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Currently, the average interest rate on a 30-year fixed mortgage is 7.51%, compared to 7.75% a week ago.
For borrowers who want to pay off their home faster, the average rate on a 15-year fixed mortgage is 6.67%, down 0.28 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.
Current Mortgage Rates for May 8, 2024
Source: Curinos
30-Year Mortgage Rates
Borrowers paid an average rate of 7.51% on a 30-year mortgage. This was down from the previous week’s rate of 7.75%.
Currently, the average annual percentage rate (APR) on a 30-year fixed-rate mortgage is 7.53%. The APR contains both mortgage interest and the lender fees to help give a more complete picture of loan costs.
To get an idea of how much you’ll pay: a $100,000 mortgage with a 30-year fixed-rate loan at the current average interest rate of 7.51% will cost you about $700 including principal and interest (taxes and fees not included) each month, the Forbes Advisor mortgage calculator shows. That’s around $152,013 in total interest over the life of the loan.
15-Year Mortgage Rates
Today’s 15-year mortgage (fixed-rate) is 6.67%, down 0.28 percentage point from the previous week. The same time last week, the 15-year, fixed-rate mortgage was at 6.95%.
The APR on a 15-year fixed is 6.70%. It was the same last week.
A 15-year, fixed-rate mortgage with today’s interest rate of 6.67% 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 $58,486 in total interest.
Jumbo Mortgage Rates
The current average interest rate on a 30-year fixed-rate jumbo mortgage is 7.50%. Last week, the average rate was 7.70%.
If you lock in today’s rate of 7.50% on a 30-year, fixed-rate jumbo mortgage, you will pay $699 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 $5,246, and you’d pay around $1.14 million in total interest over the life of the loan.
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?
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)
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.
