According to the latest data from Zillow’s lender marketplace, mortgage rates have experienced slight fluctuations this week. The national average for a 30-year fixed mortgage is now 6.54%, reflecting an increase of 3 basis points from the previous week. In contrast, the 15-year fixed mortgage rate has decreased to 5.86%, down 15 basis points. The 5/1 adjustable-rate mortgage (ARM) is also lower, currently at 6.24%, down 13 basis points. These rates are rounded to the nearest hundredth and represent the current landscape for mortgage borrowers.
Here are the latest mortgage rates for Sunday, August 16, according to Zillow: With a fixed-rate mortgage, the interest rate stays locked for the entire life of the loan. For example, a 7/1 ARM keeps its initial rate for seven years. After that, the rate can change once every year for the remaining 23 years of a 30-year loan, according to Yahoo Finance. For refinancing, the 30-year fixed rate stands at 6.59%, while the 15-year fixed refinance rate is 5.88%.
Because it reflects more of the total cost of borrowing, the APR can give borrowers a better way to compare mortgage offers from different lenders. This means borrowers generally know what their principal-and-interest payment will be throughout the loan. If the homeowner later refinances, the new mortgage will have a new interest rate. An adjustable-rate mortgage, or 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 mortgage contract. Borrowers who want a lower mortgage rate can work on improving their credit, paying down debt or saving for a larger down payment before applying. Simply waiting for mortgage rates to fall may not be the best strategy for every buyer. If someone is financially ready to purchase a home, improving their own financial profile can also help them qualify for a better rate. Borrowers should not compare lenders based only on the advertised interest rate. They should also look at the annual percentage rate (APR). The APR includes the interest rate along with factors such as discount points and fees. In return, borrowers can pay off their loans sooner and reduce the amount of interest paid over the life of the mortgage. Before selecting a mortgage, borrowers should compare offers from multiple lenders, review the APR and consider factors such as their credit profile, existing debt and down payment.
