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Mortgage rates for July 28, 2021: Rates inch up

Mortgage rates for July 28, 2021: Rates inch up


Deborah Jaffe/Getty

Several major mortgage rates increased today. The average rates for both the 30-year fixed mortgage and 5/1 adjustable-rate mortgage both went up. On the other hand, average rates for the 15-year fixed mortgage decreased. Mortgage rates are always fluctuating, but they’re currently at an all time low. If you’re looking to buy a home, now might be a good time to lock in a low fixed-rate. As always, be sure to review your personal finances and financial goals, and shop around to find the right lender and mortgage for your needs.

Check out mortgage rates that meet your distinct needs

30-year fixed-rate mortgages

The 30-year fixed-mortgage rate average is 3.03%, which is an increase of 5 basis points from one week ago. (A basis point is equivalent to 0.01%.) Thirty-year fixed mortgages are the most frequently used loan term. A 30-year fixed mortgage will often have a greater interest rate than a 15-year fixed rate mortgage — but also a lower monthly payment. 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 2.31%, which is a decrease of 2 basis points from the same time last week. You’ll definitely have a higher monthly payment with a 15-year fixed mortgage compared to a 30-year fixed mortgage, even if the interest rate and loan amount are the same. However, as long as you can afford the monthly payments, there are several benefits to a 15-year loan. You’ll typically 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 adjustable-rate mortgage has an average rate of 3.05%, a rise of 6 basis points compared to a week ago. You’ll typically get a lower interest rate (compared to a 30-year fixed mortgage) with a 5/1 adjustable-rate mortgage in the first five years of the mortgage. But changes in the market could cause your interest rate to increase after that time, as detailed in the terms of your loan. If you plan to sell or refinance your house before the rate changes, an ARM may make sense for you. Otherwise, shifts in the market means your interest rate may be much 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 changes in these daily rates. This table summarizes the average rates offered by lenders across the US:

Average mortgage interest rates

Product Rate Last week Change
30-year fixed 3.03% 2.98% +0.05
15-year fixed 2.31% 2.33% -0.02
30-year jumbo mortgage rate 2.78% 2.80% -0.02
30-year mortgage refinance rate 3.00% 2.96% +0.04

Rates as of July 28, 2021.

How to shop for the best mortgage rate

To find a personalized mortgage rate, talk to your local mortgage broker or use an online mortgage service. When shopping around for home mortgage rates, consider your goals and current financial situation. Specific mortgage rates will vary based on factors including credit score, down payment, debt-to-income ratio and loan-to-value ratio. Generally, you want a higher credit score, a larger down payment, a lower DTI and a lower LTV to get a lower interest rate. Beyond the mortgage rate, other costs including closing costs, fees, discount points and taxes might also factor into the cost of your home. You should comparison shop with multiple lenders — such as credit unions and online lenders in addition to local and national banks — in order to get a mortgage loan that’s the right fit for you.

What’s the best loan term?

When picking a mortgage, you should consider the loan term, or payment schedule. The mortgage 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 the same for the duration of the loan. Unlike a fixed-rate mortgage, the interest rates for an adjustable-rate mortgage are only stable for a certain amount of time (most frequently five, seven or 10 years). After that, the rate fluctuates annually based on the market rate.

One factor to take into consideration when choosing between a fixed-rate and adjustable-rate mortgage is how long you plan on living in your home. Fixed-rate mortgages might be a better fit for people who plan on staying in a home for quite some time. While adjustable-rate mortgages may 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 intend to keep your home for a couple years. The best loan term all all depends on your specific situation and goals, so make sure to take into consideration what’s important to you when choosing a mortgage.

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