30-year mortgages

Arrow down and house with money on white wooden background. Falling market price of real estate.
ADragan / Shutterstock

The average interest rate on a 30-year fixed loan has slipped to 2.96%, mortgage giant Freddie Mac reported Thursday.

That bargain rate — the lowest since mid-February — was down from 2.98% last week. A year ago at this time, the average was 3.26%.

With the most recent drop, 30-year fixed mortgages have now remained under 3% for three straight weeks. The return of historically low rates is welcome news for homebuyers, says Sam Khater, Freddie Mac’s chief economist.

“It’s also good for homeowners who may have missed prior opportunities to refinance and increase their monthly cash flow,” he adds in the report.

Black Knight, a mortgage technology and data provider, says 13 million mortgage holders stand to save an average $283 each month by refinancing.

The right homeowners insurance policy protects you, your loved ones and your home.

Find the coverage you need at the most competitive rate in your area. Compare quotes from over 200 insurance companies with SmartFinancial.

Compare Now

15-year mortgages

The average rate on a 15-year fixed-rate mortgage dipped slightly to 2.30%, down from 2.31% last week.

These shorter-term mortgages are a popular option for borrowers who can afford higher monthly payments or are refinancing to slash their interest costs.

A year ago, the 15-year fixed rate was averaging 2.73%.

5/1 adjustable-rate mortgages

family asian entering their new home. buying new house concept
Odua Images / Shutterstock

The average rate on a 5/1 adjustable-rate mortgage hit 2.7% this week, up from its lowest level in years: just 2.64%. Last year, the average 5/1 rate was 3.14%.

Adjustable-rate mortgages generally start out with lower rates than their fixed-rate counterparts, but after a period of time the rates “adjust.” In other words, they move up or down in sync with the prime rate or another benchmark.

A 5/1 ARM is so named because it has a fixed rate for five years and then adjusts every year after that.

Compare current mortgage rates from top national lenders. Get the best rate for your purchase or mortgage refinance.

Compare Rates

Get ready for more homes to hit the market

Close up of house model with green grass and sold tablet on grey background. Concept of real estate and sales
Karramba Production / Shutterstock

With so few homes up for sale during the pandemic, competition has been scorching hot across the country. Bidding wars are driving up prices that were already uncomfortably high.

But now, would-be buyers stuck on the sidelines may have a chance to jump in.

George Ratiu, senior economist for Realtor.com, says recent data shows the number of sellers choosing to list their homes is growing as more states ease their COVID-19 restrictions.

“For first-time homebuyers, rising inventory and low interest rates open the window of opportunity wider as we move through May, hinting that we might see price gains begin to moderate,” he says in a statement.

Tips to find the lowest rates

Happy young couple getting keys of their new home
ESB Professional / Shutterstock

If you’re eager to land a cheap rate before they rise again, the first step is to make sure you have a solid credit score. If you don’t know what your score is, it’s easy these days to take a peek for free.

Then, to ensure you maximize your savings, you have to shop around. Studies have shown that getting mortgage offers from multiple lenders — five at a minimum — can mean paying thousands less over time.

And while you’re shopping around, consider gathering quotes from multiple insurers, too. It’s easy to fixate on mortgage rates, but a lower premium on your homeowners insurance will also translate into major savings in the long run.

Get peace-of-mind on your home insurance

Homeowners insurance buys you peace of mind. But are you sure you’re not paying too much for home insurance?

SmartFinancial compares quotes from over 200 insurance companies to check for discounts and help you find lower rates in your area.

Use SmartFinancial right now and stop overpaying for home insurance.

About the Author

Nancy Sarnoff

Nancy Sarnoff

Freelance Contributor

Nancy Sarnoff is a freelance contributor with MoneyWise. Previously, she covered commercial and residential real estate for the Houston Chronicle where she also hosted Looped In, a podcast about the region’s growth, development and economy. Her work has been recognized by the National Association of Real Estate Editors and the Society of American Business Editors and Writers.

What to Read Next

Disclaimer

The content provided on MoneyWise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.