Today's best mortgage and refinance rates: Sunday, November 15, 2020

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Mortgage rates have gone up since last Sunday, and some refinance rates have also gone up — but rates are still low overall. You'll probably get a better deal with a fixed-rate mortgage than an adjustable-rate mortgage right now.

A fixed-rate mortgage locks in a rate for the entire life of your mortgage. An adjustable-rate mortgage keeps your rate the same for the first few years, then adjusts it once per year. Darrin English, Senior Community Development Loan Officer at Quontic Bank, told Business Insider that typically there's an advantage to an adjustable-rate mortgage, like a lower interest rate.

But he points out that ARMs don't currently follow that pattern. Fixed rates are better than adjustable rates right now, because lenders want to keep customers banking with them for as long as possible. The 30-year fixed rate is lower than the 5/1 ARM rate this week. And you'd risk your 5/1 ARM rate increasing in five years, whereas you could lock in a low rate for decades with a 30-year term.

If your finances are in a good place, then it could be a good time to get a fixed-rate mortgage or refinance.

The best mortgage rates Sunday, November 15, 2020

Mortgage type Average rate today Average rate last week Average rate last month
30-year fixed 2.84% 2.78% 2.81%
15-year fixed 2.34% 2.32% 2.35%
5/1 ARM 3.11% 2.89% 2.90%

Rates from the Federal Reserve Bank of St. Louis.

Mortgage rates have gone up since last Sunday. Since this time last month, 30-year fixed rates and 5/1 adjustable rates have increased, while 15-year fixed rates have decreased by a basis point.

Overall, mortgage rates are low right now. The trend downward becomes more apparent when you look at rates from 6 months and a year ago:

Mortgage type Average rate today Average rate 6 months ago Average rate 1 year ago
30-year fixed 2.84% 3.28% 3.75%
15-year fixed 2.34% 2.72% 3.20%
5/1 ARM 3.11% 3.18% 3.44%

Rates from the Federal Reserve Bank of St. Louis.

Several factors affect mortgage rates. Lower rates are usually a sign of a struggling economy. As the coronavirus pandemic and economic crisis continue, rates will likely stay relatively low.

The best refinance rates Sunday, November 15, 2020

Mortgage type Average rate today Average rate last week Average rate last month
30-year fixed 3.10% 3.07% 3.13%
15-year fixed 2.57% 2.71% 2.59%
10-year fixed 2.56% 2.58% 2.60%

Rates from Bankrate.

Refinance rates were last updated on Friday, November 13. The 30-year fixed refinance rates have gone up since last week, while 15-year and 10-year refinance rates have gone down. Refinance rates have decreased since this time last month.

30-year fixed mortgage rates

You'll pay a higher interest rate on a 30-year fixed mortgage than on a shorter-term fixed-rate mortgage. The 30-year fixed rates used to be higher than adjustable rates, but recently 30-year terms have been the better deal.

Monthly payments are relatively low for a 30-year term, because you're spreading payments out over a longer period of time than you would with a shorter term.

You'll ultimately pay more in interest with a 30-year term than you would for a 15-year mortgage, because a) the rate is higher, and b) you'll be paying interest for longer.

15-year fixed mortgage rates

You'll pay less on a 15-year mortgage than on a 30-year loan, for two reasons: 15-year fixed rates are lower, and you'll pay off the mortgage in half the time.

Your monthly payments will be higher than with a 30-year mortgage, though. You're squeezing the same loan principal into a shorter amount of time, so you'll pay more each month.

10-year fixed mortgage rates

It isn't very common to get a 10-year term for an initial mortgage, but you may refinance into a 10-year mortgage.

Lenders charge similar interest rates on 10-year and 15-year terms, but you'll pay off your mortgage sooner with a 10-year term.

5/1 adjustable mortgage rates

An adjustable-rate mortgage keeps your rate the same for the first few years, then changes it periodically. A 5/1 ARM locks in your interest rate for the first five years, then your rate will fluctuate once per year.

Although ARM rates are relatively low these days, fixed-rate mortgages are still the better deal. The 30-year fixed rates are lower than ARM rates. It could be in your best interest to lock in a low rate with a 30-year or 15-year fixed-rate mortgage rather than risk your rate increasing later with an ARM.

If you're considering an ARM, you should still ask your lender about what your individual rates would be if you chose a fixed-rate versus adjustable-rate mortgage.

Is it a good time to get a mortgage or refinance?

Refinance rates are low right now, so you may want to consider refinancing in the next few weeks. Starting December 1, most borrowers will pay a 0.5% fee for refinancing. If you lock in a rate before December 1, you won't have to pay this new fee.

But if your finances could use some work, you still might want to hold off on refinancing. A low credit score or a high debt-to-income ratio will result in a higher interest rate, which could cost you more than the 0.5% closing fee over the years.

Whether you want to refinance or get an original mortgage, a fixed-rate mortgage is probably the best deal. Fixed rates are at all-time lows right now. English doesn't recommend applying for an ARM, though.

"I can't see one good reason why someone would choose to go with an ARM versus a 30-year fixed rate in today's market," English said. "Why take the risk when you can get a better rate in a 30-year loan?"

You may not need to hurry to get a new mortgage, though. Mortgage rates will likely stay low well into 2021, if not longer. If you want to land the best rate possible, think about taking some of the following steps before submitting an application:

  • Increase your credit score. A score of at least 700 will help you out — but the higher your score, the lower your interest rate. The most important factor in boosting your credit score is making all your payments on time. 
  • Save more for a down payment. You may be able to place as little as 3% down on a conventional mortgage. But lenders reward larger down payments with better rates, so you may want to save even more. Because rates should stay low for a while, you probably have time to save more for a down payment.
  • Lower your debt-to-income ratio. Your DTI is the amount you pay toward debts each month, divided by your gross monthly income. Most lenders want to see a DTI of 36% or less, but a lower ratio can result in a better rate. To improve your DTI, look for chances to increase your income or pay down debts.

If you feel comfortable with your financial situation, now could be a good time to get a fixed-rate mortgage or refinance.

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