Today's mortgage and refinance rates
Average mortgage rates went down yesterday as we predicted. And traditional loans today start at 3.0% (3.0% APR) for a 30-year fixed-rate mortgage.
Mortgage rates have had a good week. Every day except Thursday fell. And also on Thursday, Freddie Mac called his 13th all-time low of the year.
And I hope so more humble falls next week. But the risk of unforeseen events changing my predictions never goes away.
Find and Lock a Low Rate (Nov 21, 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 21, 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?
If you are about to close, today could be a great day to lock out. In fact, it could turn out to be the best ever regardless of your graduation date.
At the moment I would personally only lock on a good day if I was about two weeks before closing. That's because I expect further, if modest, declines in these rates. But these will almost certainly be interrupted by periods when they are higher.
Just be aware that my expectations may be wrong. And in any case, the profits are likely to be modest. So you can rightly choose to block today or soon whenever your closing date is.
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?
We don't see much on the horizon to raise mortgage rates significantly. And most of the likely influences that we perceive are likely to drive them forward Lower slowly and gently – with occasional and short climbs.
However, you should not rely on this scenario for two reasons. First, unexpected news like recent vaccine announcements can pop up at any time. Second, investors often perceive reality differently than we normal people.
Despite continued efforts to question the validity of some election results, most investors have already mentioned the race for former Vice President Joe Biden (or President-elect Joe Biden, if you prefer) on their own mind.
However, they are increasingly aware of the problems that arise from challenges to the outcome. Perhaps most importantly, they see it as a freezing advance in pandemic stimulation measures. However, they are also concerned about how a disrupted transition could affect the economy, particularly the development of measures against COVID-19.
So far, this has likely helped keep mortgage rates down. But there may be a brief increase in those rates caused by relief if the President admits.
Yes, everyone is optimistic about Pfizer and Moderna vaccines. However, experts warn that even if approved this month and others quickly follow suit, it will not have much of an impact on the course of the pandemic for many months.
Part of this is due to delays that are likely to occur in increasing production. That poses real problems. But then there are logistical challenges with the storage and distribution of cans. Pfizer, in particular, needs to be kept at -70 degrees Celsius (-94 degrees Fahrenheit) for most of its shelf life. Finally, there is the difficulty of vaccinating hundreds of millions of people, especially since vaccines usually have to be given in two doses about four weeks apart.
The pandemic is now raging. There were 198,537 new cases yesterday, according to the New York Times. That number has increased 67% in the past 14 days. Hospital stays (plus 50% in this period) and deaths (plus 63%) are close behind.
Unsurprisingly, governors, mayors and other officials are responding to these numbers with increasingly strict rules for people and businesses. And these inevitably have a significant economic impact.
So it wouldn't be a surprise if we were already in a recession. And this is terrible news for everyone except those who want lower mortgage rates.
Economic reports this week
In theory, markets shouldn't be interested in this week's economic reports. After all, who cares what happened in October when the pandemic means it is now completely independent of economic output?
That probably won't stop investors paying attention to this week's reports, however. Anyone doing better than expected could put pressure on mortgage rates, while bad news is more likely to have the opposite effect. Look out for these two, both of which appear on Wednesday:
Second reading of gross domestic product (GDP) for the third quarter of 2020 – not much likely to change. However, this is a huge challenge when it comes to October personal expenses and income. The economists' consensus forecasts for these are + 0.7% and + 0.1% respectively
Obviously, no reports are scheduled for the last two days of this week. But enjoy your Thanksgiving break. We're taking Thursday off. But will be back on Friday.
Find and Lock a Low Rate (Nov 21, 2020)
Mortgage rates forecast for next week
I expect a quiet good week on mortgage rates. Sharp falls or climbs seem unlikely. And a continuation of the gentle downtrend seems the most likely scenario unless President Donald Trump makes concessions.
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 huge difference to your interest rate and payments. Save the biggest deposit you can. – Lenders like you have real skin in this modest borrowing game – 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.