Today’s mortgages, refinancing rate: December 11, 2021
Mortgage rates have risen slightly in recent months, but are still at historically low levels overall. Fixed 30-year rates hover around 3%, and 15-year rates are well below 2.5%.
Even as mortgage rates rise, data from Freddie Mac shows rates are still significantly lower than they have been for the past five years:
Mortgage rates will likely stay low until the end of 2021, but we could see them rise in 2022.
Mortgage rates today
Mortgage Refinance Rate Today
Use our free mortgage calculator to see how today’s mortgage rates would impact your monthly payments. By inserting different rates and terms, you will also understand how much you will be paying over the life of your mortgage.
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What is a mortgage rate?
A mortgage rate is the interest you pay on the money you borrow from a lender to buy or refinance your home. These are basically the fees you pay to borrow, expressed as a percentage. For example, you can take out a mortgage for $ 200,000 plus an interest rate of 2.75%.
There are two types of mortgage rates: fixed rates and adjustable rates.
A fixed rate mortgage lock in your rate for the duration of your mortgage. Even if the rates in the US market go up or down, your rate will stay the same. This is a particularly good offer at the moment, as rates are at historically low levels overall.
A adjustable rate mortgage keeps your rate the same for a predetermined amount of time, then changes it periodically. A 5/1 ARM locks in your rate for the first five years, then the rate fluctuates once a year. It’s a riskier approach nowadays because you risk your rate going up later because the rates are low right now.
How are mortgage rates determined?
Mortgage rates are determined by a combination of factors – some you can control and some you cannot.
The main external factor is economy. Interest rates tend to be higher when the US economy is booming and lower when it is struggling. The two main economic factors that affect mortgage rates are employment and inflation. When the number of jobs and inflation increase, mortgage rates tend to rise.
You can control your finances, although. The better your credit score, debt-to-income ratio, and down payment, the lower your rate should be.
Finally, your mortgage rate depends on what type of mortgage you obtain. Government guaranteed mortgages (like FHA, VA, and USDA loans) charge the lowest rates, while jumbo mortgages charge the highest rates. You will also benefit from a lower rate with a shorter mortgage term.
How to choose a mortgage lender?
First, think about what type of mortgage you want. The best mortgage lender will be different for an FHA mortgage than for a VA mortgage.
A lender should be relatively affordable. You shouldn’t need a very high credit score or down payment to get a loan. You also want it to offer good rates and charge reasonable fees.
Once you’re ready to start shopping for homes, apply for pre-approval with your top three or four. A pre-approval letter indicates that the lender wants to lend you up to a certain amount, at a specific interest rate. When you are pre-approved, your mortgage rate is locked in for 60 to 90 days. With a few pre-approval letters in hand, you can compare each lender’s offer.
When you apply for pre-approval, a lender does a serious credit investigation. A bunch of serious questions on your report can hurt your credit score, unless it’s for the purpose of finding the best rate.
If you limit your rate purchases to about a month, the credit bureaus will understand that you are looking for a home and should not hold back every individual investigation against you.