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Mortgage Rates Expected to Stay Near 3% Through End of Year

Updated: Dec 7, 2021

Refinancing remains a strong choice for many families



The COVID-19 pandemic hit the US economy hard, and that was evident in the epically low mortgage rates (which typically dip with the economy). During 2020 and 2021, records were repeatedly broken for the lowest average rates in more than 50 years of Freddie Mac tracking. Mortgage rates are still hovering near those all-time lows, but they have been inching upward in recent months.


Next year, mortgage rates are expected to climb significantly, partially based on the actions of the Federal Reserve. To bolster the struggling economy during the pandemic, the Fed has been buying large volumes of mortgage-backed securities, among other assets. The agency will be winding down this effort moving forward, according to a November announcement.


Today, average rates are outstanding. Refinancing is still wise for many families.

What are the current rates? Should I refinance?


The rate averages from the Freddie Mac Primary Mortgage Market Survey for the week ending December 2, 2021, are as follows (with the averages for Minnesota borrowers listed in parentheses):

  • 15-year fixed rate mortgage (FRM) — 2.39 percent (2.43 percent)

  • 30-year fixed rate mortgage (FRM) — 3.11 percent (3.13 percent)

  • 5/1-year adjustable rate mortgage (ARM) — 2.49 percent (3.00 percent).

All of these average rates are outstanding. Refinancing is still wise for many families.


"“For the first time ever, I felt that this process... can be seamless.” — Ankush Modi, following a recent mortgage refinance with BAM


Qualifying for mortgages in Minnesota


While there are other options, three of the most common types of mortgages available are conventional, FHA, and VA. Here is a little information on qualifying for each.


Conventional mortgages


Typically you will need the following:

  • 620 or above credit score

  • 45 percent or lower debt-to-income (DTI) ratio

  • 10 percent of loan or higher down payment

  • 20 percent or higher down payment to avoid private mortgage insurance (PMI).

Federal Housing Administration (FHA) loans


Qualification is possible with the following:

  • 500 or above credit score

  • DTI ratio of 31 percent to 41 percent

  • 3.5 percent or higher down payment with a 580+ credit score

  • 10 percent down payment with a 500 to 579 credit score.

Veterans Affairs (VA) loans


You do not need private mortgage insurance or a down payment to get a VA loan, as long as you are an active-duty Armed Forces member or qualifying veteran.


Choosing the right type of mortgage should not be oversimplified.

Getting the best mortgage for your situation


Choosing the right type of mortgage should not be oversimplified. After all, homes are the largest purchases that most homeowners make in their entire lives. Getting the right advice is crucial.


At Best Advantage Mortgage (BAM), as of today, all 56 of our Google Reviews are 5 stars! “We used Best Advantage Mortgage (BAM) for our refinancing needs,” wrote Ankush Modi in his review two weeks ago. “For the first time ever, I felt that this process does not need to be too painful and can be seamless.” Apply now!

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