Mortgage interest rates as of June 8, 2021: Rates recede – CNET

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A variety of notable mortgage rates sank lower today. The average interest rates for both 15-year fixed and 30-year fixed mortgages took a tumble. We also saw a reduction in the average rate of 5/1 adjustable-rate mortgages. Mortgage interest rates are never set in stone, but interest rates are at historic lows. Because of this, right now is an excellent time for prospective homebuyers to get a fixed rate. But as always, make sure to first consider your personal goals and circumstances before purchasing a house, and shop around for a lender who can best meet your needs.

Take a look at mortgage rates for different types of loan

30-year fixed-rate mortgages

The 30-year fixed-mortgage rate average is 3.08%, which is a decline of 2 basis points compared to 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 rate mortgage will usually have a lower monthly payment than a 15-year one — but typically a higher interest rate. 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 2.35%, which is a decrease of 3 basis points compared to a week ago. 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. But a 15-year loan will usually be the better deal, if you can afford the monthly payments. You’ll usually 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 3.08%, a fall of 4 basis points compared to last week. 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. However, changes in the market may cause your interest rate to increase after that time, as detailed in the terms of your loan. Because of this, an ARM may be a good option if you plan to sell or refinance your house before the rate changes. Otherwise, shifts in the market means your interest rate could be much higher once the rate adjusts.

Mortgage rate trends

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

Today’s mortgage interest rates

Loan term Today’s rate Last week Change
30-year mortgage rate 3.08% 3.10% -0.02
15-year fixed rate 2.35% 2.38% -0.03
30-year jumbo mortgage rate 3.24% 3.15% +0.09
30-year mortgage refinance rate 3.12% 3.14% -0.02

Rates accurate as of June 8, 2021.

How to find personalized mortgage rates

To find a personalized mortgage rate, meet with your local mortgage broker or use an online mortgage service. In order to find the best home mortgage, you’ll need to take into account your goals and current finances. A range of factors — including your down payment, credit score, loan-to-value ratio and debt-to-income ratio — will all affect the interest rate on your mortgage. Generally, you want a good credit score, a larger down payment, a lower DTI and a lower LTV to get a lower interest rate. Beyond the interest rate, factors including closing costs, fees, discount points and taxes might also impact the cost of your house. Make sure to shop around with multiple lenders — like credit unions and online lenders in addition to local and national banks — in order to get a loan that’s the best fit for you.

What is a good loan term?

One important thing to consider when choosing a mortgage is the loan term, or payment schedule. The loan 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. For fixed-rate mortgages, interest rates are set for the life 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 (usually five, seven or 10 years). After that, the rate fluctuates annually based on the market rate.

When choosing between a fixed-rate and adjustable-rate mortgage, you should consider the length of time you plan to live in your house. Fixed-rate mortgages might be a better fit for people who plan on living in a home for a while. Fixed-rate mortgages offer greater stability over time in comparison to adjustable-rate mortgages, but adjustable-rate mortgages might offer lower interest rates upfront. If you don’t have plans to keep your new house for more than three to 10 years, though, an adjustable-rate mortgage could give you a better deal. The best loan term all depends on your personal situation and goals, so make sure to consider what’s important to you when choosing a mortgage.

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