Mortgage rates have risen today, with the average 30-year fixed mortgage rate climbing to 6.64%, an increase of 10 basis points from the previous week, as reported by the Zillow lender marketplace. The average 15-year fixed mortgage rate also saw an uptick, rising two basis points to 5.88%. Additionally, the 5/1 adjustable-rate mortgage (ARM) surged by 50 basis points, reaching 6.74%, according to Yahoo Finance.
Today’s mortgage rates remain above 6%. August 23, the national average rates are: The rates are national averages, according to the latest Zillow data for Sunday. The 30-year fixed mortgage remains the most widely used option, with the average rate at 6.64%. By spreading repayment across 360 months, borrowers generally get lower monthly payments than they would with a shorter-term loan. A 7/1 ARM is fixed for seven years. After the first seven years, the interest rate can change every year for the remaining 23 years of a 30-year mortgage.
The Zillow figures are rounded to the nearest hundredth, so the rate a homebuyer actually gets can be different. Several factors can influence the mortgage rate a borrower ultimately receives, including their credit score, loan amount, down payment and choice of lender. Fixed-rate mortgages offer more certainty. With a fixed-rate mortgage, the interest rate stays locked for the full term of the loan. The rate can change only if the borrower later refinances into a new mortgage. Adjustable-rate mortgages can change later. An ARM keeps the initial interest rate fixed for a set period. After that period ends, the rate can move higher or lower depending on economic conditions and the limits written into the loan contract.
This can make an ARM attractive to buyers who expect to move or refinance before the initial fixed period ends, but there is a risk that payments could rise later.
