Current Mortgage Rates
3.184% for the 30-year fixed mortgage rate,
2.481% for the 15-year fixed mortgage rate, and
2.666% for the 5/1 adjustable-rate mortgage (ARM) rate.
One day ago, the typical rate on America’s most applied for home loan, the 30-year fixed-rate mortgage, was 3.184% and one month ago the average rate was 3.124%.
Data provided by Brown Bag Media, LLC. Payments do not include amounts for taxes and insurance premiums. The actual payment obligation will be greater if taxes and insurance are included. Click here for more information on rates and product details.
The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where and in what order products appear. Compensation is higher for Featured placements. This table does not include all companies or all available products.
How Do Mortgage Rates Work?
A mortgage rate is the annual rate of interest your lender will charge for your home loan. If your income is strong and steady, you have a solid credit score and are able to provide a down payment of 20% or more, you’ll receive a lower mortgage rate than someone who does seasonal work, has a so-so credit score and can come up with only a minimal down payment. Lenders are looking for borrowers who can make their payments over the long term. They reward those borrowers with lower mortgage rates.
How Low Will Mortgage Rates Go?
Mortgage rates have been trending lower since the financial crisis of 2007 and 2008. But how low can they go? According to historical data from mortgage giant Freddie Mac, the average rate on the popular 30-year mortgage has not gone above 6% since November of 2008. COVID-19 brought mortgage rates to historic lows for most of 2020 and in early 2021, with 30-year rates hitting a record-low average of 2.65% during the first week of January 2021. Because mortgage lending is so competitive, lenders feel pressure to keep their rates as low as possible.
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- 30 Year Fixed
- 15 Year Fixed
- 5 Year ARM
Dr. Eddie Sanchez (D.B.A), Finance Instructor, University of South Florida Sarasota-Manatee
This is a great time to enter the homebuying market, with mortgage rates at historic lows. Although home prices have risen nationally due to robust demand, low rates will keep buyers in the market and keep prices elevated.
Inflation, which is the gradual increase in prices, is the primary factor affecting homebuying and mortgages. Since inflation erodes the purchasing power of the dollar, mortgage lenders would have to increase mortgage rates over time to offset that decline. The reopening of the economy will influence mortgage rates as economic growth pushes wages and consumer spending higher. Ultimately, buyers will seek loans to purchase homes, and demand for mortgages will rise.
Fixed- vs. Adjustable-Rate Mortgages
This is a great time to enter the homebuying market, with mortgage rates at historic lows. Although home prices have risen nationally due to robust demand, low rates will keep buyers in the market (and keep prices elevated).
What Is a Fixed-Rate Mortgage?
A fixed-rate mortgage allows you to pay the same interest rate for the life of your loan. Whether mortgage rates sink or soar, you will pay the same rate — and make the same monthly payment — month after month, year after year. Fixed-rate mortgages can provide a lot of clarity for homeowners. Utility bills and taxes can fluctuate and wreak all kinds of havoc on a household budget, but if you choose a common 30-year or 15-year fixed-rate mortgage, you can know what your mortgage payment will be, for years or decades to come.
What Is an Adjustable-Rate Mortgage?
In its first stages, an adjustable-rate mortgage resembles a fixed-rate loan fairly closely. For a certain number of years, the borrower pays a steady interest rate. But once that introductory period expires, the mortgage rate moves up or down in sync with a benchmark interest rate, like the prime rate. If your rate comes down during the “adjustable” period, your monthly mortgage payment will decrease, too. Congrats! But the rate also has the potential to increase, and you’ll be on the hook for higher payments if that happens.
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How to Lower Your Mortgage Rate
When you’re on the hunt for the best mortgage rate, one of the most rewarding aspects is realizing that you can, to some extent, control your own destiny. You have multiple ways of lowering your mortgage rate. Some are easier and more immediate than others, but they can all be powerful tools in your search for a more affordable home loan.
Improve Your Credit Score
If your credit score falls short, get free copies of your credit reports and check for errors. Keep your credit balances low, repay your debts, and get a secured credit card that will prevent you from overspending and demonstrate that you can pay off a fixed amount of debt every month.
Prove You Have Steady, Stable Income
Lenders tend to look kindly on mortgage applicants who have stayed at the same job for an extended time. It shows stable income and your willingness to commit. Bouncing regularly from job to job may give lenders a reason to wonder about the reliability of your income.
Shop for the Best Rate
The U.S. has literally thousands of lenders hoping to put you into a new mortgage. To find the right loan at the lowest rate, shop around. Comparing rates from multiple lenders takes only a few minutes, and it can save you thousands of dollars over the lifetime of your mortgage.
Put More Money Down
For those who can afford it, a larger down payment can go a long way toward ensuring both a lower mortgage rate and a less expensive mortgage overall. Putting down a healthy amount — 20% can be a game changer — means the bank is loaning lending less money, making you less of a risk.
When you refinance a mortgage, you take out a new loan to pay off your existing one. This is usually done after mortgage rates have dropped. Depending on how much of a gap there is between your original mortgage rate and the shiny new one, refinancing can save you a ton.
Don’t let one of today’s low mortgage
rates slip through your fingers.
Getting a Mortgage Can Be Pricey, Depending on Where You Live
A MoneyWise study finds in some states, closing costs can be shockingly high.
Buying a home is typically the largest purchase a person will ever make. And, the cost of buying doesn't stop at the purchase price. Closing on a home — particularly when you're taking out a mortgage — can be expensive. What you'll pay for an appraisal, lender fees, taxes and other closing costs vary wildly by state, a MoneyWise analysis shows. Whether you're buying in your hometown or moving cross country — maybe because you can now work from home, anywhere — you'll want to start by knowing roughly how much closing costs will set you back in the state where you’re buying.
What we learned
- In the most expensive states for taking out a mortgage, average closing costs can total more than 25% of the typical borrower’s household income. In the cheapest states, it’s less than 3%.
- Closing costs can vary depending on taxes and fees charged by your state or county. In states with higher home prices, you’ll generally pay more to close. But not always.
- The least affordable place to take out a mortgage is Washington D.C., where closing costs average $29,329, according to ClosingCorp. That's 32% of the median household income in D.C. Missouri is most affordable, with closing costs that average $1,571 — less than 3% of median household income.
- Closing costs generally range between 1% and 5% of the price of a home.
- Costs include recording fees, transfer taxes, title policies, settlement services, land surveys and appraisals.
- Borrowers can — and should — negotiate with their mortgage company to lower some of the costs, including lender fees and appraisals.
- Closing costs can be rolled into the buyer’s loan.
MoneyWise divided the average mortgage closing cost in each of the 50 states and the District of Columbia, as reported by the data and technology firm ClosingCorp, by the median household income in each place, according to census statistics. A higher result meant less affordable closing costs.
Frequently Asked Questions (FAQ)
How do I get the lowest mortgage rates?+
If you can convince lenders of your reliability as a borrower, you can usually score a lower mortgage rate. That means building up your credit score: The higher your score, the less risk you represent. Most borrowers are encouraged to aim for a credit score of 740 or higher. A larger down payment also can lower your mortgage rate and the overall cost of your loan.
How are mortgage interest rates set?+
Mortgage rates tend to rise when the country’s overall economic outlook is positive. In those times, more people want to buy homes and borrow money, so lenders can charge higher rates. When economic growth slows and unemployment rises, consumers need more encouragement to take out home loans, so mortgage rates tend to fall. The Federal Reserve, America's central bank, helps set short-term interest rates. Mortgage rates are influenced by the same economic conditions and will often move the same way as the Fed’s benchmark rate, even though there’s no direct connection.
When is the right time to qualify for a home mortgage rate?+
If you have damaged credit, are carrying a heavy debt load and are having trouble saving money, a mortgage should not be on your radar. It’s better to be in great financial shape before you take on such a huge financial responsibility. But if you’ve cobbled together money for a healthy down payment, your credit report is spotless and you’re covering all of your debts each month — including auto and personal loans — you may be ready to start thinking seriously about taking out a mortgage.
How do I find personalized home mortgage rates today?+
Finding the best mortgage rate for your area and for a person with your credit score has never been easier — in fact, you can get personalized mortgage rates on the table above. You’ll just need to answer a short questionnaire, and we’ll help you find and compare the lowest rates from a variety of trusted lenders.
What is an interest-only mortgage?+
An interest-only mortgage allows borrowers to pay only the cost of their loan for a set period of time, often five to 10 years. When that term is up and it’s time to start paying the loan principal, too, the monthly payments can balloon.
What is a mortgage interest rate lock?+
Mortgage rates can change constantly. Not weekly, not daily, but from hour to hour. Locking, or committing to, a rate with your mortgage lender guarantees that you’ll pay that rate for as long as the lock remains in place — regardless of what happens to rates in the marketplace during that time. Locking ensures your mortgage rate won't increase, even if interest rates skyrocket.
Anything else I can do to lower my mortgage rate?+
You bet there is. By paying fees called discount points, you can effectively “buy down the rate” of your loan. A point will cost you 1% of your loan’s overall value, which puts this strategy out of reach for many buyers. But each point you purchase decreases your interest rate by one-quarter of 1 percentage point (0.25) for the life of your loan. You can buy multiple points or even fractional points, depending on what you can afford. You’ll need to pay for them at closing, along with your other closing costs.
Mortgage Rate News
Read the latest on mortgage rates, the trends that shape them and the strategies that can save you money on your next home loan.