Today’s best mortgage and refinance rates: Tuesday, September 8, 2020

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Some mortgage rates have gone up since this time last week or last month, but only by a couple basis points. Rates are still trending downward in general, and refinance rates are lower across the board. If your finances are in order, then this could be a good time to get a mortgage or refinance your home.

The best mortgage rates Tuesday, September 8, 2020

Mortgage type
Average rate today
Average rate last week
Average rate last month

30-year fixed
2.93%
2.91%
2.88%

15-year fixed
2.42%
2.46%
2.44%

5/1 ARM
2.93%
2.91%
2.90%

Rates from the Federal Reserve Bank of St. Louis.

The average 30-year fixed and 5/1 ARM rates are a couple basis points higher than last Tuesday, but 15-year fixed rates have gone down.

 

The 30-year fixed and 5/1 ARM rates have gone up a little since this time last month, while 15-year fixed rates have decreased by a couple basis points. Rates remain low in general, though. 

The trending decline becomes more obvious when you look at rates from 6 months or a year ago:

Mortgage type
Average rate today
Average rate 6 months ago
Average rate 1 year ago

30-year fixed
2.93%
3.29%
3.49%

15-year fixed
2.42%
2.79%
3.00%

5/1 ARM
2.93%
3.18%
3.30%

Rates from the Federal Reserve Bank of St. Louis.

Decreasing mortgage rates are typically a response to a struggling economy. As the coronavirus pandemic and economic crisis continue, you’ll likely see rates stay low, and they could keep going down.

The best refinance rates Tuesday, September 8, 2020

Mortgage type
Average rate today
Average rate last week
Average rate last month

30-year fixed
3.14%
3.14%
3.17%

15-year fixed
2.54%
2.60%
2.66%

10-year fixed
2.62%
2.62%
2.67%

Rates from Bankrate.

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Refinance rates for 30-year and 10-year fixed-mortgages have remained steady since this time last week, and refinance rates for 15-year fixed mortgages have decreased slightly. Refinance rates for all three term lengths are down compared to last month.

How 30-year fixed rates work

Typically, you’ll pay a higher rate on a 30-year fixed-rate mortgage than on a 15-year fixed or 5/1 adjustable mortgage.

Your monthly payments will be lower compared to the other types of loans, because your principal is spread out over a longer period of time.

The downside is that you’ll pay more in interest because a) the rate is higher, and b) your interest is also spread out over a longer period of time.

How 15-year fixed rates work

A 15-year fixed rate is lower than what you’ll pay for a 30-year mortgage. Monthly payments will likely be higher, because you’re paying off the principal in half the time.

You’ll save money in the long run, though, because the rate is lower, and you’ll be making payments for a shorter amount of time.

How 10-year fixed rates work

A 10-year fixed-rate mortgage isn’t very common for an initial mortgage. But you might refinance into a 10-year mortgage after you’ve paid down some of your loan.

Rates are similar to what you’ll pay for a 15-year fixed-rate mortgage, but you’ll pay off your loan faster.

How 5/1 ARMs work

A 5/1 adjustable rate is typically lower than the 30-year fixed rate but higher than the 15-year fixed rate.

With a 5/1 ARM, a low rate is locked in for the first five years. Then your rate changes once per …read more

Source:: Business Insider

      

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