help you with this.
Depending on your type of mortgage and the size of your down payment, you may also need to purchase mortgage insurance. And that can easily reach three digits every month.
But there are other potential costs. So you have to pay the homeowners association membership fees if you want to live anywhere with an HOA. And wherever you live, you should expect repair and maintenance costs. There is no landlord who can call if something goes wrong!
After all, you find it hard to forget about closing costs. These are taken into account in the annual percentage (APR) you specify. Because this effectively spreads it out over the life of your loan and makes it higher than your direct mortgage rate.
However, you may be able to get help with these closing costs and your down payment, especially if you are a first time buyer. Read:
Programs to support advance payments in all federal states for 2020
Mortgage rate method
The mortgage reports receive interest rates based on selected criteria from multiple credit partners on a daily basis. We'll find an average rate and an annual interest rate for each type of loan that we want to show on our chart. Since we calculate a series of average prices, this will give you a better idea of what you might find in the market. We also calculate average interest rates for the same types of loans. For example, FHA was fixed with FHA. The end result is a good snapshot of the daily rates and how they change over time.