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The current average mortgage rate on a 30-year fixed mortgage is 7.43% with an APR of 7.45%, according to Curinos. The 15-year fixed mortgage has an average rate of 6.66% with an APR of 6.70%. On a 30-year jumbo mortgage, the average rate is 7.43% with an APR of 7.46%.
Current Mortgage Rates for May 20, 2024
| Loan Term | Rate | Change | Rate Last Week |
|---|---|---|---|
30-Year Mortgage Rate | 7.43% | -0.06 | 7.49% |
15-Year Fixed Rate | 6.66% | -0.13 | 6.79% |
30-Year Jumbo Mortgage Rate | 7.43% | -0.06 | 7.49% |
Source: Curinos
30-Year Mortgage Rates
Today’s average rate on a 30-year mortgage (fixed-rate) increased to 7.43% from 7.35% yesterday. This time last week, the 30-year fixed was 7.49%.
The 30-year fixed mortgage APR is 7.45%. At this time last week, it was 7.37%. Here’s why APR is important.
At an interest rate of 7.43%, a 30-year fixed mortgage would cost $694 per month in principal and interest (taxes and fees not included) per $100,000, according to the Forbes Advisor mortgage calculator. The total interest paid over the life of the loan will be approximately $149,945.
15-Year Mortgage Rates
Today’s 15-year mortgage (fixed-rate) is 6.66%, down 0.13 percentage point from the previous week. The same time last week, the 15-year, fixed-rate mortgage was at 6.79%.
The APR on a 15-year fixed is 6.70%. It was 6.57% a week earlier.
A 15-year, fixed-rate mortgage with today’s interest rate of 6.66% will cost $880 per month in principal and interest on a $100,000 mortgage (not including taxes and insurance). In this scenario, borrowers would pay approximately $58,427 in total interest.
Jumbo Mortgage Rates
The current average interest rate on a 30-year fixed-rate jumbo mortgage is 7.43%. Last week, the average rate was 7.49%.
If you lock in today’s rate of 7.43% on a 30-year, fixed-rate jumbo mortgage, you will pay $695 per month in principal and interest per $100,000 in financing. That means that on a $750,000 loan, the monthly principal and interest payment would be around $5,209, and you’d pay around $1.13 million in total interest over the life of the loan.
How Much House Can I Afford?
Buying a house is a huge purchase and can put a big dent in your savings. Before you start looking, it’s important to calculate how much house you can afford and you’re willing to spend.
Not only do you want to consider your income and debt, but you also want to factor in emergency savings and any long-term financial goals such as retirement or college.
These are some basic financial factors that go into home affordability:
- Income
- Debt
- Debt-to-income ratio (DTI)
- Down payment
- Credit score
What’s an APR, and Why Is It Important?
APR, or annual percentage rate, is a calculation that includes both a loan’s interest rate and a loan’s finance charges, expressed as an annual cost over the life of the loan. In other words, it’s the total cost of credit. APR accounts for interest, fees and time.
Since APRs include both the interest rate and certain fees associated with a home loan, the APR can help you understand the total cost of a mortgage if you keep it for the entire term. The APR will usually be higher than the interest rate, but there are exceptions.
How Are Mortgage Rates Determined?
Home loan borrowers can qualify for better mortgage rates by having good or excellent credit, maintaining a low debt-to-income (DTI) ratio and pursuing loan programs that don’t charge mortgage insurance premiums or similar ongoing charges that increase the loan’s annual percentage rate (APR).
Comparing rates from different mortgage lenders is an excellent starting point. You may also compare conventional, first-time homebuyer and government-backed programs like FHA and VA loans, which have different rates and fees.
For the most part, several economic factors influence the trajectory of rates for new home loans. The recent Federal Reserve rate hikes don’t directly cause mortgage rates to rise but have indirectly caused the interest rates for many long-term loans to increase. Rates are more likely to decrease when the Fed pauses or decreases its benchmark Federal Funds Rate.
Further, the inflation rate and the general state of the economy directly impact interest rates. High inflation and a strong economy typically signal higher rates. Cooling consumer demand or inflation may help rates decrease.
What Is the Best Type of Mortgage Loan?
Many home buyers are eligible for several mortgage loan types. Each program can have its own advantages:
- Conventional mortgage. A conventional home loan is ideal for borrowers with good or excellent credit to qualify for competitive rates. Additionally, making a minimum 20% down payment helps you waive private mortgage insurance premiums.
- FHA loan. An FHA home loan is best when applying with imperfect credit or a low down payment. You can put as little as 3.5% down with a credit score above 580. A minimum 10% down payment is necessary for credit scores ranging from 500 to 579.
- VA loan. Borrowers with a qualifying military background may prefer a VA loan for its flexibility. A down payment may not be required. While you pay a one-time funding fee, there are no ongoing mortgage insurance premiums or service fees.
- USDA loan. Applicants in eligible rural areas can buy or build a home with no down payment, although an upfront and annual guarantee fee applies. Additionally, income requirements apply and this program requires a moderate income or lower.
- Jumbo loan. Homebuyers in a high-cost-of-living area will need to apply for a jumbo loan when the loan amount exceeds the Federal Housing Finance Agency’s conforming loan limits. The limit in most municipalities is $726,200 in 2023.
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 to 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.
Further, 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.
