Mortgage Rates for July 6, 2020

If you’ve been looking forward to another mortgage rate drop, you’re in for some good news. Several mortgage rates declined today, including the rates on 30-year and 15-year fixed mortgages, along with the rates on 5/1 adjustable mortgages.

Mortgage rate trends across the country have been in a constant state of fluctuation for the last few months, dropping due to the COVID-19 pandemic and then increasing due to demand. These new rate drops are in response to the significant recent increase in COVID cases across the nation, which is causing some questions about the economic stability and job market in the U.S.

Right now, mortgage rates are at an all-time record low, so if you’ve been considering a refinance or home purchase, this may be the time to make your move. Just make sure you do your homework and shop around for different rates and lenders before locking in an interest rate. View current mortgage rates from a variety of products.

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Current rates for 30-year fixed-rate loans

Rates on 30-year fixed-rate loans dropped today, and rates for this type of loan now start as low as 3.125% APR. That’s down significantly from a week ago, when 30-year fixed loan rates were 5 basis points higher. It’s also quite a bit lower than the rates we were seeing a month ago, when the average rate on this type of loan was at 3.52% APR.

Current rates for 15-year fixed-rate loans

The rates on 15-year fixed-rate loans also fell today, with the average rate for this type of loan now at 2.75% APR. That’s a significant drop from last week’s average rates, which were 4 basis points higher. Considering that the average rate for a 15-year fixed-rate loan in July of 2019 was 3.20% APR, that current 2.75% APR is looking pretty good for buyers who are interested in this type of mortgage.

Current rates for 5/1 ARM loans

The rates for 5/1 adjustable-rate mortgage loans dropped today too, though not as significantly as 15- or 30-year fixed-rate loans. The current average rate for 5/1 ARM loans is 3.12%, which is down 1 basis point from last week.

Where mortgage rates are headed

It’s tough to know exactly where rates are headed next given the volatility in the market. Mortgage rates have been vastly affected by the COVID-19 pandemic, which has caused significant damage to the economy and caused mortgage rates to fluctuate on a regular basis.

According to Freddie Mac, a couple of notable changes occurred recently that could indicate where mortgage rates are headed, including:

  • The mortgage rate downward trend continued over the last week, which could signal a drop to below 3% later this year if the downward trend continues.
  • Economic activity appears to have paused in the last couple of weeks with modest declines in consumer spending and a pullback in purchase activity, which could indicate that consumers are hesitant to spend money right now. This could also affect interest rates over time.

It’s also possible that these new low rates will increase interest in mortgage loans, which could push lenders to increase their rates based on demand, causing yet another fluctuation in rates. After all, more than 75% of homeowners have rates above 3.5%, which means that there could be a ton of interest in refinancing at the newer, lower rates. Whether that will happen remains to be seen, though.

The final word

Just make sure not to drag your feet if you’re serious about buying or refinancing right now. Rates are unpredictable and lenders are tightening their requirements for borrowers due to demand and the economic outlook, so you need to move quickly if you want to lock in that record-breaking low rate.

Angelica Leicht

Mortgage Researcher

Angelica Leicht is a writer and editor who specializes in everything mortgage-related for Her work has spanned topics that include lending product reviews, interest rate trends, racial biases in mortgage lending and the role of fintech in lending practices, and has appeared in publications such as Interest, The Simple Dollar, Bankrate, The Spruce, Houston Press and VeryWell, among others.