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Today, the mortgage interest rate on a 30-year fixed mortgage is 7.52%, according to Curinos. On a 15-year fixed mortgage, the average rate is 6.71%, and the average rate on a 30-year jumbo mortgage is 7.51%.
Current Mortgage Rates for May 6, 2024
Source: Curinos
30-Year Mortgage Rates
Today’s average rate on a 30-year mortgage (fixed-rate) decreased to 7.52% from 7.66% yesterday. One week ago, the 30-year fixed was 7.68%.
The 30-year fixed mortgage APR is 7.54%. At this time last week, it was 7.54%. Here’s why APR is important.
According to the Forbes Advisor mortgage calculator, homebuyers with a 30-year fixed-rate mortgage of 100,000 will pay $700 per month in principal and interest (taxes and fees not included) at today’s interest rate of 7.52%. The total interest paid over the life of the loan will be about $152,136.
15-Year Mortgage Rates
Today’s 15-year mortgage (fixed-rate) is 6.71%, down 0.22 percentage point from the previous week. The same time last week, the 15-year, fixed-rate mortgage was at 6.93%.
The APR on a 15-year fixed is 6.74%. It was the same last week.
A 15-year, fixed-rate mortgage with today’s interest rate of 6.71% will cost $883 per month in principal and interest on a $100,000 mortgage (not including taxes and insurance). In this scenario, borrowers would pay approximately $58,875 in total interest.
Jumbo Mortgage Rates
The average interest rate on the 30-year fixed-rate jumbo mortgage is 7.51%. Last week, the average rate was 7.69%.
Borrowers with a 30-year fixed-rate jumbo mortgage with today’s interest rate of 7.51% will pay $700 per month in principal and interest per $100,000. That means that on a $750,000 loan, the monthly principal and interest payment would be around $5,247 and you’d pay roughly $1.14 million in total interest over the life of the loan.
How Much House Can I Afford?
Everyone’s budget and financial goals vary. How much house you can afford comes down to a number of factors, including what you earn and what you owe. You’ll also want to consider how much you want to save for retirement, school and other expenses down the road.
Here are a few basic factors that go into what you can afford:
- Income
- Debt
- Debt-to-income ratio (DTI)
- Down payment
- Credit score
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 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.
