Compare mortgage interest rates today – February 6, 2024

Mortgage interest rates today rose for the second day in a row. Here are the latest popular home loan rates:

  • 30 years fixed: 7.39%
  • 15 years fixed: 6.62%
  • 30-year fixed jumbo: 7.29%

Mortgage interest rates today

In general, interest rates on home loans are higher than last week. The biggest driver is the 15-year flat, which rose 17 basis points weekly. (One basis point equals 0.01.)

30-year mortgage interest rates

The average 30-year fixed mortgage rate was 7.39% on Tuesday, according to Corinus data. This represents a weekly increase of 14 basis points.

Although it is the most common repayment term for homeowners, 30 years is not always the best option. You might consider a 20- or 15-year term if lower rates — and typically higher monthly payments — fit your short-term budget and long-term plans.

20-year mortgage interest rates

The average rate on a 20-year fixed mortgage was 7.18% on Tuesday, according to Corinus data. This represents a weekly increase of 14 basis points.

Although less popular than the 30- and 15-year terms, many reputable lenders offer the ability to choose a 20-year term. Just be aware that prioritizing a 20-year term (and its higher monthly payments) over a 30-year term (lower monthly dues) may limit the loan amount you're eligible for.

15-year mortgage interest rates

The average daily rate for a 15-year fixed mortgage is 6.62%, according to Corinus data. Last month, 15-year home loan rates averaged 6.46%.

If you were to borrow at the current 15-year mortgage rate, you would pay $3,291 per month on a $375,000 home loan.

30-year fixed mortgage interest rates

The average daily rate for a 30-year fixed jumbo loan is 7.29%. Last month, 30-year jumbo loan rates averaged 7.20%.

Qualifying for a jumbo loan is more difficult than a traditional fixed-rate mortgage. Since you're seeking a larger loan amount, you'll need to come up with a larger down payment, a better credit score, and a stronger financial history. For example, some jumbo loan lenders require a down payment of 20% or more.

10/6 Armenian interest rates

The average daily rate for a 6/10 ARM is 7.09%, according to Curinos data. Last week 10/6 ARM rates averaged 7.07%.

Because of the initially low “suspensary” interest rate, a 10/6 ARM could be appropriate if you plan to move before year 11 of your mortgage — or if you expect mortgage rates to decline in the coming years.

Interest rates 7/6 ARM

The average daily rate for a 7/6 ARM is 7.06%, according to Curinos data. This represents a weekly increase of 0 basis points.

Besides the 7/6 ARM option, there is also a 7/1 ARM that will see your rate adjust each year once you reach the eighth year of repayment.

Understanding mortgage interest rates

The mortgage interest rate is the basic cost of borrowing the principal loan amount. The lower the interest rate, the less you pay the lender over the repayment period.

While interest rates are a clear indicator of the broader market, it is crucial to consider annual percentage rates (or APR) when comparing home loan options. APR calculations are the lender's interest rate plus associated fees. (When you borrow a home loan, the majority of your payments in the early years are directed toward interest based on how the lender amortizes the loan.)

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Higher rates, which is the way rates are headed in 2023, tend to cool the housing market. Prospective home buyers may be waiting for lower prices, and potential home sellers may be less inclined to list their properties amid lower demand.

Types of mortgage interest rates

A fixed mortgage rate stays the same throughout the repayment term. If you borrow a home loan with an 8.00% APR for 30 years, your APR in the first year of repayment will be the same as in year 30 (unless you refinance to a different rate along the way). (Although your annual rate of return and principal and interest payment do not change, the amount of interest you pay each month does, based on how the lender amortizes the loan.)

Adjustable-rate mortgages (ARMs), on the other hand, combine variable and fixed rates: Your payment will start at a lower-than-fixed annual interest rate for a specified period, then rise or fall depending on the market. For example, a 7/1 ARM means your rate is fixed for the first seven years but will adjust annually until your debt is paid off. If you plan to move out of your home before the fixed rate expires, or if you expect rates to decline over time, ARMs may be a good idea.

Fixed mortgage rates provide consistency with your budget since your monthly dues won't change. However, ARMs offer equal risk and reward: Your monthly payment may rise or fall over time.

Factors that affect mortgage interest rates

Mortgage rates fluctuate according to economic factors beyond consumers' daily control. Rates typically follow the path of the benchmark 10-year Treasury note and may be affected by Federal Reserve actions, among other factors. In October 2023, as the Fed continued to fight inflation, the 10-year bond yield reached 5.00%, the culmination of rising rates since 2022. In the same month, the average 30-year fixed mortgage rate rose about 8.00%.

As an applicant, the strength of your credit and financial history directly affects the mortgage rates you will be offered. Lenders look at your mortgage application from the perspective of how likely you are to repay your debts.

Tips for getting the best mortgage interest rate

Shop around, to start. By making thorough comparisons of APR offers from at least a few lenders, you can ensure you're getting the best possible loan for your situation. Better yet, prioritize lenders that allow you to “lock in” the rate when you apply and “float” to a lower rate if the market changes before your loan is finalized.

Before you apply for a home loan pre-approval, you can take steps to strengthen your application — and thus get a lower interest rate. These steps include the following:

  1. Check your credit reports via Annual credit report And dispute any errors with the appropriate credit bureau (Equifax, Experian, TransUnion). While some errors won't affect your credit score (for example, if your name is misspelled), some may affect your score (for example, a late payment that's more than seven years old and still on your report).
  2. Monitor your credit score By using a free service through your financial institution or by using a paid service.
  3. Save a 20% down payment, if possible. Or, if you don't reach the 20% limit, consider using some of your savings to buy discount points from your lender. Points are a way to “pay back” your rate at the time of borrowing.
  4. Review homebuying assistance programs Especially if you're a first-time homebuyer, they can offer different mortgage types and loan term lengths to push your potential interest rate down.
  5. Pay off your other consumer debts, Such as credit card balances and student loans. This will improve your debt-to-income ratio and make you a stronger candidate for the best mortgage rates.
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How to compare mortgage interest rates

After determining your preferred type of home loan and accepting a home offer, compare APRs with at least three lenders (ideally more). You can collect mortgage rates (and loan estimates) through your bank, credit union, or through online services.

If you'd rather eliminate the shopping process, you can work with a mortgage broker who goes to the market for you. Brokers can also connect you with offers from mortgage wholesalers who may not work directly with consumers.

Mortgage interest rate forecasts

Given persistent inflation, among other macroeconomic factors, many experts expect mortgage interest rates to remain at similar levels for the rest of 2023, and perhaps even into 2024. The Fed's efforts to combat inflation — specifically, advertising… For any additional increases in interest rates – has achieved great success. The greatest short-term impact is on the mortgage rate environment.

Expert forecasts are clearer on this front: Gone are the pandemic-era days of 3.00% mortgage interest rates. The average 30-year fixed mortgage rate was approximately 8.00% in October 2023.

Frequently Asked Questions (FAQ)

The main difference is that fixed rates are fixed for the life of the mortgage and adjustable rate mortgages (ARMs) are not. If you want to know exactly how much you'll be paying each month, a fixed rate is likely the better option. However, if you have an appetite for savings — and the ability to take risks — you can opt for an ARM. Rates on ARMs typically start below fixed APRs for a number of years before rising or falling with market conditions.

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You should choose the loan term that provides the most appropriate monthly payment for your budget. A shorter term (for example, 15 years) usually means you'll pay less interest over the life of the loan, but your monthly bill will be higher. A longer term (such as 30 years) significantly increases the cost of borrowing, thanks to interest accrual, but also reduces your monthly dues. It's helpful to use our free online mortgage calculator to estimate the monthly — and total — cost of paying off your mortgage with different terms.

Yes, you can negotiate your mortgage rate, plus lender fees, to lower the APR offered. If you have excellent credit and a strong debt-to-income ratio, you can leverage the strength of your application to request a discount on the rate. Or, if you've received multiple quotes, you can ask your preferred lender to meet or beat the APR offered by a competitor. It never hurts to ask. If all else fails, you may consider purchasing discount points (using cash) to reduce the price.

Yes, mortgage rates are always changing, sometimes hourly. Although prices usually do not change significantly on the same day or during the same week, every change is noticeable. This is because even a small change in basis points — one basis point equals 0.01% — results in greater savings and costs for aspiring homebuyers who are about to make what is typically their largest investment.

Yes, between the time you accept your loan offer and close on your mortgage, you can Lock in your mortgage rate. The caveat is that the lockout occurs before the price lock expires, usually after 30, 45 or 60 days. Before accepting any lender's loan offer, ask about their rate locking program, as well as whether they offer the option to “float down” to a lower APR if the market sees a decline in interest rates before your loan is finalized.

Average mortgage interest rates — such as the average for 30-year fixed-rate home loans — are a measure of the broader market. They're talking about a typical interest rate given to borrowers with a certain credit profile. But not everyone gets the same mortgage rate. Creditworthy borrowers in particular will be the closest to qualifying for the basement APRs that lenders promote. Non-creditworthy applicants are usually quoted rates at the high end of the promoted rate ranges.

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