Mortgage News Today: Benchmark Rates Varied

Tuesday, May 25, 2021

Mortgage rates are fluctuating in different directions today. The average 30-year fixed mortgage rate remained unchanged, but the average 15-year fixed mortgage rate increased slightly. The 5/1 adjustable-rate loan (ARM) is the most frequent type of variable-rate mortgage.

Today’s mortgage rates are as follows;

  • 3.09 percent on a 30-year mortgage
  • The current rate on a 15-year fixed mortgage is 2.37 percent.
  • The average rate on a 5/1 ARM is 3.14 percent.

Are You Considering a Refinance?

If you have been thinking about refinancing, there is good news: average rates for 15-year fixed and 30-year fixed refinance loans have dropped. However, mortgages with a shorter period, such as 10-year fixed-rate refinances, did not change.

The current refinance rates are:

  • The average 30-year fixed refinancing rate is 3.13 percent.
  • 2.42 percent for a 15-year refinancing
  • The average 10-year fixed refinancing rate is 2.43 percent.

30-Year Fixed-Rate Mortgage:

The average rate for a 30-year fixed-rate mortgage is 3.09 percent, which is constant from last week.

You can use any online home mortgage calculator to calculate your monthly mortgage payments and play around with extra mortgage payments to get a better idea of how much money you could save. You may also use the mortgage calculator to see how much interest you’ll pay throughout the life of the loan.

15-Year Fixed-Rate Mortgage:

A 15-year fixed mortgage has a median rate of 2.37 percent, up to one basis point from a week earlier. Thus, the monthly payment on a 15-year fixed-rate mortgage is unquestionably higher than the monthly payment on a 30-year fixed-rate mortgage with almost the same interest rate.

However, 15-year loans provide several advantages: You will save thousands of dollars in interest and be able to pay off your debt much sooner.

5/1 Adjustable-Rate Mortgage:

A 5/1 ARM currently has an average rate of 3.14 percent, down two basis points from last week. An ARM is suitable for homeowners who want to sell or refinance their homes before the interest rate changes. If this isn’t the case, their interest rates may end up being much higher once the rate is adjusted.

A 5/1 ARM typically has a lower interest rate for the first five years than a 30-year fixed mortgage. Just bear in mind that your interest rate could rise, and your monthly payment could increase by hundreds of dollars.

Mortgage Rates Trend:

We rely on Bankrate’s data to predict where mortgage rates will go in the future. We’re witnessing low rates, as we’ve never seen before when it comes to mortgage rates. Let’s have a look at the rates in the table below.

  • The 30-year fixed-rate mortgage remains unchanged at 3.09% since last week.
  • The 15-year fixed-rate mortgage increases by 0.01% from last week, reaching 2.37%.
  • The 30-year Jumbo mortgage decreases by 0.01%, reaching 3.10% today.
  • The 30-year mortgage refinances rate decreases by 0.02%, reaching 3.13% today.

There isn’t a single element that influences mortgage rates; instead, there are many of them. Inflation and the unemployment rate are two of the most critical factors. When inflation rises, it usually signifies that mortgage rates are set to increase as well.

Reduced mortgage rates, on the other hand, are usually accompanied by lower inflation. This is because the dollar loses its purchasing power when inflation rises. This scenario drives purchasers away from mortgage-backed securities, lowering prices and necessitating higher yields. Furthermore, higher yields necessitate higher interest rates for borrowers.

In the past, a healthy economy has boosted housing demand. As people sell more properties, the need for mortgages rises, potentially causing rates to rise. However, the inverse is also true: a decline in mortgage demand could suggest a rate cut shortly.

How We Foresee the Next Week’s Rates?

Any adjustments in mortgage rates in the foreseeable future should be minor. For the time being, rates should remain around 3%.

While nothing this week should cause rates to jump or fall dramatically, the unexpected can happen. And the economy still has a long way to go to get back to where it was before the outbreak.