Today’s Mortgage and Refinance Rate: July 7, 2021

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Mortgage rates today match the pattern of recent months: average purchase rates are generally lower than refinance rates, and government-guaranteed mortgages like VA and FHA loans – as well as fixed mortgages age 15 – carry the lowest rates of all. Rates are expected to stay low for the coming weeks, and today is a good day to lock in a low rate.

If you’re ready to buy or refinance, you’ll probably want a fixed rate mortgage rather than an adjustable rate mortgage. ARM rates are starting to be higher than fixed rates right now, and you could risk your rate going up even more in a few years. It’s safest to lock in an all-time low rate while you can.

Mortgage rates today

Money.com conventional rates; RedVentures government guaranteed rates.

Today’s refinance rate

Money.com conventional rates; RedVentures government guaranteed rates.

What is a mortgage rate?

A mortgage rate is the interest you pay on the money you borrow from a lender to buy or refinance your home. These are basically the fees you pay to borrow, expressed as a percentage. For example, you can take out a mortgage for $ 200,000 plus an interest rate of 2.75%.

There are two types of mortgage rates: fixed rates and adjustable rates.

A fixed rate mortgage lock in your rate for the duration of your mortgage. Even if the rates in the US market go up or down, your rate will stay the same. It’s a good deal right now, as rates are at historically low levels.

A adjustable rate mortgage keeps your rate the same for a predetermined amount of time, then changes it periodically. A 10/1 ARM locks in your rate for the first 10 years, then the rate fluctuates once a year. It’s a riskier approach these days because ARM rates start higher than fixed rates, and you risk your rate going up later.

How are mortgage rates determined?

Mortgage rates are determined by a combination of factors – some you can control and some you cannot.

The main external factor is economy. Interest rates tend to be higher when the US economy is booming and lower when it is struggling. The two main economic factors that affect mortgage rates are employment and inflation. When the number of jobs and inflation increase, mortgage rates tend to rise.

You can control your finances, But. The better your credit score, debt-to-income ratio, and down payment, the lower your rate should be.

Finally, your mortgage rate depends on what type of mortgage you obtain. Government guaranteed mortgages (like FHA, VA, and USDA loans) charge the lowest rates, while jumbo mortgages charge the highest rates. You will also get a lower rate with a shorter mortgage term.

What credit score do you need for a mortgage?

Each type of mortgage loan has a different minimum credit score requirement. Here’s how it typically breaks down:

These are just the general rules of thumb, however. Every lender has the right to demand a higher or lower credit score. (Although the FHA minimums listed here are the lowest a lender allows.)

If your credit score is above the minimum required by a lender, you could get a better mortgage interest rate.

Find out more and get offers from several lenders »

Mortgage rates last week and last month

Mortgage rate trends

Trends in refinancing rates


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