A guide to current mortgage rates

Current average APRs and weekly mortgage rate analysis


Elissa Suh

Published June 29, 2020

Advertising Disclosure


  • The coronavirus pandemic has disrupted the economy and led to lower mortgage rates

  • Mortgage rates for 30-year fixed-rate mortgages will go down in 2020, or at the very least remain low, according to mortgage industry professionals

  • The exact mortgages rates a lender offers you will vary based on where you live and your financial situation

This week interest rates hold steady for mortgages. Reports indicate that the U.S. is officially in a recession, and an uptick in new coronavirus cases threatens the country’s economic recovery. Now is generally a very good time to get a mortgage, though buyers may encounter low home inventory and rising sale prices. Mortgage industry experts predict even lower interest rates in 2020.

Current average mortgage rates for June 29, 2020

Mortgage typeThis week's APRLast week's APRChange from last week
30-year fixed-rate mortgage3.13%3.13%0.00%
15-year fixed-rate mortgage2.59%2.58%+0.01%
5/1 ARM (5-year adjustable-rate mortgage)3.08%3.09%-0.01%

What’s affecting mortgage rates today?

The primary factor affecting mortgage rates right now is the U.S. economy and its long road to recovery. Mortgage rates tend to fall when the economy isn’t doing well, and that’s holding true during the coronavirus pandemic. There are also some other factors worth watching because their impact on the U.S. economy could affect future mortgage rates:

3 mortgage rate factors we’re monitoring this week are:

  • The U.S. economy and its potential recovery
  • The stock market
  • Treasury bonds

How the U.S. economy is affecting mortgage rates

The U.S. economy has contracted significantly due to the coronavirus pandemic. According to the National Bureau of Economic Research, the country officially fell into a recession in February. How quickly the economy can recover will have the biggest impact on whether mortgage rates go down in 2020.

Jobless claims have declined over the past few weeks, but are still historically elevated — previously the most new claims for unemployment benefits in a week was 695,000 in 1982. Last week was the 14th consecutive week that more than one million people claimed unemployment insurance.

A resurgence of COVID-19 cases in the U.S. threatens to thwart economic recovery. As of today, new cases are rising in at least 30 states, and more than a quarter of all known coronavirus deaths have been in this country, where the total number of cases exceeds 2.5 million according to the New York Times. Some states like Texas and Florida, which have witnessed an accelerating number of cases and hospitalizations, have reversed their reopening plans.

Economic recovery is centrally linked to the country’s ability to handle the coronavirus. If COVID-19 cases continue to rise, then mortgage rates will remain low in the future.

The stock market & mortgage rates

A big part of the U.S. economy’s strength over the past few years was the strength of the stock market. Stock market gains do not directly affect mortgage interest rates, but mortgage rates tend to stay low when the stock market performs poorly.

The coronavirus pandemic has led to volatility in the stock market.

  • Since a historic drop on March 23, the market indexes have mostly returned to pre-coronavirus levels.
  • The markets fell after Federal Reserve chairman Jerome Powell warned in May that “the scope and speed of this downturn are without modern precedent,” but then stocks recovered steadily.
  • Last week markets were hit hard as states halted reopening procedures. The Dow, Nasdaq and S&P 500 were all down more than 2% with the S&P reaching its lowest level in two weeks.

The Treasury bond market & mortgage rates

More than any other factor, mortgage interest rates tend to follow the yield on the 10-year Treasury bond. The yield usually falls as more investors buy bonds, which are a less risky investment than stocks. So decreasing bond yields may signal that investors have lower confidence in the stock market.

The 10-year Treasury note yield has declined for three consecutive weeks and hit a six-week low on Friday, June 26. The yield may also continue to fall if investors’ confidence weakens during the economic recovery in the U.S.

In general, the mortgage interest rate tends to go down when the Treasury yield falls. However, bonds have been less reliable as a predictor of mortgage rates during the coronavirus pandemic, which has made everything more volatile. Some experts believe that the interest rates should actually be even lower, since they don’t match how low the Treasury yield is.

Will mortgage rates go down in 2020?

While mortgage rates may fluctuate slightly week to week, low rates are likely to stay for the immediate future as it will take months to reach pre-pandemic levels of stability, according to economists.

The Federal Reserve announced its plans to keep buying more bonds and mortgage-backed securities, which would also ensure a low-rate environment for the foreseeable future (this would include low mortgage rates). Some mortgage industry professionals like Fannie Mae predict average mortgage rates for 30-year FRMs could go down to 3.0% by the end of 2020 and even lower in 2021 to 2.9%.

Is now a good time to get a new mortgage?

If you're a homebuyer, you may not want to wait too long for lower interest rates in the future. The real estate market has suffered depressed home sales due to the pandemic and quarantine, which has subsequently led to pent-up buyer demand in recent weeks. As states reopen, many people enticed by low rates are looking to buy homes, but there aren’t enough sellers — housing inventory is down 29%, according to a survey from the National Association of Realtors. The same survey revealed that median home prices are trending 5.6% higher than pre-pandemic levels.

Additionally, many mortgage lenders have been more strict about who they lend to, so only the most qualified buyers will get the lowest rate. It’s more important than ever to make sure your financials are in order and that you can afford your monthly mortgage payment in case an unexpected turn of events leaves you without an income.

Is now a good time to refinance?

Refinancing activity is up 76% compared to this time last year as current homeowners try to take advantage of low mortgage rates.

If interest rates are lower than your current mortgage rate by even a few tenths of a percent, a mortgage refinance could help lower your monthly payment and save you hundreds or thousands of dollars over the lifetime of the loan.

Always remember to shop around for the best rate since the exact mortgage rates a lender offers will vary based on where you live, your financial situation, and the lender’s own financial situation.


A mortgage makes a house your own. Insurance protects it.

Policygenius can help you find a homeowners insurance policy that fits your needs and your budget.

Deep dive: Mortgage rate factors you can’t control

There are a number of factors that determine current mortgage rates, only some of which you can control. In general terms, mortgage rates are lower (and better for homebuyers) when the economy is struggling or when the economic outlook is not good. That’s because investors look for safer, longer-term investments when they think the economy is on the decline. For example, they buy more 10-year Treasury notes instead of short-term notes (this is what economists are referring to when they talk about the yield curve inverting). The mortgage interest rates trend similarly to the path of the 10-year Treasury bond market.

Investors also buy more mortgage-backed securities (MBSs) when the economy isn’t doing well. An MBS is a collection of individual mortgages, and people can trade them on the market the same way they trade bonds.

Banks and other mortgage lenders can offer lower mortgage rates to customers when investors are buying more MBSs. On the other hand, less demand for MBSs can lead to an increase in mortgage rates.

General economic factors have a big impact on mortgage interest rates. This includes things like the strength of the job market, the inflation rate, and the state of the overall housing market. International economies and U.S. trade relations also impact mortgage rates.

With something like employment numbers, the biggest impact to mortgage rates comes when the data in government reports don’t match expectations. Regardless of whether or not the numbers are good or bad, changes in mortgage rates usually come when the numbers differ greatly from what investors predicted they would be.

The Federal Reserve also sets the interest rates for banks and other financial institutions to lend money to each other, which is called the federal funds rate. These financial institutions attach a premium to the federal rate to come up with their own lending rate: the prime rate.

Using the prime rate as a benchmark, lenders and financial institutions then offer a range of loan interest rates to consumers. For example, you may get a mortgage loan with an interest rate above 4% even if the average national mortgage rate is 3.65%. At the same time, you could get a lower interest rate.

How to get a low mortgage interest rate: Mortgage rate factors you can control

What specific rates a lender offers you depends largely on your credit score and other details like the loan amount and loan type. These are factors you can influence (to a degree). You can take steps to improve your credit score. You can also ask for a smaller mortgage loan by choosing a house you can afford and then making the biggest down payment you can afford.

Try our free mortgage calculator to see how much of a mortgage you can afford based on the current mortgage rates.

Lenders often look closely at the borrower’s loan-to-value ratio (LTV ratio). This is the amount of the loan as a percentage of the home’s value. If you get a $180,000 mortgage for a $200,000 home, the mortgage (and your LTC ratio) is 90%. LTV ratios above 80% are seen as more risky and result in higher interest rates.

Understand your monthly mortgage payment better by looking at your mortgage amortization schedule.

A mortgage is a big financial decision, so it’s important to make the best decision you can. Here are four steps to help you find the best mortgage rates:

1. Maximize your credit score

Mortgage lenders use your credit score to determine what rates they will offer you. In particular, they look at your FICO score and a higher score will get you better rates. That’s why it’s important to do as much as you can to increase your credit score before you apply for any new loans. Learn more about what a good credit score is and how to get the best credit score.

2. Know what type of mortgage you need

There are multiple types of mortgage loans and different features, too. What you should get depends on your financial situation. For example, you might get a mortgage through a government loan program, like a VA loan or FHA loan or conventional mortgage from a private mortgage lender. In certain circumstances, you may also want to consider an adjustable-rate mortgage a hybrid ARM mortgage, or a traditional mortgage with a fixed rate. People who want to pay off debt more aggressively may opt for a shorter loan term.

Here are 13 mortgage questions you should ask yourself before getting a home loan.

3. Compare rates from multiple lenders

Like any other purchase, you should shop around before getting a mortgage. If you are a customer at a local bank or credit union, make sure to ask what kind of rates they can offer. Sometimes long-time customers receive preferential (lower) interest rates.

Keep in mind that a mortgage rate is expressed as an annual percentage rate, or APR for short. Annual percentage rates reflect the lender’s interest rate, but they are also affected by other lender costs, such as points and fees.

4. Make the right down payment

For conventional loans, the more you put as a down payment, the smaller your loan amount and monthly payment and overall mortgage costs will be.

This is a big deal because the longer your mortgage term, the more you will have to pay in mortgage interest. Over the term of a mortgage, interest can cost nearly as much as the mortgage principal itself.

If you make a down payment of less than 20%, you will also have to pay private mortgage insurance (PMI). The closer your down payment is to 20%, the more you can save on PMI. Also, make sure to set aside some money to pay cover closing costs and other unexpected costs of owning a home.

Get the latest money news and financial advice from Policygenius experts, delivered right to your inbox.