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A number of principal mortgage rates slid downward today. 15-year fixed and 30-year fixed mortgage rates both slumped. We also saw a reduction in the average rate of 5/1 adjustable-rate mortgages. Although mortgage rates are always moving, they are quite low right now. Because of this, right now is a great time for prospective homebuyers to get a fixed rate. Before you buy a house, remember to take into account your personal needs and financial situation, and shop around for various lenders to find the best one for you.

Check out mortgage rates that meet your distinct needs

30-year fixed-rate mortgages

For a 30-year, fixed-rate mortgage, the average rate you’ll pay is 3.07%, which is a decline of 6 basis points as seven days ago. (A basis point is equivalent to 0.01%.) The most frequently used loan term is a 30-year fixed mortgage. A 30-year fixed rate mortgage will usually have a smaller monthly payment than a 15-year one — but often a higher interest rate. You won’t be able to pay off your house as quickly and you’ll pay more interest over time, but a 30-year fixed mortgage is a good option if you’re looking to minimize your monthly payment.

15-year fixed-rate mortgages

The average rate for a 15-year, fixed mortgage is 2.38%, which is a decrease of 5 basis points compared to a week ago. Compared to a 30-year fixed mortgage, a 15-year fixed mortgage with the same loan value and interest rate will have a higher monthly payment. However, if you’re able to afford the monthly payments, there are several benefits to a 15-year loan. You’ll usually get a lower interest rate, and you’ll pay less interest in total because you’re paying off your mortgage much quicker.

5/1 adjustable-rate mortgages

A 5/1 ARM has an average rate of 3.08%, a downtick of 5 basis points compared to last week. For the first five years, you’ll typically get a lower interest rate with a 5/1 ARM compared to a 30-year fixed mortgage. But you may end up paying more after that time, depending on the terms of your loan and how the rate adjusts with the market rate. If you plan to sell or refinance your house before the rate changes, an ARM could make sense for you. Otherwise, changes in the market means your interest rate could be significantly higher once the rate adjusts.

Mortgage rate trends

We use data collected by Bankrate, which is owned by the same parent company as CNET, to track rates changes over time. This table summarizes the average rates offered by lenders nationwide:

Average mortgage interest rates

Product Rate Last week Change
30-year fixed 3.07% 3.13% -0.06
15-year fixed 2.38% 2.43% -0.05
30-year jumbo mortgage rate 2.87% 3.33% -0.46
30-year mortgage refinance rate 3.14% 3.20% -0.06

Rates as of July 7, 2021.

How to shop for the best mortgage rate

You can get a personalized mortgage rate by connecting with your local mortgage broker or using an online calculator. Make sure to consider your current financial situation and your goals when looking for a mortgage. Specific mortgage rates will vary based on factors including credit score, down payment, debt-to-income ratio and loan-to-value ratio. Having a good credit score, a higher down payment, a low DTI, a low LTV, or any combination of those factors can help you get a lower interest rate. Aside from the mortgage interest rate, other costs including closing costs, fees, discount points and taxes might also affect the cost of your house. Be sure to talk to several different lenders — for example, local and national banks, credit unions and online lenders — and comparison shop to find the best mortgage loan for you.

How does the loan term impact my mortgage?

One important consideration when choosing a mortgage is the loan term, or payment schedule. The loan terms most commonly offered are 15 years and 30 years, although you can also find 10-, 20- and 40-year mortgages. Mortgages are further divided into fixed-rate and adjustable-rate mortgages. The interest rates in a fixed-rate mortgage are set for the duration of the loan. Unlike a fixed-rate mortgage, the interest rates for an adjustable-rate mortgage are only set for a certain amount of time (most frequently five, seven or 10 years). After that, the rate adjusts annually based on the market rate.

When choosing between a fixed-rate and adjustable-rate mortgage, you should take into consideration the length of time you plan to stay in your house. Fixed-rate mortgages might be a better fit if you plan on living in a home for a while. While adjustable-rate mortgages might have lower interest rates upfront, fixed-rate mortgages are more stable in the long term. However you could get a better deal with an adjustable-rate mortgage if you only intend to keep your home for a couple years. The best loan term is entirely dependent on an individual’s situation and goals, so be sure to think about what’s important to you when choosing a mortgage.

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