Today's mortgage and refinance rates
Average mortgage rates were flat yesterday. Turns out I was right last Saturday when I predicted mortgage rates could go up slightly this week. But it was a close thing.
Since mid-March there has been a pause in the inexorable rises in these rates in 2021. Will that end after yesterday's excellent employment report? Maybe. But i expect Mortgage rates are unlikely to move much next week. However, further increases are likely to occur very soon.
Find and lock a low rate (April 3, 2021)
Current mortgage and refinancing rates
Conventional set for 30 years
Conventional 15 years fixed
Conventional set for 20 years
Conventional 10 years fixed
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 (April 3, 2021)
COVID-19 Mortgage Updates: Mortgage lenders are changing interest rates and rules due to COVID-19. For the latest information on how coronavirus is affecting your home loan, click here.
Should You Lock A Mortgage Rate Today?
I would lock my plan ASAP if I were to buy a home right now. That's because I suspect the current lull in mortgage rate hikes will prove to be temporary. And I see only a few reasons to hope for notable falls soon. (More below.)
So my recommendations remain:
LOCK when you approach 7th DaysLOCK when you approach 15th DaysLOCK when you approach 30th DaysLOCK when you approach 45 DaysLOCK 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?
Deciding when to freeze your mortgage rate is about probabilities. Nobody knows what will happen in the future. So you need to assess what you think is the most likely. And what impact this is likely to have on mortgage rates.
If you wish, you can take into account the opinions of commentators like me who have been watching mortgage rates on a daily basis for years. But we are far from infallible. And the final judgment must be yours.
I think the most likely scenario right now is that mortgage rates will continue to rise. Of course, sometimes, and occasionally for days, they fall on a plateau. But I think the general trend is likely to go up.
My reasons are the same as in 2021. The prospect of an economic recovery and a boom. And the fear of future inflation that such a boom brings with it. In the past, both of them pretty much got higher and higher rates.
But of course there are alternative scenarios. For example, suppose a vaccine-resistant variant of the SARS-CoV-2 virus emerges and kills the recovery. Or imagine the effects of a stock market collapse when enough investors decide to poke a bubble. Both (and there are others) would likely cause mortgage rates to fall, perhaps back to all-time new lows.
So we come back to your assessment of the probabilities. How likely are the doomsday scenarios compared to the expected boom? And, more importantly, how likely is it that it will occur before you have to close?
Economic reports next week
Unusually, we can start a hangover next week from this week onwards. The very important report on the employment situation in March was published yesterday. But most of the markets were closed for Good Friday and had no chance of responding. The numbers contained therein were much better than expected. So Monday can start badly for mortgage rates.
Most of the new reports for the next week are relatively unimportant. And the markets could shake them off. However, even smaller reports can move markets if they contain surprising and unexpected news.
It's worth noting that the Federal Reserve will release the minutes of the final meeting of its Federal Open Market Committee on Wednesday afternoon. This is his central political committee. And investors always study these protocols carefully – and can react to their contents.
Here are next week's key economic reports:
Monday – March Service Sector Reports from Markit and the Institute of Utility Management (ISM) Wednesday – FOMC Protocol (see above) Thursday – Weekly New Unemployment Insurance Claims Friday – March Producer Price Index. This is a measure of future inflation, which is a hot topic right now
Typically, the markets react to unexpectedly good news with higher mortgage rates. You usually see lower rates when the numbers are bad. But it takes a lot to get them far.
Find and lock a low rate (April 3, 2021)
Mortgage rates forecast for next week
Could the recent lull in mortgage rate hikes last into next week? I think it can. So that's what I predict Mortgage rates could hardly move in the next seven days. But I still expect more climbs soon.
Mortgage and refinance rates usually move together. Note, however, that refinancing rates are currently slightly higher than those for purchase mortgages. This gap will likely stay pretty constant as it changes.
Meanwhile, a recent change in regulations has made most investment property and vacation home mortgages more expensive.
How is your mortgage rate determined?
Mortgage and refinancing rates are generally determined by the prices on a secondary market (similar to 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 from lender to lender. Boost your credit score. – Even a small bump can make a big 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 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?
The time you spend getting these ducks in a row can result in you winning lower rates.
Remember, it's not just a mortgage rate
Take into account all of your upcoming home ownership costs when figuring out what a mortgage you can afford. 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 amount 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 homeowners association membership fees if you choose to live with an HOA anywhere. 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 have a hard time forgetting about closing costs. You can see this in the Annual Percentage (APR) you provide. 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 this is your first time buyer. Read:
Down payment assistance programs in each state for 2021
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.