Mortgage Rates For March 5, 2024: What You Need to Know About Adjustable Rate Mortgages
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When it comes to shopping for mortgages, you might have several options when it comes to the type of mortgages available to you (this can vary by circumstance, market, and credit score). One type of mortgage is an ARM, or adjustable rate mortgage.
ARMs have mortgage interest rates that fluctuate over time. Generally, the initial interest rate is very low compared to a standard fixed-rate mortgage, but over time, the rate can increase within set guidelines. The popular FHA loan does have an ARM option, which the FHA indicates could be better for those:
- Looking to sell within their first few years of the mortgage
- Expecting increases in income
- Facing a high fixed-rate mortgage trend.
Today’s 30-year mortgage interest rates
The average daily mortgage interest rate for Tuesday, March 5, 2024 is 7.03% for a 30 year fixed rate. The rate fell 0.06% from yesterday and 0.31% from December 2023. This information is sourced daily from correspondent, retail, and wholesale lenders located in the United States.
Today’s 15-year mortgage interest rates
The average daily mortgage interest rate for Tuesday, March 5, 2024 is 6.52% for a 15 year fixed rate. The rate fell 0.06% from yesterday and 0.45% from December 2023. This information is sourced daily from correspondent, retail, and wholesale lenders located in the United States.
More about ARMs
ARMs refer to loans that go by other names as well: variable-rate mortgages and floating mortgages. If you choose a loan, it’s important you recognize in the terms just how and when your rate can increase. It’s recommended that you can afford the rate with the increase at the time of taking out the loan, even though your initial interest rate is lower.
This could work well for certain situations. Let’s say you have two years left on your auto loan, but your ARM interest rate can’t increase for at least two years. That means the money you were spending on a car loan, once paid off, can go towards the increased interest on your loan instead, giving you enough breathing room to comfortably afford both a car loan and home loan payment for those first two years.
ARMs have two periods in the loan. First is the fixed period, where the interest rate will not be adjusted. That’s followed by the adjusted period, where the rate is based upon specific benchmarks and market conditions defined in the loan contract.
