If you spot a good mortgage rate, you may want to consider locking it — and not letting it get away.

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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This week's numbers

Miniature wooden houses and a red arrow down.Falling interest rates
Andrii Yalanskyi / Shutterstock

Rates on 30-year fixed-rate mortgages have fallen to an average 3.69% this week, from 3.78% last week, mortgage giant Freddie Mac said Thursday.

“After a year-long slide, mortgage rates hit a cycle low in September 2019 and have risen in six out of the last nine weeks due to modestly better economic data and trade related optimism,” explains Sam Khater, Freddie Mac’s chief economist.

The benchmark mortgage rate has returned to where it was in mid-October. The loans in the Freddie Mac survey come with an average 0.5 point.

The really big news remains the same: Rates are sharply lower compared to this time last year, when 30-year mortgages were more than a full percentage point higher — averaging 4.94%.

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

Still time to refinance

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If you took out a home loan even just last year, you might still be able to lower your monthly payment dramatically by doing a refinance into a new loan at a lower rate. Compare refi offers from multiple banks by visiting Lending Tree.

Homeowners who refinanced their mortgages during the spring of this year are now saving an average of about $140 a month, or $1,700 per year, Freddie Mac said recently.

Refinances are up a sharp 144% versus last year at this time, the Mortgage Bankers Association says. To put it another way, lenders are dealing with about two and a half times as many refi applications as they were receiving during the fall of 2018.

Compared to a week earlier, refinance applications rose 2% last week.

The outlook for mortgage rates

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Applications for loans to buy homes fell 3%. "Purchase applications fell slightly last week but remained almost 7% higher than a year ago," says Joel Kan, associate vice president of forecasting for the Mortgage Bankers Association.

Low mortgage rates have helped heat up demand for homes. That's squeezing the inventory of houses available for sale, putting pressure on home prices and keeping some would-be buyers on the sidelines.

The market for houses is likely to stay strong because mortgage rates are expected to remain at appealingly low levels.

For the remainder of this year, Freddie Mac is forecasting that 30-year mortgage rates will average just 3.7%. The prediction calls for rates to increase just slightly next year, to an average 3.8%.

This week's other mortgage rates

Real Estate: Agent Shows Information To Couple
Sean Locke Photography / Shutterstock
Demand for homes has been hot.

Besides 30-year mortgages, rates on other types of home loans also have dropped back this week.

The average for 15-year mortgages has dipped to 3.13%, from 3.19% last week.

Those shorter-term home loans are a popular option for refinance loans. Last year at this time, 15-year fixed-rate mortgages were averaging 4.33%, Freddie Mac says.

And, rates have fallen for 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%, down from 3.43% last week. One year ago, those ARM starter rates were averaging 4.14%.

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 CNBC.com and has been interviewed on Fox Business, CBS Radio and the syndicated TV show "First Business."

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