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Mortgage rates are the lowest in almost 50 years, maybe more

MoneyWise logo MoneyWise 11/21/2020 Ethan Rotberg
a store in a brick building: Mortgage rates are lowest in nearly 50 years © Auden Johnson/Shutterstock Mortgage rates are lowest in nearly 50 years

Mortgage rates have plunged to a new low and have made home loans an even more stunning bargain for borrowers, according to a popular survey that dates back nearly half a century.

Rates have now hit an all-time low in the Freddie Mac survey for the 13th time since the pandemic began in March, and the new record puts the average for a 30-year fixed-rate home loan under 2.75% for the very first time.

Today's ultra-low interest rates continue to attract homeowners, who can refinance their loans to slash their monthly mortgage payments and their lifetime interest costs.

Homebuyers also are taking advantage of the cheap rates, which are helping to take some of the bite out of rising home prices across the country.

Historically low mortgage rates

Andrii Yalanskyi / Shutterstock © Provided by MoneyWise Andrii Yalanskyi / Shutterstock

Mortgage rates have dropped to an average 2.72% for a 30-year fixed-rate loan. That's down from the previous week's 2.84%, mortgage giant Freddie Mac said on Thursday. Rates are the lowest since the company began record-keeping in 1971.

Rates rose earlier in the month as financial markets celebrated encouraging test results for a coronavirus vaccine, but last week, cold realities set in.

“Investors had to weigh the promising news of another vaccine contender against this week’s disappointing retail report and still-rising COVID cases,” says George Ratiu, senior economist at

The Commerce Department reported that U.S. retail sales rose by a weaker-than-expected 0.3% in October. Meanwhile, coronavirus infections have exploded nationwide.

Rates on 30-year mortgages are now nearly one full percentage point below where they were a year ago, when the average was 3.66%

Gallery: What the Fed’s Major Strategic Change Means for You (GOBankingRates)

Low rates fuel a refi rush

a woman sitting at a table looking at a laptop: fizkes/Shutterstock © Provided by MoneyWise fizkes/Shutterstock

Rates on other popular mortgages also have gone down, the Freddie Mac survey shows.

For 5/1 adjustable-rate mortgages, or ARMs, the current average is 2.85%, way down from the prior week's 3.11% and last year’s 3.39%.

The average for a 15-year fixed-rate mortgage has decreased to an all-time-low 2.28%, from 2.34% a week earlier. These mortgages, often used for refinance loans, remain deeply below last year at this time, when the average was 3.15%.

Refi requests have been coming in at double the rate of a year ago, according to the Mortgage Bankers Association.

But many homeowners are still sitting on their hands. Some 19.4 million mortgage holders are in a good position to refinance and save more than $300 monthly, the mortgage data firm Black Knight said on Friday. The researchers say 2.7 million could even save $500 or more every month by refinancing.

Good refi candidates — those with a solid credit score and at least 20% home equity — may need to hurry to lock in one of the best rates while they last.

Buyers love cheap mortgage rates, too

a young boy standing next to a man: Andy Dean Photography / Shutterstock © Provided by MoneyWise Andy Dean Photography / Shutterstock

Low mortgage rates have made for a very competitive housing market this year. With a low supply of homes to fight over, buyers have seen prices steadily rise.

“Despite persistent economic uncertainty and the worsening spread of COVID-19, it’s abundantly clear that home shoppers are eager to reassess their living situations,” says Matthew Speakman, an economist with Zillow.

And here's good news: There are signs that improving seller confidence is leading to an “encouraging rebound” in housing supply, says a new report from

Experts say homebuyers should gather and compare at least five mortgage offers to find the best deal — because rates can vary sharply from one lender to the next.

Be sure to put those same comparison shopping skills to work when you buy or renew your homeowners insurance. Get quotes from several insurers and review them side by side, to find the lowest price for your coverage.


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