Current average mortgage rates

Loan Type Interest Rate
30-year fixed-rate mortgage 3.26%
15-year fixed-rate mortgage 2.73%
5/1 adjustable-rate mortgage 3.17%
Source: Freddie Mac Primary Mortgage Market Survey, May 7, 2020.

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Mortgage rates stay down this week

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Mortgage rates are holding at low levels.

Mortgage rates are little changed from last week's lowest levels in three months, mortgage giant Freddie Mac reported Thursday. The average for a 30-year fixed-rate mortgage is now 3.65%, up a smidge from last week's 3.64%. The loans in the firm's survey come with an average 0.7 point.

One year ago, the benchmark mortgage rate was more than three-quarters of a percentage point higher, at an average 4.45%.

Thirty-year mortgage rates are the lowest for mid-January in seven years, has found, by reviewing Freddie Mac's historical data.

Rates fell sharply last week as the U.S. drama with Iran had investors pouring their money into safe-haven investments, including U.S. Treasury bonds. Bond prices went up, their yields (interest rates) went down, and so did mortgage rates.

The yields haven't recovered much, despite the announcement of a new U.S. trade deal with China. For now, many of the tariffs are still in place, which isn't very comforting for investors.

Use the calculator below to see the kind of monthly payment you can expect from today's low rates:

Low rates should keep homebuying buzzing

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Low mortgage rates are bringing out the buyers.

Homebuyers and homeowners are bingeing on today's attractive rates. Mortgage applications shot up 30.2% last week, the Mortgage Bankers Association says. Applications for refi loans surged 43%, while mortgage "purchase applications" — for loans to buy homes — last week were at their highest level in over 10 years.

If you took out a mortgage as recently as 2018, you might slash your monthly payment by refinancing into a new loan at a lower rate. Compare refi offers from multiple banks through the Mortgage Research Center.

Homebuying and borrowing usually take a breather around the holidays and into the new year, but not this time, says Richard Pisnoy, a principal with Silver Fin Capital Group, a residential and commercial mortgage broker in Great Neck, New York.

The housing market is humming right now, and low mortgage rates are a big reason.

"There can be a huge difference to what type of home, cost of home and location of home based on what they can afford," Pisnoy says. "Low interest rates help keep principal and interest payments down, which can give people a better opportunity to purchase."

The outlook for mortgage rates and housing

Young black couple using laptop sitting on the floor at home
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Homebuyers will keep watching for the best rates.

Mortgage rates are likely to stay at historically low levels, with 30-year fixed-rate mortgages averaging 3.8% throughout both 2020 and 2021, according to Freddie Mac's current forecast.

Homebuyers will be paying attention, Pisnoy says.

"I believe that buyers always kept an eye on mortgage interest rates," he says. "Even though rates seem to have a bit more volatility today than yesteryear, they still have a significant impact to what a family can afford."

It's important to lock a good rate when you see one, because mortgage rates can be unpredictable.

Landing an attractive mortgage rate might be easier than finding something to buy, says Sam Khater, Freddie Mac's chief economist.

“While the outlook for the housing market is positive, worsening homeowner and rental affordability due to the lack of housing supply continue to be hurdles, and they are spreading to many interior markets that have traditionally been affordable," Khater says.

Other mortgage rates this week

Close up of business man signing contract making a deal, business contract details. Businessman signing an official document
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Homeowners are finding lower rates on 15-year refinance loans.

Rates on 15-year fixed-rate mortgages have inched up to an average 3.09%, from 3.07% last week. Those loans are a popular choice among homeowners who refinance.

A year ago, 15-year mortgages were averaging 3.88%, Freddie Mac says.

This week, rates have jumped on 5/1 adjustable-rate mortgages, or ARMs, which are level for five years and then can adjust up — or down — each year.

ARMs are currently being offered at an average initial rate of 3.39%, up from last week's 3.30%. Last year at this time, the starter rates on ARMs were averaging 3.87%.

About the Author

Doug Whiteman

Doug Whiteman


Doug Whiteman is the editor-in-chief of MoneyWise. He has been quoted by The Wall Street Journal, USA Today and and has been interviewed on Fox Business, CBS Radio and the syndicated TV show "First Business."

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