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Mortgage rates on Sept. 27, 2021: Rates move higher – CNET

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A number of important mortgage rates increased today. 15-year fixed and 30-year fixed mortgage rates both moved higher. The average rate of the most common type of variable-rate mortgage, the 5/1 adjustable-rate mortgage, also cruised higher. Mortgage interest rates are never set in stone, but interest rates are at historic lows. If you plan to finance a home, now might be an excellent time to secure a fixed rate. Before you buy a house, remember to think about your personal needs and financial situation, and shop around for various lenders to find the best one for you.

30-year fixed-rate mortgages

The average 30-year fixed mortgage interest rate is 3.04%, which is an increase of 4 basis points from one week ago. (A basis point is equivalent to 0.01%.) The most frequently used loan term is a 30-year fixed mortgage. A 30-year fixed mortgage will usually 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 2.30%, which is an increase of 2 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 larger 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 adjustable-rate mortgage has an average rate of 3.05%, a rise of 4 basis points from the same time last week. For the first five years, you’ll typically get a lower interest rate with a 5/1 adjustable-rate mortgage compared to a 30-year fixed mortgage. However, shifts in the market might 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 adjustable-rate mortgage might make sense for you. Otherwise, changes in the market means your interest rate may be a good deal higher once the rate adjusts.

Mortgage rate trends

We use information collected by Bankrate, which is owned by the same parent company as CNET, to track rates changes over time. This table summarizes the average rates offered by lenders across the country:

Average mortgage interest rates

Product Rate Last week Change
30-year fixed 3.04% 3.00% +0.04
15-year fixed 2.30% 2.28% +0.02
30-year jumbo mortgage rate 2.79% 2.79% N/C
30-year mortgage refinance rate 3.01% 2.97% +0.04

Rates as of Sept. 27, 2021.

How to find personalized mortgage rates

You can get a personalized mortgage rate by connecting with your local mortgage broker or using an online calculator. Make sure to take into account your current finances and your goals when looking for a mortgage. A range of factors — including your down payment, credit score, loan-to-value ratio and debt-to-income ratio — will all affect your mortgage rate. Generally, you want a good credit score, a higher down payment, a lower DTI and a lower LTV to get a lower interest rate. Apart from the mortgage interest rate, other factors including closing costs, fees, discount points and taxes might also factor into the cost of your house. 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’s best for you.

What’s the best loan term?

When picking a mortgage, remember to consider 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 stable for the duration of the loan. Unlike a fixed-rate mortgage, the interest rates for an adjustable-rate mortgage are only the same for a certain amount of time (commonly five, seven or 10 years). After that, the rate changes annually based on the market interest rate.

One important factor to think about when choosing between a fixed-rate and adjustable-rate mortgage is the length of time you plan on staying in your home. For people who plan on staying long-term in a new house, fixed-rate mortgages may be the better option. Fixed-rate mortgages offer more stability over time in comparison to adjustable-rate mortgages, but adjustable-rate mortgages might offer lower interest rates upfront. However you may get a better deal with an adjustable-rate mortgage if you only have plans to keep your house for a couple years. There is no best loan term as a general rule; it all depends on your goals and your current financial situation. Be sure to do your research and understand your own priorities when choosing a mortgage.