Mortgage and refinance charges in the present day, December 19th, and rate of interest forecast for subsequent week

Today's mortgage and refinance rates

Average mortgage rates fell yesterday, confirming their status as all-time lows.

Since Christmas Day is a public holiday, the next week will be short. And I expect it a quiet one for mortgage rates.

Find and lock a low rate (December 20, 2020)

Mortgage rates
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
+ 0.06%
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 (December 20, 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?

My personal point of view is that mortgage rates need to keep falling. However, they are unlikely to move far in one direction before January 2, 2021.

True, they could go up a bit when Congress finally passes a pandemic relief package. However, current measures seem too limited to provide a real complement. And in any case, most investors will have already acted assuming that one would pass. So I don't expect a large movement in interest rates.

Of course, that's just my personal opinion. I can turn out to be wrong. And there is a risk of higher volatility, likely in 2021. Read on for more information.

At the moment my (updated) personal recommendations are:

LOCK when you approach 7th DaysLOCK when you approach 15th DaysLOCK when you approach 30th DaysHOVER when you approach 45 DaysHOVER when you approach 60 Days

But with so much uncertainty right now, your instincts could easily turn out 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 mentioned earlier that things could get more exciting soon. This is because mortgage rates may be more volatile.

Why? Well, I've already talked about "the pillow". This was created by lenders who had to curb excessive demand for mortgages and refinancing by keeping their interest rates artificially high.

This means that mortgage rates don't always move in line with the markets. Instead of passing changes on, lenders had the luxury of absorbing them.

But the pillow has now lost most of its filling. And soon lenders will be forced to pass on any impairment of the interest rate road to borrowers.

The direction of prices

I expect a quiet few weeks on mortgage rates. This is often the case during the holiday season – without catastrophic events.

In the medium term, I still think that mortgage rates will have to fall further. This is because these rates tend to be low when the economy is in trouble.


And I suspect the pandemic has more problems than is generally recognized. Yes, the terrible damage caused by the first wave has recovered somewhat. But the one we're in now seems at least as bad.

We only see that in the economic figures. But the first signs are another great success. And many believe that vaccines won't lead normal lives until the second half of 2021.

If this dire scenario proves, mortgage rates should continue to fall in the coming months. But we're talking about falls that outweigh the climbs. There will still be periods following good news when it goes up.


Brexit is the UK's exit from the European Union. Currently the two parties are working to find a deal that will allow the UK to retain many trade privileges with the bloc.

If they fail, however, there will be a “no-deal Brexit” on December 31st. This could be so damaging to the global economy that American mortgage rates will come under pressure. The mere prospect of such a result has previously lowered it. Watch the media and this area for updates.

Economic reports next week

When you see the gross domestic product (GDP) numbers being reported, you usually assume they are important. But it probably won't be Tuesday.

That's because they're referring to the third quarter which is now an old story. But that's also because we already had two readings of these particular numbers and each refinement, since the second reading is likely minimal.

Other reports this week include:

Tuesday – GDP. Plus Sales of Existing and New Homes Wednesday – Personal Income and Expenses Thursday – Weekly New Unemployment Insurance Entitlements

Wednesday's income and expense numbers are likely to be the most important.

Find and lock a low rate (December 20, 2020)

Mortgage rates forecast for next week

I expect a quiet week on mortgage rates. Of course you can never be sure of such things. And there will continue to be little ups and downs. But it's hard to imagine what could get them far.

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.

Your part

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 from lender to lender. Boost your credit score. – Even a small bump can make a huge difference to your interest rate and payments. Save the biggest deposit you can. – Lenders want you to have real skin in this game of your other modest borrowings – The lower your other monthly commitments, 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 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.

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