Mortgage rates make history

Miniature wooden houses and a green arrow down. The concept of falling mortgage rates
Andrii Yalanskyi / Shutterstock
Mortgage rates have hit a new all-time low for the seventh time since March.

Mortgage rates have hit a new all-time low for the seventh time since early March and are now averaging a fantastic 2.98% for a 30-year fixed-rate home loan, Freddie Mac reported on Thursday.

The survey rates come with an average 0.7 point. Last week, 30-year fixed mortgage rates were averaging 3.03% — the previous record low — and a year ago rates were at a much steeper 3.81%.

Freddie Mac's study isn't the only one showing that typical mortgage rates have fallen under 3%. Mortgage News Daily's survey of lenders on Thursday put the average for 30-year mortgages at an even more jaw-dropping 2.89%.

The deeply discounted rates mean homebuyers can now get a loan for a typical home that costs $125 less per month than a mortgage at last year's rates, says Danielle Hale, chief economist at

And more than 16 million homeowners have an opportunity to refinance and save an average $283 per month, a recent report from the data firm Black Knight found.

Use the mortgage calculator below to see the low monthly payment that's possible with one of today's low mortgage rates:

Where do mortgage rates go from here?

Happy african couple husband and wife shopping online for a mortgage
fizkes / Shutterstock
Borrowers might get spoiled by sub-3% mortgage rates,

Rates are so low because the pandemic has led wary investors to pour money into Treasury bonds for safer keeping, causing bond interest rates, or yields, to plummet. Mortgage rates are sliding because they tend to track the yield on the 10-year Treasury note.

Fed policies have helped push rates lower, too. America's central bank has slashed an influential interest rate to almost zero and has taken other steps to cut borrowing costs — as a kind of CPR for the gasping economy.

Mortgage rates under 3% may still seem a little shocking, but we'll get used to seeing them next year, a new forecast says. Mortgage company Fannie Mae expects 30-year fixed-rate mortgages will average 2.9% during the first half of 2021 — and just 2.8% during the second half.

Rates may fluctuate as coronavirus news continues to flip from positive to negative, but borrowers will keep getting bargains, says Jerry Anderson, vice president of residential lending at Alliant Credit Union.

"Even if rates increase off today’s lows, they are still way below recent and historical averages. Remember that rates were nearing 5% in late 2019, so even a move up to 3.5% or 4% is a great rate – and you may never need to refinance again," Anderson says.

Experts say you'll land the best rate you possibly can by comparison shopping. Get loan offers from multiple lenders and review them side by side. Don't ever latch onto the first loan you're offered, because different lenders can offer you vastly different rates.

Other mortgage rates this week

Row of modern townhouses in Vancouver, Canada
Volodymyr Kyrylyuk / Shutterstock
Rates on other types of mortgages are mixed.

Rates on other popular types of mortgages are mixed this week, Freddie Mac says.

The average for a 15-year fixed-rate mortgage has dropped to 2.48%, from 2.51% last week. Fifteen-year mortgages are a popular choice as refinance loans and are way cheaper than they were a year ago, when the average was 3.23%.

But rates on 5/1 adjustable-rate mortgages are higher for the second straight week. Those loans — nicknamed "ARMs" — have rates that are fixed for five years and then can adjust up or down every year, following the path of a benchmark interest rate like the prime rate.

ARMs are currently being offered at starter rates averaging 3.06%, up from an even 3.02% last week. At this time in 2019, the typical initial rate on those mortgages was 3.48%.

Once you've got your mortgage squared away, take some time to give your homeowners insurance a fresh look. Go online and gather several home insurance quotes, to make sure you're getting the right coverage at the best price.

Take a look at today's top mortgage rates where you are:

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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