Today’s mortgage and refinance rates 

Average mortgage rates fell yesterday, as we predicted. And conventional loans today start at 3.063% (3.063% APR) for a 30-year, fixed-rate mortgage.

Mortgage rates have fallen by a worthwhile amount over the last couple of days. But not by enough to make up for the rises earlier in the week.

Still, there’s a good chance we’ll see further modest falls next week, though Monday may bring a small rise. But all this assumes no unforeseen events that change the outlook.

Find and lock a low rate (Nov 14th, 2020) Find and lock a low rate (Nov 14th, 2020)

COVID-19 mortgage updates: Mortgage lenders are changing rates and rules due to COVID-19. To see the latest on how coronavirus could impact your home loan, click here.

Should you lock a mortgage rate today?

Choosing when to lock isn’t a science. There are too many variables to be sure you’re making the right choice.

But I personally wouldn’t lock today unless my closing was due in the next week or two. Why? Because I have a feeling (based on some analysis) that we might see further falls in mortgage rates soon.

Of course, my feeling may well be overtaken by events. But, in the absence of better information, my personal recommendations are:

• LOCK if closing in 7 days
• LOCK if closing in 15 days
• FLOAT if closing in 30 days
• FLOAT if closing in 45 days
• FLOAT if closing in 60 days

However, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So be guided by your gut and your personal tolerance for risk.

What’s moving current mortgage rates

We don’t see much on the horizon to force mortgage rates appreciably higher. And most of the likely influences we perceive are likely to push them slowly and gently lower — with occasional and brief rises.

But you shouldn’t rely on that scenario for two reasons. First, unexpected news can emerge at any time, such as Pfizer’s vaccine announcement earlier this week. And, secondly, investors often perceive reality differently from us regular folk.

Election

Investors generally have accepted the result of the presidential election, as called by the networks. And they so far don’t seem all that fazed by President Donald Trump’s unwillingness to concede.

However, if that drags on too long, and begins to cause issues that may affect the economy (perhaps stemming from a disrupted transition), they might begin to react. The good news? If they do, it’s likely to see a fall in mortgage rates.

Conversely, there could be a modest bump in those rates if and when the president does concede. It would be one element of uncertainty investors can forget.

Pandemic

Assuming it completes its trials and is distributed quickly, Pfizer’s vaccine could change everything. And markets rightly celebrated the surprise announcement of its efficacy figures earlier in the week.

However, it’s pretty much bound to be several months before any COVID-19 vaccine has been administered to enough people to materially change the course of the pandemic.

And, right now, every pandemic-related figure is grim. A new, undeniable surge is upon us.

According to The New York Times, yesterday saw 181,194 new cases confirmed in America. And, tragically, 1,389 new deaths. Those numbers have risen over the past 14 days by 76% and 34% respectively.

And, understandably, state governors and city mayors are responding with tighter restrictions across much of the country. Those will inevitably blunt and possibly reverse the economic recovery following COVID-19’s first wave. Markets can’t ignore that.

Markets

Or can they? Last week saw records broken by some stock indexes. And futures are further elevated this morning, meaning they’re likely to open higher on Monday morning, absent unexpected news.

However, in weekend trading, the yield on 10-year Treasurys (the number that mortgage rates shadow most closely — most of the time) remains very close to where it was at the same time on Friday morning.

But it was rising overnight. And if it continues in that direction, we may see just slightly higher mortgage rates during Monday.

Economic reports this week

There are a couple of big reports this coming week, both due out on Tuesday. If either of them is unexpectedly good, they may put upward pressure on mortgage rates. If they disappoint, expect downward pressure.

Tuesday’s two are retail sales and industrial production. A couple of less important ones are published on Thursday: existing home sales and leading indicators.

Of course, all these relate to October. And, with the pandemic surging, that’s already ancient history. Still, if investors have an outstanding skill it’s straw clutching. So, if it suits them, they may treat the data as relevant, even if it isn’t.

Find and lock a low rate (Nov 14th, 2020)

Mortgage interest rates forecast for next week

So, in summary, I’d be surprised if mortgage rates moved far this week. And, in my mind, the most likely scenario is that they start very slightly higher and edge back down by Saturday to a level just a little lower than today’s.

But, as we’ve seen in recent days, there are big and highly unpredictable events in play at the moment. So there are no guarantees.

Mortgage and refinance rates usually move in tandem. But note that refinance rates are currently a little higher than those for purchase mortgages. That gap’s likely to remain constant as they change.

How your mortgage interest rate is determined

Mortgage and refinance rates are generally determined by prices in a secondary market (like the stock or bond markets) where mortgage-backed securities are traded.

And that’s highly dependent on the economy. So mortgage rates tend to be high when things are going well and low when the economy’s in trouble.

Your part

But you play a big part in determining your own mortgage rate in five ways. You can affect it significantly by:

1. Shopping around for your best mortgage rate — They vary widely by lender
2. Boosting your credit score — Even a small bump can make a big difference to your rate and payments
3. Saving the biggest down payment you can — Lenders like you to have real skin in this game
4. Keeping your other borrowing modest — The lower your other monthly commitments, the bigger mortgage you can afford
5. Choosing your mortgage carefully — Are you better off with a conventional, FHA, VA, USDA, jumbo or other loan?

Time spent getting these ducks in a row can see you winning lower rates.

Remember, it’s not just a mortgage rate

Be sure to count all your forthcoming homeownership costs when you’re working out how big a mortgage you can afford. So focus on your “PITI” That’s your Principal (pays down the amount you borrowed), Interest (the price of borrowing), (property) Taxes, and (homeowners) Insurance. Our mortgage calculator can help with these.

Depending on your type of mortgage and the size of your down payment, you may have to pay mortgage insurance, too. And that can easily run into three figures every month.

But there are other potential costs. So you’ll have to pay homeowners association dues if you choose to live somewhere with an HOA. And, wherever you live, you should expect repairs and maintenance costs. There’s no landlord to call when things go wrong!

Finally, you’ll find it hard to forget closing costs. Those will be reflected in the annual percentage rate (APR) you’ll be quoted. Because that effectively spreads them out over your loan’s term making that higher than your straight mortgage rate.

But you may be able to get help with those closing costs your down payment, especially if you’re a first-time buyer. Read:

Down payment assistance programs in every state for 2020

Mortgage rate methodology