MATIASGUARRO

Currently, the average interest rate on a 30-year fixed mortgage is 6.85%, compared to 7.07% a week ago, according to the Mortgage Research Center.

For borrowers who want to pay off their home faster, the average rate on a 15-year fixed mortgage is 5.92%, down 0.16 percentage point from the previous week.

If you’re thinking about refinancing to lock in a lower rate, compare your existing mortgage rate with current market rates to make sure it’s worth the cost to refinance.

!function(){“use strict”;window.addEventListener(“message”,(function(a){if(void 0!==a.data[“datawrapper-height”]){var e=document.querySelectorAll(“iframe”);for(var t in a.data[“datawrapper-height”])for(var r=0;r<e.length;r++)if(e[r].contentWindow===a.source){var i=a.data["datawrapper-height"][t]+"px";e[r].style.height=i}}}))}();

30-Year Mortgage Rates

Today’s average rate on a 30-year, fixed-rate mortgage is 6.85%, which is 0.22 percentage point lower than last week.

The interest plus lender fees, called the annual percentage rate (APR), on a 30-year fixed mortgage is 6.89%. The APR was 7.11% last week.

To get an idea about how much you might pay in interest, consider that the current 30-year, fixed-rate mortgage of 6.85% on a $100,000 loan will cost $655 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 $136,759.

15-Year Mortgage Rates

Today, the 15-year mortgage rate declined to 5.92%, lower than it was at this time yesterday. Last week, it was 6.08%.

On a 15-year fixed, the APR is 5.97%. Last week it was 6.14%.

With an interest rate of 5.92%, you would pay $839 per month in principal and interest for every $100,000 borrowed. Over the life of the loan, you would pay $51,632 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 7.34%. Last week, the average rate was 7.3%.

If you lock in the latest rate on a 30-year, fixed-rate jumbo mortgage, you will pay $689 per month in principal and interest per $100,000 borrowed, which amounts to $148,349 in total interest over the life of the loan.

How To Calculate Mortgage Payments

One of the first steps in buying a house is budgeting. To get a general idea of how much owning a home will cost, start by using a mortgage calculator to crunch the numbers.

Just input the following data to get an idea of how much a house will cost:

• 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 annual percentage rate (APR) represents a loan’s interest rate and fees, expressed as an annual cost over the life of the loan. It’s essentially the all-in cost of the loan.

The APR is a helpful number because it shows you the total cost of a mortgage if you keep it 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?

As you compare lenders, consider getting rate quotes for several loan programs. In addition to comparing rates and fees, these programs can have flexible down payment and credit requirements that make qualifying easier.

Conventional mortgages are likely to offer competitive rates when you have a credit score between 670 and 850, although it’s possible to qualify with a minimum score of 620. This home loan type also doesn’t require annual fees when you have at least 20% equity and waive PMI.

Several government-backed programs are better when you want to make little or no down payment:

• FHA loans. Borrowers with a credit score above 580 only need to put 3.5% down and applicants with credit scores ranging from 500 to 579 are only required to make a 10% down payment with FHA loans.
• VA loans. Servicemembers, veterans and qualifying spouses don’t need to make a down payment when the sales price is less than the home’s appraisal value. VA loan credit requirements vary by lender.
• USDA loans. Applicants in eligible rural areas can buy or build a home with no money down using a USDA loan. Moderate-income borrowers can qualify for a 30-year fixed-rate term through the Guaranteed Loan Program. Further, buyers with a very low or low income can receive a 33-year term and payment assistance is available through the agency’s Direct Loans program. Credit requirements differ by lender.

Frequently Asked Questions (FAQs)