Mortgage rates plummet to yet another new low

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Mortgage rates have hit a new all-time low for the ninth time this year.

Mortgage rates have slid all the way down to an average 2.86% for a 30-year fixed-rate loan, from 2.93% last week, mortgage company Freddie Mac said Thursday.

The typical 30-year rate is now the lowest ever for the survey, which began in 1971. It's the ninth time in 2020 that mortgage rates have reached a new floor. A year ago, 30-year fixed-rate mortgages were averaging 3.56%.

Rates have dropped as mixed economic news has caused investors to flee the stock market for the relative safety of bonds. Demand for bonds pushes their prices up and their interest down — and as the bond yields dip, mortgage rates follow along.

The downwardly mobile mortgage rates are firing up Americans who want homes and those who already have them, says George Ratiu, senior economist at

"Homeowners have been taking advantage by refinancing their existing loans and locking in a lower monthly payment as a hedge for an uncertain future," Ratiu says. "Homebuyers continue placing offers on homes, pushing existing inventory toward historic lows."

The new all-time low for rates has made a record 19.3 million U.S. homeowners — 43% of all Americans holding 30-year mortgages — good refinance candidates, the mortgage data firm Black Knight reported on Thursday.

These homeowners have solid credit scores, could lower their mortgage rates by at least three-quarters of 1 percentage point (0.75), and would save an average of $299 a month.

The run of record-low rates may end soon

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Ultra-low mortgage rates may have an expiration date.

If rock-bottom rates are tempting you to refinance, or to buy a home, you may want to move quickly to beat a new 0.5% fee on refi loans. Lenders are expected to pass it along to consumers in the form of higher mortgage rates across the board.

Start shopping around now, so you'll lock a low rate before they're gone. Get multiple mortgage offers and compare them, to find the lowest rate for your area and credit score.

Lenders were startled to learn about the new charge last month, and were initially told it would take effect Sept. 1. Mortgage rates jumped in reaction.

But in late August, the Federal Housing Finance Agency delayed the start date to Dec. 1 — and rates came back down.

Experts say lenders could hike their rates again as early as October, in the runup to the fee.

It may contribute to "substantive increases" in mortgage rates in the coming weeks, and "will impact rates sooner than people think," says Matthew Speakman, an economist with Zillow.

Borrowers who aren't fast enough to avoid the higher mortgage rates will need to look for other savings — like by comparison shopping to find the lowest rate on homeowners insurance.

What other mortgage rates are doing

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Other average mortgage rates have gone down — and up.

The latest Freddie Mac survey shows rates on other popular types of mortgages are mixed this week.

The average for a 15-year fixed-rate mortgage has fallen again, to another new low — from 2.42% last week to just 2.37% now. Fifteen-year mortgages are often used as refinance loans; the rates are down sharply from a year ago, when the average was 3.09%.

Meanwhile, rates on 5/1 adjustable-rate mortgages, or "ARMS," have taken off over the last week. The rates on those loans are fixed for five years, then can adjust up or down every year, following the path of other rates in the economy.

ARMs are currently being offered at starter rates averaging 3.11%, way up from last week's 2.93%.

At this time in 2019, the typical initial rate on a 5/1 ARM was 3.36%.

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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