Today’s Mortgage Rates & Trends, May 19, 2021

Portrait of young couple in front of new home
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Avoiding any sharp movements, interest rates for most major home loan types fell very slightly or held steady in good news for house hunters and those contemplating a mortgage refinancing. 

The average rate on a 30-year fixed mortgage—the mortgage of choice for most homebuyers—fell to 3.25% from 3.26% the previous business day, while for 15-year fixed mortgages, it dipped to 2.45% from 2.49%. Most other rates for buying and refinancing homes dropped only a tad or stayed flat, a lack of change mirrored in closely linked 10-year Treasury yields.

Treasury yields, heavily influenced by inflation fears, were little changed Tuesday. Last week they rose to a one-month high after the Bureau of Labor Statistics said consumer prices jumped the most in 12 years in April. Freddie Mac said the accelerating inflation rate may lead to higher mortgage rates in the summer, and Fannie Mae is predicting mortgage rates will rise a tenth of a percentage point each quarter for the rest of the year. 

Rates on fixed mortgages have ticked up from the record lows reached this winter (2.65% for 30-year and 2.16% for 15-year, according to Freddie Mac’s measure) but they are still quite affordable by historic standards. (In the decade leading up to the onset of the pandemic, for instance, the 30-year often stayed between 3.5% and 4.5%.) The low rates have bolstered buying power during the pandemic, allowing house hunters to buy more expensive homes with the same monthly budget and helping to fuel a fiercely competitive residential real estate boom.

Important

Mortgage rates, like the rates on any loan, are going to depend on your credit score, with lower rates going to people with better scores, all else being equal. The rates shown reflect the average offered by more than 200 of the country’s top lenders, assuming the borrower has a FICO credit score of 700-759 (within the “good” or “very good” range) and a loan-to-value ratio of 80%.

30-Year Mortgage Rates Fall or Stay Flat

A 30-year fixed mortgage is by far the most common type of mortgage because it offers a consistent and relatively low monthly payment. (Shorter-term fixed mortgages have higher payments because the borrowed money is paid back more quickly.) 

Besides conventional 30-year mortgages, some are backed by the Federal Housing Authority or the Department of Veterans Affairs. FHA loans offer borrowers with lower credit scores or a smaller down payment a better deal than they might otherwise get; VA loans let current or past members of the military and their families skip a down payment.

  • 30-year fixed: The average fell to 3.25%, down from 3.26% the previous business day. A week ago, it was 3.23%. For every $100,000 borrowed, monthly payments would cost approximately $435.21, about $1.10 more than a week ago.
  • 30-year fixed (FHA): The average stayed at 3.08%, the same as the previous business day. A week ago, it was 3.14%. For every $100,000 borrowed, monthly payments would cost approximately $425.93, about $3.26 less than a week ago.
  • 30-year fixed (VA): The average fell to 3.1%, down from 3.12% the previous business day. A week ago, it was 3.18%. For every $100,000 borrowed, monthly payments will cost approximately $427.02, about $4.35 less than a week ago.

Tip

A lower rate can lower your monthly payment, but it can also give you more buying power, something you’ll want if you’re considering jumping into this fiercely competitive real estate market. For example, at 3%, your payments for a $380,000 home would be about $1,899 a month, assuming a 20% down payment, typical homeowners’ insurance costs, and property taxes, per our mortgage calculator. If you lock in a rate at 2.9%, though, you’ll have the same monthly payment for a $383,500 home.

15-Year Mortgage Rate Falls

The major advantage of a 15-year fixed mortgage is that it offers a lower interest rate than the 30-year and you’re paying off your loan more quickly, so your total borrowing costs are far lower. But for the same reason—that the loan is paid back over a shorter time frame—the monthly payments will be higher.

  • 15-year fixed: The average rate fell to 2.45% from 2.49% the previous business day. A week ago, it was 2.45%. For every $100,000 borrowed, monthly payments would cost approximately $664.44, the same as a week ago.

Note

Besides fixed-rate mortgages, there are adjustable-rate mortgages (ARMs), where rates change based on a benchmark index tied to Treasury bonds or other interest rates. Most adjustable-rate mortgages are actually hybrids, where the rate is fixed for a period of time and then adjusted periodically. For example, a common type of ARM is a 5/1 loan, which has a fixed rate for five years (the “5” in “5/1”) and is then adjusted every one year (the “1”).

Jumbo Mortgage Rates Are Unchanged

Jumbo loans, which allow you to borrow bigger amounts for more expensive properties, tend to have slightly higher interest rates than loans for more standard amounts. Jumbo means over the limit that Fannie Mae and Freddie Mac are willing to buy from lenders, typically $548,250 for a single-family home (except in Hawaii, Alaska, and a few federally designated high-cost markets, where the limit is $822,375).

  • Jumbo 30-year fixed: The average stayed at 3.54%, the same as the previous business day. A week ago, it was 3.51%. For every $100,000 borrowed, monthly payments would cost approximately $451.28, about $1.68 more than a week ago.
  • Jumbo 15-year fixed: The average stayed at 3.16%, the same as the previous business day. A week ago, it was 3.18%. For every $100,000 borrowed, monthly payments would cost approximately $698.30, about $1 less than a week ago.

Refinance Rates Mostly Fall or Stay Flat

Refinancing an existing mortgage tends to be slightly more expensive than getting a new one, especially in a low-rate environment. 

  • 30-year fixed: The average rate to refinance stayed at 3.54%, the same as the previous business day. A week ago, it was 3.5%. For every $100,000 borrowed, monthly payments would cost approximately $451.28, about $2.24 more than a week ago.
  • 15-year fixed: The average rate to refinance fell to 2.65% from 2.68% the previous business day. A week ago, it was 2.65%. For every $100,000 borrowed, monthly payments at that rate will cost approximately $673.87, the same as a week ago.

Methodology

Our rates reflect national averages provided by more than 200 of the country's top lenders the previous business day. They assume a loan-to-value ratio of 80% and a borrower with a FICO credit score of 700 to 759—within the “good” to “very good” range. They’re representative of the rates customers would see in actual quotes from lenders, based on their qualifications, and may vary from advertised teaser rates.