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Current Mortgage Rates, August 4, 2020 | Rates decrease

Bankrate logo Bankrate 8/4/2020 Jeff Ostrowski
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Multiple closely watched mortgage rates dropped today. The average rates on 30-year fixed and 15-year fixed mortgages both tapered off. The average rate on 5/1 adjustable-rate mortgages, or ARMs, the most popular type of variable rate mortgage, also sunk lower.

Mortgage rates are in a constant state of flux, but overall, they are very low by historical standards. If you’re in the market for a mortgage, it could make sense to go ahead and lock if you see a rate you like. Just make sure you’ve looked around for the best rate first.

See mortgage rates for a variety of loan types.

30-year fixed mortgages

The average rate you’ll pay for a 30-year fixed mortgage is 3.04 percent, down 11 basis points over the last seven days. A month ago, the average rate on a 30-year fixed mortgage was higher, at 3.24 percent.

At the current average rate, you’ll pay principal and interest of $423.76 for every $100,000 you borrow. Compared with last week, that’s $5.98 lower.

You can use Bankrate’s mortgage rate calculator to estimate your monthly payments and see the effect of adding extra payments. It will also help you determinehow much interest you’ll pay over the life of the loan.

15-year fixed mortgages

The average 15-year fixed-mortgage rate is 2.68 percent, down 7 basis points from a week ago.

Monthly payments on a 15-year fixed mortgage at that rate will cost around $675 per $100,000 borrowed. Yes, that payment is much bigger than it would be on a 30-year mortgage, but it comes with some big advantages: You’ll save thousands of dollars over the life of the loan in total interest paid and build equity much faster.

5/1 ARMs

The average rate on a 5/1 ARM is 3.28 percent, ticking down 2 basis points over the last 7 days.

These loan types are best for those who expect to sell or refinance before the first or second adjustment. Rates could be substantially higher when the loan first adjusts, and thereafter.

Monthly payments on a 5/1 ARM at 3.28 percent would cost about $437 for each $100,000 borrowed over the initial five years, but could ratchet higher by hundreds of dollars afterward, depending on the loan’s terms.

Where rates are headed

To see where Bankrate’s panel of experts expect rates to go from here, check out our mortgage rate projections.

Want to see where rates are at this moment? Lenders nationwide respond to our weekday mortgage rates survey to bring you the most current rates available. Here you can see the latest marketplace average rates for a wide variety of purchase loans:

Today’s mortgage interest rates
Loan term Today’s Rate Last week Change
30-year mortgage rate 3.04% 3.15% -0.11
15-year mortgage rate 2.68% 2.75% -0.07
30-year jumbo mortgage rate 3.07% 3.19% -0.12
30-year mortgage refinance rate 3.09% 3.21% -0.12

Rates accurate as of August 4, 2020.

Lock your mortgage rate now or wait?

A rate lock guarantees your interest rate for a specified period of time. It’s common for lenders to offer 30-day rate locks for a fee or to include the price of the rate lock into your loan. Some lenders will lock rates for longer periods, sometimes for more than 60 days, but those locks can be costly. In today's volatile market, some lenders will lock an interest rate for only two weeks because they don't want to take on unnecessary risk.

With a rate lock, if interest rates rise, you're locked into the guaranteed rate. Some lenders have a floating-rate lock option, which allows you to get a lower rate if interest rates fall before you close your loan. In a falling rate environment, a float-down lock could be worth the cost. Because there is no guarantee of where mortgage rates will head in the future, it may be smart to lock in a low rate instead of holding out on rates for potentially decline further.

It’s important to keep in mind: During the pandemic, all aspects of real estate and mortgage closings are taking much longer than usual. Expect the closing on a new mortgage to take at least 60 days, and expect refinancing to take at least a month..

Factors that influence mortgage rates

A number of economic factors influence mortgage rates. Among them are inflation and unemployment. Higher inflation typically leads to higher mortgage rates. The opposite is also true; when inflation is low, mortgage rates typically are as well. As inflation increases, the dollar loses value. That drives investors away from mortgage-backed securities (MBS), which causes the prices to decrease and yields to increase. When yields move higher, rates become more expensive for borrowers.

A strong economy usually means more people buying homes, which drives demand for mortgages. This increased demand can push rates higher. The opposite is also true; less demand can trigger a drop in rates.

Current mortgage rate landscape

The current mortgage rate environment has been unstable because of the coronavirus pandemic, but generally rates have been low. Mortgage rates are rising and falling from week to week, as lenders are inundated with forbearance and refinance requests. In general, however, rates are consistently below 4 percent and even dipping into the mid to low 3s. This is an especially good time for people with good to excellent credit to lock in a low rate for a purchase loan. However, lenders are also raising credit standards for borrowers and demanding higher down payments as they try to dampen their risks.

Methodology: The rates you see above are Bankrate.com Site Averages. These calculations are run after the close of the previous business day and include rates and/or yields we have collected that day for a specific banking product. Bankrate.com site averages tend to be volatile — they help consumers see the movement of rates day to day. The institutions included in the “Bankrate.com Site Average” tables will be different from one day to the next, depending on which institutions’ rates we gather on a particular day for presentation on the site.

To learn more about the different rate averages Bankrate publishes, see “Understanding Bankrate’s average rates.”

Shopping for a mortgage lender? Check out Bankrate’s mortgage lender reviews.

Compare mortgage rates for various loan types
Loan Type Purchase Rates Refinance Rates
The index above links out to loan-specific content to help our readers learn more about rates by loan type.
30-Year Loan Current 30 Year Mortgage Rates Current 30 Year Refinance Rates
20-Year Loan 20-Year Mortgage Interest Rates 20-Year Refinance Rates
15-Year Loan Today’s 15-Year Mortgage Rates 15-Year Mortgage Refinance Rates
10-Year Loan 10-Year Mortgage Interest Rates Current 10-Year Refinance Rates
FHA Loan FHA Mortgage Interest Rates FHA Mortgage Refi Rates
VA Loan VA Mortgage Interest Rates VA Refinance Rates
ARM Loan Adjustable Rate Mortgage Rates ARM Refinance Rates
Jumbo Loan Jumbo Loan Interest Rates Jumbo Mortgage Refinance Rates

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