Today’s mortgage and refinance rates: October 30, 2021 | Fixed rates still relatively low

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Today's mortgage and refinance rates in yellow

Fixed mortgage rates have been inching upward, but they’re still at historic lows overall.

Mortgage rates are low in general today, and they will probably stay low for the rest of 2021. Fixed mortgage rates have been getting a little higher over the last six weeks, but 30-year rates are still hovering around 3.5%.

Mortgage rates tend to be low when the economy is struggling, and the coronavirus pandemic continues to hurt the US economy.

There are signs that the economy is improving. Inflation increased by 0.4% from August to September, which was more aggressive than many economists expected. However, the US added almost 200,000 fewer jobs in September than predicted.

The economy – especially employment numbers – need to make greater strides for buyers to see long-term, significant increases in mortgage rates.

Today’s mortgage and refinance rates

Today’s mortgage rates

Mortgage typeAverage rate today
15-year fixed2.57%
30-year fixed3.47%
7/1 ARM3.42%
10/1 ARM3.6%
30-year FHA2.66%
VA mortgage loan2.75%

Conventional rates from; government-backed rates from RedVentures.

Today’s refinance rates

Mortgage typeAverage rate today
15-year fixed2.67%
30-year fixed3.62%
7/1 ARM3.69%
10/1 ARM4.04%
30-year FHA2.70%
VA mortgage loan2.79%

Conventional rates from; government-backed rates from RedVentures.

How do mortgage rates work?

A mortgage interest rate is the fee a lender charges for borrowing money, expressed as a percentage. For example, you get a mortgage for $300,000 with an interest rate of 2.5%.

Mortgage rates can be either fixed or adjustable. A fixed-rate mortgage keeps your rate the same for the entire length of your loan. An adjustable-rate mortgage locks in your rate for the first few years or so, then changes it periodically. With a 7/1 ARM, your rate would stay steady for the first seven years, then shift annually.

Compared to a year ago, ARMs and 15-year fixed-rate mortgages have become more attractive to investors relative to 30-year fixed-rate loans. This investor appetite has likely helped drive some of the improvement in ARM rates in 2021, along with the significant impact of the economy’s stabilization. Robert Heck, vice president of mortgage at Morty

The longer your mortgage term, the higher your rate will be. For instance, you’ll pay more on a 30-year mortgage than a 15-year mortgage. Longer terms do come with lower monthly payments, though, because you’re spreading out the repayment process.

How do I get the best mortgage rate?

Here are a few steps you can take to get the lowest mortgage rate possible:

  • Consider fixed vs. adjustable rates. You may be able to get a lower introductory rate with an adjustable-rate mortgage, which can be good if you plan to move before the intro period ends. But a fixed rate could be better if you’re buying a forever home because you won’t risk your rate going up later. Look at the rates your lender offers and weigh your options.
  • Look at your finances. The stronger your financial situation, the lower your mortgage rate should be. Look for ways to boost your credit score or lower your debt-to-income ratio, if necessary. Saving for a higher down payment also helps.
  • Choose the right lender. Each lender charges different mortgage rates. Picking the right one for your financial situation will help you land a good rate.

How do I choose a mortgage lender?

First, think about what type of mortgage you want. The best mortgage lender will be different for an FHA mortgage than for a VA mortgage.

A lender should be relatively affordable. You shouldn’t need a super high credit score or down payment to get a loan. You also want it to offer good rates and charge reasonable fees.

Once you’re ready to start shopping for homes, apply for preapproval with your top three or four choices. A preapproval letter states that the lender would like to lend you up to a certain amount, at a specific interest rate. When you’re preapproved, your mortgage rate is locked in for 60 to 90 days. With a few preapproval letters in hand, you can compare each lender’s offer.

When you apply for preapproval, a lender does a hard credit inquiry. A bunch of hard inquiries on your report can hurt your credit score – unless it’s for the sake of shopping for the best rate.

If you limit your rate shopping to a month or so, credit bureaus will understand that you’re looking for a home and shouldn’t hold each individual inquiry against you.

Related Content Module: More Mortgage Coverage

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