Current mortgage rate of May 11, 2021: rates decline
A number of closely watched mortgage rates have come down today. Both 15-year fixed and 30-year fixed mortgage rates have trended downward. For variable rates, 5/1 variable rate mortgages also declined. Mortgage interest rates are never set in stone, but interest rates are historically low. For this reason, now is a great time for potential buyers to get a fixed rate. Before buying a home, don’t forget to consider your personal needs and financial situation, and shop around with different lenders to find the right one for you.
Here are the mortgage rates for different loan styles
30 year fixed rate mortgages
The 30-year average fixed mortgage interest rate is 3.05%, down 4 basis points from seven days ago. (One basis point equals 0.01%.) Thirty-year fixed rate mortgages are the most common loan term. A 30-year fixed rate mortgage will usually have a lower monthly payment than a 15-year – but usually a higher interest rate. You won’t be able to pay off your home that quickly, and you’ll pay more interest over time, but a 30-year fixed mortgage is a good option if you’re looking to keep your monthly payment down.
15 year fixed rate mortgages
The average rate for a 15-year fixed mortgage is 2.35%, down 3 basis points from seven days ago. Compared to a 30-year fixed mortgage, a 15-year fixed mortgage with the same loan value and the same interest rate will have a higher monthly payment. However, as long as you can afford the monthly payments, a 15 year loan has several advantages. You will usually get a lower interest rate and pay less interest overall because you pay off your mortgage much faster.
5/1 variable rate mortgages
A 5/1 variable rate mortgage has an average rate of 3.07%, a decrease of 4 basis points from the same period last week. With an adjustable rate mortgage, you will usually get a lower interest rate than a 30-year fixed mortgage for the first five years. However, as the rate adjusts to the market rate, you could end up paying more after this period, as stated in your loan terms. If you are planning to sell or refinance your home before the rate changes, an ARM might be meaningful to you. But if it doesn’t, you might be forced to get a much higher interest rate if market rates change.
Mortgage rate trends
We use information collected by Bankrate, which is owned by the same parent company as CNET, to track changes in these daily rates. This table summarizes the average rates offered by lenders nationwide:
Average mortgage interest rates
|30 years fixed||3.05%||3.09%||-0.04|
|Fixed over 15 years||2.35%||2.38%||-0.03|
|30-year jumbo mortgage rate||3.15%||3.26%||-0.11|
|30-year mortgage refinancing rate||3.09%||3.14%||-0.05|
Prices as of May 11, 2021.
How to buy the best mortgage rate
When you’re ready to apply for a loan, you can contact a local mortgage broker or search online. Make sure you think about your current finances and your goals when looking for a mortgage. Specific mortgage interest rates will vary based on factors such as credit rating, down payment, debt-to-income ratio, and loan-to-value ratio. Typically, you want a higher credit score, higher down payment, lower DTI, and lower LTV to get a lower interest rate. The interest rate isn’t the only factor that affects the cost of your home – be sure to factor in additional factors like fees, closing costs, taxes, and discount points as well. Be sure to shop around with multiple lenders – including credit unions and online lenders in addition to local and state banks – to get the loan that’s best for you.
What is the best loan term?
An important thing to keep in mind when choosing a mortgage loan is the length of the loan or the payment schedule. The most common mortgage terms are 15 years and 30 years, although there are also 10, 20 and 40 year mortgages. Another important distinction is between fixed rate and variable rate mortgages. The interest rates for a fixed rate mortgage are set for the term of the loan. Unlike a fixed rate mortgage, the interest rates on a variable rate mortgage are only stable for a certain period of time (usually five, seven, or 10 years). After that, the rate fluctuates annually based on the current interest rate in the market.
When choosing between a fixed rate mortgage and an adjustable rate mortgage, you need to think about how long you plan to live in your home. Fixed rate mortgages might be a better option if you plan to stay in a house for a while. While variable rate mortgages may offer lower interest rates initially, fixed rate mortgages are more stable over time. However, you might get a better deal with an adjustable rate mortgage if you only intend to keep your home for a few years. There is no such thing as a “best” loan term as a rule; it all depends on your goals and your current financial situation. It’s important to do your research and think about what matters to you when choosing a mortgage.