Today's mortgage and refinance rates
Average mortgage rates rose yesterday. There have been a lot of little daily ups and downs lately. But they generally canceled each other out. And Freddie Mac's weekly averages haven't changed at all in the last three reports.
Of course, there is always the possibility that interest rates will rise or fall suddenly and sharply. But it's hard to come up with a reason why they should this week. And that means the chances of your rate fluctuating further may be less than normal. But it also means that the potential rewards for doing so may also be lower.
Monday is President's Day. And the US markets are closed. So our daily report will be back on Tuesday.
Find and Lock a Low Rate (Feb 13, 2021)
Conventional 30 years fixed
Conventional 15 years fixed
Conventional set 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 (Feb 13, 2021)
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 I were to fluctuate my rate right now, I would probably lock it today or soon. There are two reasons. First, the possibility of a sudden, sharp spike never goes away, although it currently seems unlikely.
Second, the chances that I can gain a lot by floating further seem too slim to make the gambling worthwhile. Of course, there is always the possibility of a sudden fall. But it's about as unlikely as a sudden surge.
So my recommendation is to Lock if you close within 30 days of closing.
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
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 have already established that current mortgage rates are not moving much. You hardly move.
Of course, one day they will break out decisively. But exactly when cannot be foreseen. Even the direction in which they will go is uncertain.
Risk of major falls
The S&P 500 and Nasdaq stock indices closed at record highs yesterday. It has long been clear that the stock market in general is increasingly disconnected from economic reality.
Of course, those entering these markets would argue that they have a bright future in the medium or long term. But they have lousy records as fortune tellers. Current highs in the markets are based on "Trust," a code of faith-based trading.
Stock market overvalued?
Also yesterday, the Federal Reserve Board revealed the "hypothetical scenarios for its 2021 bank stress tests". And they included "sharply falling asset prices, including a 55 percent drop in stock prices".
Obviously, the Fed is not forecasting a 55% drop in share prices. However, the possibility of a significant decline is being taken seriously enough to have banks demonstrate that they can survive such an event.
And such a decline would likely lower mortgage rates. Those who got out of the stock market would have to put their remaining money somewhere. And they want to buy safe or safer assets, including US Treasuries and mortgage-backed securities. Such additional demand would drive prices up, which, as a mathematical certainty, would lower yields and mortgage rates.
And those lower rates don't depend on a stock market slump. They usually come with economic problems, which is why they are so low right now. So a deterioration in the economy could lead to lower mortgage rates even if the stock market continues to defy gravity.
Risk of big climbs
Most economists believe the economy will improve as the vaccination spurt gains momentum and the pandemic subsides. And that should bring higher mortgage rates. This is probably the most likely scenario right now.
However, it could be months before a solid uptrend emerges. And even then, it can be gradual. However, there is inevitably the possibility that this will not happen at all.
For example, COVID-19 already has several mutations. And, if a future were to prove vaccine-resistant, it could undermine or slow economic recovery, which would likely result in lower mortgage rates.
All of this is a detour to say that the future is even less certain than normal. And we may one day look back on that time when mortgage rates were calmed with tender nostalgia.
Economic reports next week
Next week's big economic report is retail sales on Wednesday. The others would have to be amazingly good or bad to move mortgage rates far.
Here are next week's key economic reports:
Retail sales Wednesday through January as well as industrial production and capacity utilization. Also January producer price index, a predictor of inflation Thursday – Weekly new claims for unemployment insurance. Plus January starts and housing permits Friday – January existing home sales
Perhaps more important than these economic reports are any legislative advances or setbacks caused by the government's $ 1.9 trillion pandemic relief package currently on its way through Congress. Success can mean higher rates, failure lower.
Find and Lock a Low Rate (Feb 13, 2021)
Mortgage rates forecast for next week
Just like the past few weeks, there is little reason to expect major changes in mortgage rates this week. You will likely just be moving up and down a little further and not going anywhere fast.
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 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. 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 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.