By Bankrate–

Several benchmark mortgage rates slid lower today. The average rates on 30-year fixed and 15-year fixed mortgages both receded. Meanwhile, the average rate on 5/1 adjustable-rate mortgages also tapered off.

Rates for mortgages change daily, but they remain much lower overall than they were before the Great Recession. If you’re in the market for a mortgage, it could make sense to go ahead and lock if you see a rate you like. Just make sure you’ve looked around for the best rate first.

Find the right mortgage rate for your specific criteria.

30-year fixed mortgages

The average rate you’ll pay for a 30-year fixed mortgage is 3.26 percent, a decrease of 7 basis points from a week ago. Last month on the 2nd, the average rate on a 30-year fixed mortgage was higher, at 3.45 percent.

At the current average rate, you’ll pay principal and interest of $435.76 for every $100,000 you borrow. Compared with last week, that’s $3.85 lower.

You can use Bankrate’s home loan calculator to estimate your monthly payments and see how much you’ll save by adding extra payments. It will also help you determinehow much interest you’ll pay over the life of the loan.

15-year fixed mortgages

The average 15-year fixed-mortgage rate is 2.79 percent, down 7 basis points since the same time last week.

Monthly payments on a 15-year fixed mortgage at that rate will cost around $681 per $100,000 borrowed. That’s obviously much higher than the monthly payment would be on a 30-year mortgage at that rate, but it comes with some big advantages: You’ll come out several thousand dollars ahead over the life of the loan in total interest paid and build equity much more quickly.

5/1 ARMs

The average rate on a 5/1 ARM is 3.11 percent, ticking down 5 basis points since the same time last week.

These types of loans are best for those who expect to refinance or sell before the first or second adjustment. Rates could be substantially higher when the loan first adjusts, and thereafter.

Monthly payments on a 5/1 ARM at 3.11 percent would cost about $428 for each $100,000 borrowed over the initial five years, but could increase by hundreds of dollars afterward, depending on the loan’s terms.

Where rates are headed

To see where Bankrate’s panel of experts expect rates to go from here, check out our mortgage interest rates forecast.

Want to see where rates are currently? Lenders across the nation respond to our weekday mortgage rates survey to bring you the most current rates available. Here you can see the latest marketplace average rates for a wide variety of purchase loans:

Average mortgage interest rates

PRODUCT RATE LAST WEEK CHANGE
30-year fixed 3.26% 3.33% -0.07
15-year fixed 2.79% 2.86% -0.07
30-year fixed jumbo 3.32% 3.39% -0.07
30-year fixed refinance 3.34% 3.35% -0.01

Rates as of July 2, 2020.

Lock your mortgage rate now or wait?

A rate lock guarantees your interest rate for a specified period of time. It’s common for lenders to offer 30-day rate locks for a fee or to include the price of the rate lock into your loan. Some lenders will lock rates for longer periods, sometimes for more than 60 days, but those locks can be pricey. In today’s volatile market, some lenders will lock an interest rate for only two weeks to avoid unnecessary risk.

With a rate lock, if interest rates rise, you’re locked into the guaranteed rate. Some lenders have a floating-rate lock option, which allows you to get a lower rate if interest rates fall before you close your loan. In a falling rate environment, a float-down lock could be worth the cost. Because mortgage rates are not predictable, there’s no guarantee that rates will stay where they are from week to week or even day to day. So, if you can lock in a low rate, then you should do so rather than gamble on interest rates falling even lower.

It’s important to keep in mind: During the pandemic, all aspects of real estate and mortgage closings are taking much longer than usual. Expect the closing on a new mortgage to take at least 60 days, and expect refinancing to take at least a month..

What causes mortgage rates to change

Mortgage rates are influenced by a range of economic factors, from inflation to unemployment numbers. Typically, higher inflation means higher interest rates and vice versa. As inflation rises, the dollar loses value, which in turn drives off investors for mortgage-backed securities, causing the prices to fall and yields to climb. When yields climb, rates get more expensive for borrowers.

A strong economy usually means more people buying homes, which drives demand for mortgages. This increased demand can push rates higher. The opposite is also true; less demand can trigger a drop in rates.

What are current mortgage rates?

Mortgage rates have been volatile because of the COVID-19 pandemic. Generally, though, rates have been low. Mortgage rates are rising and falling from week to week, as lenders are inundated with forbearance and refinance requests. In general, however, rates are consistently below 4 percent and even dipping into the mid to low 3s. This is an especially good time for people with good to excellent credit to lock in a low rate for a purchase loan. However, lenders are also raising credit standards for borrowers and demanding higher down payments as they try to dampen their risks.

Methodology: The rates you see above are Bankrate.com Site Averages. These calculations are run after the close of the previous business day and include rates and/or yields we have collected that day for a specific banking product. Bankrate.com site averages tend to be volatile — they help consumers see the movement of rates day to day. The institutions included in the “Bankrate.com Site Average” tables will be different from one day to the next, depending on which institutions’ rates we gather on a particular day for presentation on the site.

To learn more about the different rate averages Bankrate publishes, see “Understanding Bankrate’s on-site rate averages.”

Searching for a mortgage lender? Check out reviews of top lenders.

See rates for a variety of loan types

LOAN TERM PURCHASE RATES REFINANCE RATES
The index above links out to loan-specific pages to help you learn more about rates by loan type.
30-Year Loan 30-Year Mortgage Rates 30-Year Mortgage Refinance Rates
20-Year Loan Current 20 Year Mortgage Rates 20-Year Refinance Rates
15-Year Loan 15 Year Fixed Mortgage Rates Current 15-Year Refinance Rates
10-Year Loan Current 10 Year Mortgage Rates 10-Year Mortgage Refinance Rates
FHA Loan FHA Mortgage Rates FHA Refinance Interest Rates
VA Loan VA Loan Interest Rates Current VA Refinance Rates
ARM Loan ARM Mortgage Rates ARM Refi Mortage Rates
Jumbo Loan Jumbo Loan Rates Jumbo Refinance Rates