|Type of loan||To buy||Refinance|
|30 years fixed||3.12%||3.22%|
|FHA 30 years fixed||2.93%||3.07%|
|30-year VA fixed||2.95%||3.19%|
|Jumbo 30 years fixed||3.18%||3.36%|
|20 years fixed||2.89%||3.04%|
|15 years fixed||2.37%||2.48%|
|Jumbo 15 years fixed||2.89%||3.07%|
|10 years fixed||2.30%||2.45%|
|ARM Jumbo 7/1||2.19%||2.43%|
|ARM Jumbo 7/6||2.40%||2.60%|
|ARM Jumbo 5/1||2.04%||2.27%|
|ARM Jumbo 5/6||2.56%||2.66%|
How to use our mortgage rate table
Our mortgage rate table is designed to help you compare the rates offered by lenders to see if they are better or worse. These rates are benchmarks for those with good credit, not teaser rates that make everyone think they’ll get the lowest rate available. Of course, your personal credit profile will be a big factor in what rate you actually get from a lender, but you can buy with confidence for a new purchase or refinance.
How To Shop For Mortgage Rates
Written by: Sarah Li Cain
There are a few things to keep in mind when shopping for mortgage rates:
- Be sure to consult with national and local lenders to find the best possible rates.
- Avoid applying for mortgages in multiple places as this can hurt your credit score. Instead, get your credit report and get an accurate picture of your credit history that you can share with potential lenders. Ask them to provide you with the rates based on this information. This way, you preserve your credit score while getting the most accurate information for your credit profile.
- Use our rate table to help you determine if lenders are offering you a competitive rate based on your credit profile.
What is a good mortgage rate?
A good mortgage rate will depend on the borrower. Lenders will advertise the lowest rate offered, but yours will depend on factors like your credit history, income, other debts, and down payment. For example, a good mortgage rate for someone with a low credit rating tends to be higher than for someone with a higher credit rating.
It is important to understand what will affect your individual rate and to work on optimizing your finances so that you can receive the most competitive rate based on your financial situation.
How Do I Qualify For Better Mortgage Rates?
Qualifying for better mortgage rates can save you tens of thousands of dollars over the life of the loan. Here are some ways to make sure you find the most competitive rate possible:
- Increase your credit score: A borrower’s credit rating is an important factor in determining mortgage rates. The higher the credit score, the more likely a borrower is to get a lower rate. It’s a good idea to look at your credit score to see how you can improve it, whether that’s by making payments on time or disputing errors on your credit report.
- Increase your deposit: Most lenders offer lower mortgage rates for those making a larger down payment. It will depend on the type of mortgage you are applying for, but sometimes a reduction of at least 20% could get you more attractive rates.
- Reduce your debt ratio: Also called DTI, your debt-to-income ratio looks at your total monthly debt and divides it by your gross income. Usually, lenders don’t want a DTI of 43% or more, as this may indicate that you may be having difficulty meeting your monthly obligations as a borrower. The lower your DTI, the less risky you will appear to the lender, which will translate into a lower interest rate.
What mortgage can I afford?
Typically, homeowners can afford a mortgage that is two to two and a half times their annual gross income. For example, if you earn $ 80,000 a year, you can afford a mortgage of $ 160,000 to $ 200,000. Keep in mind that this is a general guideline and you need to look at additional factors to determine how much you can afford, such as your lifestyle.
First, your lender will determine what they think you can afford based on your income, debts, assets, and liabilities. However, you need to determine how much you are willing to spend, your current spending. Most experts recommend spending no more than 28% of your gross income on housing costs. Lenders will also look at your DTI, which means the higher your DTI, the less likely you are to be able to afford a larger mortgage.
Remember to include other costs in addition to your mortgage, which include all applicable HOA fees, home insurance, property taxes, and home maintenance fees. Using a mortgage calculator can be helpful in this situation to help you determine how comfortably you can afford a mortgage payment.
Frequently Asked Questions
Written by: Sarah Li Cain
What is a mortgage rate?
A mortgage rate is the amount of interest determined by a lender to charge on a mortgage. These rates can be fixed, that is to say fixed according to a reference rate, for the duration of the mortgage term of the borrower or variable according to the mortgage conditions and the rates in force. The rate is one of the key factors for borrowers when looking for mortgage finance options as it will affect their monthly payments and the amount they will pay over the life of the loan.
How are mortgage rates set?
Mortgage rates are set based on a few factors, economic forces being one of them. For example, lenders look at the prime rate – the lowest rate offered by banks for loans – which typically follows trends set by the Federal Reserve’s fed funds rate. This is usually a few percentage points.
The yield on 10-year Treasury bonds can also reveal market trends. If bond yields rise, mortgage rates tend to rise, and vice versa. The 10-year Treasury yield is generally the best standard for judging mortgage rates. This is because many mortgages are refinanced or paid off after 10 years, even though the standard is a 30-year loan.
The factors that the borrower can control are their credit rating and the amount of their down payment. Since lenders determine rates based on the risk they can take, borrowers who are less creditworthy or have a lower down payment may be offered higher rates. In other words, the lower the risk, the lower the rate for the borrower.
Does the Federal Reserve set mortgage rates?
Although the Federal Reserve does not set mortgage rates, it influences the rate indirectly. The Federal Reserve helps guide the economy by controlling inflation and encouraging growth. This means that decisions made by the Federal Open Market Committee to raise or lower short-term interest rates can influence lenders to raise or lower theirs.
Do different types of mortgages have different rates?
Mortgage rates can be different depending on the type. For example, fixed rate mortgages tend to be higher than variable rate ones. However, variable rate mortgages tend to have lower rates for a predetermined period of time and then fluctuate as they adjust to current market conditions.
Are interest rates and APR the same?
Interest rates and APR are not the same. An annual percentage rate (APR) reflects the additional charges associated with your mortgage, which include interest. The interest rate reflects the cost that homeowners pay to borrow money. These charges include charges like setup fees and discount points, which is why the APR is usually higher than the interest rate.
What are mortgage points?
Also known as discount points, these are one-time fees or prepaid interest that borrowers buy to reduce the interest rate on their mortgage. Each point of discount costs one percent of your mortgage amount, or $ 1,000 for every $ 100,000, and will reduce the rate by a quarter of a percent, or 0.25. For example, if the interest rate is 4%, purchasing a mortgage point will reduce the rate to 3.75%.
How much will I need for a down payment?
The minimum amount you will need to pay will depend on the type of mortgage. Many lenders require a minimum of 5-20%, while others, such as those backed by the government, require at least 3.5%. The VA loan is the exception with no down payment requirement.
As a general rule, the larger your down payment, the lower your rate can be. Homeowners who have deposited at least 20 percent will be able to save the most.
In order to assess mortgage rates, we first had to create a credit profile. This profile included a credit score ranging from 700 to 760 with a property loan-to-value (LTV) ratio of 80%. With this profile, we have calculated the average of the lowest rates offered by more than 200 of the major lenders in the country. As such, these rates are representative of what real consumers will see when shopping for a mortgage.
The same credit profile was used for the state’s best rate card. We then found the lowest rate currently offered by a surveyed lender in that state.
Keep in mind that mortgage rates can change daily and this data is provided for informational purposes only. A person’s credit and personal income profile will be the determining factors in the rates and loan terms they can obtain. Loan rates do not include tax or insurance premium amounts and individual lender terms will apply.