Some borrowers prefer the lower interest rate and shorter term of the 15-year fixed-rate mortgage. The debt is paid off faster with lower overall costs. The monthly payments, however, will be higher compared to a similar longer-term loan, making it less manageable for some.
The latest rates on adjustable-rate mortgages
- The latest rate on a 5/1 ARM is 2.856%. ⇔
- The latest rate on a 7/1 ARM is 3.134%. ⇔
- The latest rate on a 10/1 ARM is 3.207%. ⇑
An adjustable-rate mortgage will have a fixed introductory interest rate for a specific number of years before the rate becomes variable and starts resetting at regular intervals. The interest rate on a 5/1 ARM, for instance, will be fixed for the first five years, then adjust annually. The advantage of an ARM is that the introductory rate is typically very low. The potential disadvantage is that the rate could see a big increase once it becomes adjustable.
The latest VA, FHA and jumbo loan rates
The average rates for FHA, VA and jumbo loans are:
- The rate on a 30-year FHA mortgage is 4.025%. ⇑
- The rate on a 30-year VA mortgage is 4.352%. ⇓
- The rate on a 30-year jumbo mortgage is 3.852%. ⇔