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The current average mortgage rate on a 30-year fixed mortgage is 7.53%, compared to 7.66% a week earlier.
For borrowers who want a shorter mortgage, the average rate on a 15-year fixed mortgage is 6.70%, down 0.15 percentage point from the previous week.
Homeowners who want to lock in a lower rate by refinancing should compare their existing mortgage rate to today’s refinance rates.
Current Mortgage Rates for May 7, 2024
30-Year Mortgage Rates
Today’s average rate on a 30-year mortgage (fixed-rate) increased to 7.53% from 7.52% yesterday. One week ago, the 30-year fixed was 7.66%.
The APR on a 30-year fixed is 7.55%. This time last week, it was 7.54%. APR is the all-in cost of your loan.
At an interest rate of 7.53%, a 30-year fixed mortgage would cost $701 per month in principal and interest (taxes and fees not included) per $100,000, according to the Forbes Advisor mortgage calculator. In total interest, you’d pay $152,358 over the life of the loan.
15-Year Mortgage Rates
Today, the 15-year mortgage rate is 6.70%, lower than it was yesterday. Last week, it was 6.85%.
The APR on a 15-year fixed is 6.73%. It was 6.73% this time last week.
At today’s interest rate of 6.70%, a 15-year fixed-rate mortgage would cost approximately $882 per month in principal and interest per $100,000. You would pay around $58,785 in total interest over the life of the loan.
Jumbo Mortgage Rates
The average interest rate on the 30-year fixed-rate jumbo mortgage sits at 7.53%. Last week, the average rate was 7.66%.
Borrowers with a 30-year fixed-rate jumbo mortgage with today’s interest rate of 7.53% will pay $701 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 $5,260 and you’d pay around $1.14 million 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
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?
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.
