December 3, 2021: Today’s mortgage rates for homebuyers drop

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A handful of major mortgage rates have come down today, including the 15 and 30 year fixed mortgage rates. For variable rates, the 5/1 variable rate mortgage also fell. Mortgage interest rates are never set in stone, but interest rates are historically low. If you are thinking of buying a home, this might be a good time to get a fixed rate. Before buying a home, don’t forget to consider your personal needs and your financial situation, and shop around with different lenders to find the one that’s right for you.

30-year fixed rate mortgages

For a 30-year fixed rate mortgage, the average rate you’ll pay is 3.14%, which is 5 basis points down from a week ago. (One basis point equals 0.01%.) The most commonly used loan term is a 30-year fixed mortgage. A 30 year fixed rate mortgage will usually have a lower monthly payment than a 15 year mortgage, but usually a higher interest rate. While you’ll pay more interest over time – you pay off your loan over a longer period – if you’re looking for a lower monthly payment, a 30-year fixed mortgage may be a good option.

15-year fixed rate mortgages

The average rate for a 15-year fixed-rate mortgage is 2.44%, which is a decrease of 2 basis points from the same period last week. Compared to a 30-year fixed mortgage, a 15-year fixed mortgage with the same loan value and the same interest rate will have a higher monthly payment. However, if you can afford the monthly payments, a 15-year loan has several advantages. You will usually get a lower interest rate and pay less interest overall because you pay off your mortgage much faster.

5/1 adjustable rate mortgages

A 5/1 ARM has an average rate of 3.13%, a decrease of 5 basis points from a week ago. You will typically get a lower interest rate (compared to a 30-year fixed mortgage) with a 5/1 variable rate mortgage during the first five years of the mortgage. But market fluctuations can cause your interest rate to increase after this period, as stated in your loan terms. For borrowers who are considering selling or refinancing their home before rates change, an adjustable rate mortgage may be a good option. Otherwise, changes in the market can dramatically increase your interest rate.

Mortgage rate trends

We use rates collected by Bankrate, which is owned by the same parent company as CNET, to track daily mortgage rate trends. This table summarizes the average rates offered by lenders in the United States:

Average mortgage interest rates

Product Rate Last week Switch
30 years fixed 3.14% 3.19% -0.05
15 years fixed 2.44% 2.46% -0.02
Giant 30-year mortgage rate 2.76% 2.80% -0.04
30-year mortgage refinancing rate 3.13% 3.16% -0.03

Prices as of December 3, 2021.

How To Shop For The Best Mortgage Rate

You can get a personalized mortgage rate by connecting with your local mortgage broker or by using an online calculator. Be sure to take your current finances and goals into account when trying to find a mortgage. Things that affect the interest rate you might get on your mortgage include: your credit rating, down payment, loan-to-value ratio, and debt-to-income ratio. Having a good credit score, a larger down payment, a low DTI, a low LTV, or any combination of these factors can help you get a lower interest rate. The interest rate is not the only factor that affects the cost of your home. Also, be sure to take into account other factors such as fees, closing costs, taxes, and points of call. You should shop around with multiple lenders – such as credit unions and online lenders in addition to local and state banks – to get a loan that’s right for you.

How does the term of the loan affect my mortgage?

An important factor to consider when choosing a mortgage loan is the length of the loan or the payment schedule. The most commonly offered mortgage terms are 15 years and 30 years, although you can also find 10, 20 and 40 year mortgages. Another important distinction is between fixed rate and adjustable rate mortgages. The interest rates for a fixed rate mortgage are the same throughout the life of the loan. For adjustable rate mortgages, the interest rates are stable for a certain number of years (most often five, seven or 10 years), then the rate changes annually according to the market rate.

When deciding between a fixed rate mortgage and an adjustable rate mortgage, you need to consider how long you plan to stay in your home. Fixed rate mortgages may be more suitable for those who plan to live in a house for a period of time. Fixed rate mortgages offer greater stability over time compared to variable rate mortgages, but variable rate mortgages may offer lower interest rates initially. However, you might get a better deal with an adjustable rate mortgage if you only plan to keep your home for a few years. Generally, there is no better loan term; it all depends on your goals and your current financial situation. Make sure you do your research and think about what is most important to you when choosing a mortgage.