Tuesday, October 26

Today’s mortgage and refinance rates: October 1, 2021


For two straight weeks, fixed rates have been rising slightly while adjustable rates have been going down. Overall, both fixed and adjustable rates are still relatively low.

Low mortgage rates typically reflect a struggling economy, and the COVID-19 pandemic has hurt the US economy over the last year and a half.

High inflation is usually a sign that an economy is growing, and inflation in the US has been spiking since early 2021. Many people wonder if mortgage rates will increase as inflation grows.

Mortgage rates today

Conventional rates from Money.com; government-backed rates from RedVentures.

Mortgage refinance rates today

Conventional rates from Money.com; government-backed rates from RedVentures.

Will mortgage rates increase in 2021?

Even though inflation has been high this year, it’s unlikely that mortgage rates will significantly jump by the end of 2021.

Economists and the

Federal Reserve
have speculated that the spike in inflation could be temporary as businesses reopen after shutting down during the pandemic. They have stated that once businesses opening becomes the new norm and Americans get vaccinated, inflation could slow down.

The August Consumer Price Index shows that these speculations could be correct — inflation grew by 0.3%, which was lower than expectations and one of the slowest months this year.

If inflation continues to die down, we could see rates stay low into 2022.

Current fixed-rate and adjustable-rate mortgages

In the past couple of weeks, fixed mortgage rates have been inching upward as adjustable rates drop. An adjustable-rate mortgage (ARM) could be a good deal depending on your situation.

Fixed-rate mortgages lock in your rate for the entire life of your loan. Adjustable-rate mortgages lock in your rate for the first few years, then your rate goes up or down periodically.

Because adjustable rates are starting low, they are worthwhile options if you plan on selling your home before the interest rate changes. For instance, if you get a 7/1 ARM and want to move before seven years, you won’t risk paying a higher rate later.

But if you want to buy a forever home, a fixed rate could still be a better fit. Fixed rates are relatively low, and you won’t chance your rate increasing in a few years.



www.businessinsider.com

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