The current mortgage rate on a 30-year fixed mortgage fell by 0.14 percentage point in the last week to 6.97%, according to the Mortgage Research Center.
Meanwhile, the APR on a 15-year fixed mortgage dropped 0.21 percentage point during the same period to 6.01%.For existing homeowners, compare your current mortgage rates with today’s refinance rates.
30-Year Mortgage Rates
Today's average rate on a 30-year, fixed-rate mortgage is 6.97%, which is 0.14 percentage point lower than last week.
The interest plus lender fees, called the annual percentage rate (APR), on a 30-year fixed mortgage is 7.01%. The APR was 7.14% last week.
To get an idea about how much you might pay in interest, consider that the current 30-year, fixed-rate mortgage of 6.97% on a $100,000 loan will cost $663 per month in principal and interest (taxes and fees not included), the Forbes Advisor mortgage calculator shows. The total amount you'll pay in interest during the loan's lifespan is $138,760.
15-Year Mortgage Rates
Today, the 15-year mortgage rate declined to 6.01%, lower than it was at this time yesterday. Last week, it was 6.22%.
On a 15-year fixed, the APR is 6.07%. Last week it was 6.28%.
A 15-year fixed-rate mortgage of $100,000 with today's interest rate of 6.01% will cost $844 per month in principal and interest. Over the life of the loan, you would pay $51,962 in total interest.
Jumbo Mortgage Rates
The current average interest rate on a 30-year, fixed-rate jumbo mortgage (a mortgage above 2025's conforming loan limit of $806,500 in most areas) is 7.21%— 0.19 percentage point down from last week.
A 30-year jumbo mortgage at today's fixed interest rate of 7.21% will cost you $679 per month in principal and interest per $100,000. That adds up to roughly $144,608 in total interest over the life of the loan.
How To Calculate Mortgage Payments
Mortgages and mortgage lenders are often a part of purchasing a home, but it can be tough to understand what you're paying for—and what you can actually afford.
Using a mortgage calculator can help you estimate your monthly mortgage payment based on your interest rate, purchase price, down payment and other expenses.
Here's what you'll need in order to calculate your monthly mortgage payment:
- Home price
- Down payment amount
- Interest rate
- Loan term
- Taxes, insurance and any HOA fees
What’s an APR, and Why Is It Important?
The APR, or annual percentage rate, includes the mortgage interest rate and lender fees over the life of the loan. This is an important figure because it gives borrowers a better snapshot of what they will pay for a mortgage as it shows the total cost of a mortgage if you keep it for the entire term.
How Are Mortgage Rates Determined?
Multiple factors affect the interest rate for a mortgage, including the economy's overall health, benchmark interest rates and borrower-specific factors.
The Federal Reserve's rate decisions and inflation can influence rates to move higher or lower. Although the Fed raising rates doesn't directly cause mortgage rates to rise, an increase to its benchmark interest rate makes it more expensive for banks to lend money to consumers. Conversely, rates tend to decrease during periods of rate cuts and cooling inflation.
Home buyers can make several moves to improve their finances and qualify for competitive rates. One is having a good or excellent credit score, which ranges from 670 to 850. Another is maintaining a debt-to-income (DTI) ratio below 43%, which implies less risk of being unable to afford the monthly mortgage payment.
Further, making a minimum 20% down payment can help you avoid private mortgage insurance (PMI) on conventional home loans. If you can afford the larger monthly payment, 15-year home loans have lower rates than a 30-year term.
What Is the Best Type of Mortgage Loan?
Conventional home loans are issued by private lenders and typically require good or excellent credit and a minimum 20% down payment to get the best rates. Some lenders offer first-time home buyer loans and grants with relaxed down payment requirements as low as 3%.
For buyers with limited credit or finances, a government-backed loan is usually the better option as the minimum loan requirements are easier to satisfy.
For example, FHA loans can require 3.5% down with a minimum credit score of 580 or at least 10% down with a credit score between 500 and 579. However, upfront and annual mortgage insurance premiums can apply for the life of the loan.
Buyers in eligible rural areas with a moderate income or lower may also consider USDA loans. This program doesn't require a down payment, but you pay an upfront and annual guarantee fee for the life of the loan.
If you come from a qualifying military background, VA loans can be your best option. First, you don't need to make a down payment in most situations. Second, borrowers pay a one-time funding fee but don't pay an annual fee as the FHA and USDA loan programs require.
Frequently Asked Questions (FAQs)
What is a good mortgage rate?
A competitive mortgage rate currently ranges from 6% to 8% for a 30-year fixed loan. Several factors impact mortgage rates, including the repayment term, loan type and borrower’s credit score.
How can I get a lower mortgage interest rate?
Comparing lenders and loan programs is an excellent start. Borrowers should also strive for a good or excellent credit score between 670 and 850 and a debt-to-income ratio of 43% or less.
Furthermore, making a minimum down payment of 20% on conventional mortgages can help you automatically waive private mortgage insurance premiums, which increases your borrowing costs. Buying discount points or lender credits can also reduce your interest rate.
How long can you lock in a mortgage rate?
Most rate locks last 30 to 60 days and your lender may not charge a fee for this initial period. However, extending the rate lock period up to 90 or 120 days is possible, depending on your lender, but additional costs may apply.
More From Advisor
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