Today’s mortgage and refinance rates
Average mortgage rates rose yesterday — and over the week. However, the changes have been tiny, with rises and falls continuing to very nearly cancel each other out.
And that may well hold over the next seven days. Because mortgage rates next week may continue to change very little. There’s very little on my radar that’s likely to push them far. And it would take something major and unexpected to move them out of the doldrums.
Next Monday is Labor Day. And markets will be closed. So we’ll be back on Tuesday.
Current mortgage and refinance rates
|Conventional 30 year fixed||2.811%||2.811%||Unchanged|
|Conventional 15 year fixed||1.991%||1.991%||Unchanged|
|Conventional 20 year fixed||2.49%||2.49%||Unchanged|
|Conventional 10 year fixed||1.879%||1.924%||+0.02%|
|30 year fixed FHA||2.688%||3.343%||Unchanged|
|15 year fixed FHA||2.399%||2.999%||+0.01%|
|5/1 ARM FHA||2.5%||3.207%||Unchanged|
|30 year fixed VA||2.25%||2.421%||Unchanged|
|15 year fixed VA||2.25%||2.571%||Unchanged|
|5/1 ARM VA||2.5%||2.386%||Unchanged|
|Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions here.|
COVID-19 mortgage updates: Mortgage lenders are changing rates and rules due to COVID-19. To see the latest on how coronavirus could impact your home loan, click here.
Should you lock a mortgage rate today?
The period during which mortgage rates have barely moved is stretching into several weeks. And there are no obvious drivers that are currently likely to end it. But, of course, it must end at some time.
And, when it does, those rates are more likely to rise than fall, according to just about every expert. So, given that you’re not gaining much by floating, my general advice is to lock your rate soon. Of course, the good news is that they’re currently stuck at historically low levels.
So my personal recommendations remain:
- LOCK if closing in 7 days
- LOCK if closing in 15 days
- LOCK if closing in 30 days
- FLOAT if closing in 45 days
- FLOAT if closing in 60 days
However, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So be guided by your gut and your personal tolerance for risk.
What’s moving current mortgage rates
I can only repeat what I said last week: “Mortgage rates remain becalmed. They continue to drift up and down but barely move when measured over weeks.”
But, last week, there was a small possibility that yesterday’s jobs report would finally blow mortgage rates out of their becalmed waters. Of course, as it turned out, it didn’t.
And this week there are even fewer threats. There are no influential economic reports or Federal Reserve meetings on the calendar. So the chances of these rates suddenly taking off are even smaller than previously.
Of course, that doesn’t mean there’s zero chance of something momentous emerging during the week that moves mortgage rates decisively. It’s merely unlikely.
Economic reports next week
After some potentially momentous (but ultimately uneventful) weeks, we’re finally in for a quiet seven days, at least as far as economic reports are concerned. Indeed, there’s nothing at all on Monday (Labor Day) and Tuesday. Investors are sensitive about inflation data at the moment, so it’s just possible that Friday’s producer price index will pique their interest.
None of the economic reports listed below is likely to cause much movement in markets unless it includes shockingly good or bad data. Moreover, regular readers will know that investors have been ignoring most economic reports in recent months. So the effects of the following may be different from usual:
- Wednesday — July job openings
- Thursday — Weekly new claims for unemployment insurance to Sept. 4.
- Friday — August producer price index
With luck, next week will be boring.
Mortgage interest rates forecast for next week
Once again, I reckon that mortgage rates next week will be unchanged or barely changed. That’s not a guarantee. But it does seem the most likely scenario.
Mortgage and refinance rates usually move in tandem. And a gap that had grown between the two has been largely eliminated by the recent scrapping of the adverse market refinance fee.
How your mortgage interest rate is determined
Mortgage and refinance rates are generally determined by prices in a secondary market (similar to the stock or bond markets) where mortgage-backed securities are traded.
And that’s highly dependent on the economy. So mortgage rates tend to be high when things are going well and low when the economy’s in trouble.
But you play a big part in determining your own mortgage rate in five ways. And you can affect it significantly by:
- Shopping around for your best mortgage rate — They vary widely from lender to lender
- Boosting your credit score — Even a small bump can make a big difference to your rate and payments
- Saving the biggest down payment you can — Lenders like you to have real skin in this game
- Keeping your other borrowing modest — The lower your other monthly commitments, the bigger the mortgage you can afford
- Choosing your mortgage carefully — Are you better off with a conventional, FHA, VA, USDA, jumbo or another loan?
Time spent getting these ducks in a row can see you winning lower rates.
Remember, it’s not just a mortgage rate
Be sure to count all your forthcoming homeownership costs when you’re working out how big a mortgage you can afford. So focus on your “PITI.” That’s your Principal (pays down the amount you borrowed), Interest (the price of borrowing), (property) Taxes, and (homeowners) Insurance. Our mortgage calculator can help with these.
Depending on your type of mortgage and the size of your down payment, you may have to pay mortgage insurance, too. And that can easily run into three figures every month.
But there are other potential costs. So you’ll have to pay homeowners association dues if you choose to live somewhere with an HOA. And, wherever you live, you should expect repairs and maintenance costs. There’s no landlord to call when things go wrong!
Finally, you’ll find it hard to forget closing costs. You can see those reflected in the annual percentage rate (APR) you’ll be quoted. Because that effectively spreads them out over your loan’s term, making that higher than your straight mortgage rate.
But you may be able to get help with those closing costs and your down payment, especially if you’re a first-time buyer. Read:
Mortgage rate methodology
The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The result is a good snapshot of daily rates and how they change over time.
Mortgage Rates Today, Sept. 4 & Rate Forecast For Next Week is written by Peter Warden for themortgagereports.com