Today’s mortgage rates for July 26, 2021: Rates decrease

Today’s mortgage rates for July 26, 2021: Rates decrease

Today’s mortgage rates for July 26, 2021: Rates decrease

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A variety of major mortgage rates sunk lower today. The average interest rates for both 15-year fixed and 30-year fixed mortgages tumbled down. For variable rates, the 5/1 adjustable-rate mortgage also receded. Although mortgage rates are always changing, they are lower than they’ve been in years. If you plan to buy a house, now might be an excellent time to lock in a fixed rate. But as always, make sure to first take into account your personal goals and circumstances before purchasing a house, and shop around for a lender who can best meet your needs.

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 3.01%, which is a decrease of 2 basis points from one week ago. (A basis point is equivalent to 0.01%.) Thirty-year fixed mortgages are the most common loan term. A 30-year fixed rate mortgage will usually have a lower monthly payment than a 15-year one — but usually a higher interest rate. Although you’ll pay more interest over time — you’re paying off your loan over a longer timeframe — if you’re looking for a lower monthly payment, a 30-year fixed mortgage may be a good option.

15-year fixed-rate mortgages

The average rate for a 15-year, fixed mortgage is 2.31%, which is a decrease of 7 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 bigger monthly payment. However, as long as you’re able to afford the monthly payments, there are several benefits to a 15-year loan. You’ll most likely 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 3.03%, a downtick of 1 basis point compared to last week. You’ll usually get a lower interest rate (compared to a 30-year fixed mortgage) with a 5/1 ARM in the first five years of the mortgage. But since the rate adjusts with the market rate, you might end up paying more after that time, as described in the terms of your loan. Because of this, an ARM might be a good option if you plan to sell or refinance your house before the rate changes. If not, shifts in the market could significantly increase your interest rate.

Mortgage rate trends

We use data 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 across the US:

Current average mortgage interest rates

Loan type Interest rate A week ago Change
30-year fixed rate 3.01% 3.03% -0.02
15-year fixed rate 2.31% 2.38% -0.07
30-year jumbo mortgage rate 2.78% 2.81% -0.03
30-year mortgage refinance rate 2.99% 3.10% -0.11

Updated on July 26, 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. When looking into home mortgage rates, consider your goals and current financial situation. A range of factors — including your down payment, credit score, loan-to-value ratio and debt-to-income ratio — will all affect your mortgage interest rate. Having a higher credit score, a larger down payment, a low DTI, a low LTV, or any combination of those factors can help you get a lower interest rate. The interest rate isn’t the only factor that affects the cost of your home — be sure to also consider other costs such as fees, closing costs, taxes and discount points. You should comparison shop with multiple lenders — like credit unions and online lenders in addition to local and national banks — in order to get a mortgage that works best for you.

How does the loan term impact my mortgage?

One important thing to keep in mind when choosing a mortgage is the loan term, or payment schedule. The most common mortgage terms are 15 years and 30 years, although 10-, 20- and 40-year mortgages also exist. Mortgages are further divided into fixed-rate and adjustable-rate mortgages. The interest rates in a fixed-rate mortgage are fixed 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 (typically five, seven or 10 years). After that, the rate adjusts annually based on the market rate.

When deciding between a fixed-rate and adjustable-rate mortgage, you should consider the length of time you plan to live in your home. For those who plan on staying long-term in a new house, fixed-rate mortgages may be the better option. While adjustable-rate mortgages might offer lower interest rates upfront, fixed-rate mortgages are more stable over time. However you could get a better deal with an adjustable-rate mortgage if you only plan to keep your house for a couple years. The best loan term all depends on your own situation and goals, so be sure to consider what’s important to you when choosing a mortgage.

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