Today’s Mortgage and Refinance Rate: July 19, 2021


Mortgage rates have fallen significantly over the past month, with average purchase mortgage rates consistently lower than refinancing loans. Overall, it’s a good day to lock in a low rate.

If you’re ready to buy or refinance, you’ll probably want a fixed rate mortgage rather than an adjustable rate mortgage. ARM rates are starting to be higher than fixed rates right now, and you could risk your rate going up even more in a few years. It’s safest to lock in an all-time low rate while you can.

Mortgage rates today conventional rates; RedVentures government guaranteed rates.

Today’s refinance rate conventional rates; RedVentures government guaranteed rates.

What is a mortgage rate?

A mortgage rate is the interest you pay on the money you borrow from a lender to buy or refinance your home. These are basically the fees you pay to borrow, expressed as a percentage. For example, you can take out a mortgage for $ 200,000 plus an interest rate of 2.75%.

There are two types of mortgage rates: fixed rates and adjustable rates.

A fixed rate mortgage lock in your rate for the duration of your mortgage. Even if the rates in the US market go up or down, your rate will stay the same. It’s a good deal right now, as rates are at historically low levels.

A adjustable rate mortgage keeps your rate the same for a predetermined amount of time, then changes it periodically. A 10/1 ARM locks in your rate for the first 10 years, then the rate fluctuates once a year. It’s a riskier approach these days because ARM rates start higher than fixed rates, and you risk your rate going up later.

How are mortgage rates determined?

Mortgage rates are determined by a combination of factors – some you can control and some you cannot.

The main external factor is economy. Interest rates tend to be higher when the US economy is booming and lower when it is struggling. The two main economic factors that affect mortgage rates are employment and inflation. When the number of jobs and inflation increase, mortgage rates tend to rise.

You can control your finances, But. The better your credit score, debt-to-income ratio, and down payment, the lower your rate should be.

Finally, your mortgage rate depends on what type of mortgage you obtain. Government guaranteed mortgages (like FHA, VA, and USDA loans) charge the lowest rates, while jumbo mortgages charge the highest rates. You will also get a lower rate with a shorter mortgage term.

What credit score do you need for a mortgage?

Each type of mortgage loan has a different minimum credit score requirement. Here’s how it typically breaks down:

These are just the general rules of thumb, however. Every lender has the right to demand a higher or lower credit score. (Although the FHA minimums listed here are the lowest a lender allows.)

If your credit score is above the minimum required by a lender, you could get a better mortgage interest rate.

Find out more and get offers from several lenders »

Mortgage rates last week and last month

Mortgage rate trends

Over the past four weeks, average rates on all types of mortgages (fixed, variable rate and government guaranteed) have fallen. The 7/1 and 10/1 adjustable rate loans are the only rates that exceed 4%, and were the only rates to do so consistently for most of the past month. Average rates on 30-year fixed-rate loans are even lower than they were last week, while average rates on 15-year fixed-rate loans have remained roughly stable.

Trends in refinancing rates

As usual, refinance rates follow the same pattern as mortgage rates and have generally declined over the past month. There are, however, a few notable differences: Rates on variable rate mortgage refinancing loans could be down since last month, but have been up since last week.

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