Many homebuyers expected mortgage rates would fall in 2024, but there have already been a few bumps in the road.
While average mortgage rates change daily in response to a range of economic conditions and market expectations, your personal rate will depend on more specific factors, like your credit score, income, loan type and lender.
If you’re looking to buy a home, make sure to compare loan offers from multiple lenders to find the best rate for you.
Read more: Mortgage Predictions: The Fed Isn’t in a Rush to Help Mortgage Rates Fall
Current mortgage and refinance rates
What are today’s mortgage rates?
| Product | Interest rate | APR |
|---|---|---|
| 30-year fixed-rate | 6.97% | 7.02% |
| 15-year fixed-rate | 6.37% | 6.45% |
| 30-year fixed-rate jumbo | 7.11% | 7.17% |
| 30-year fixed-rate FHA | 6.71% | 6.75% |
| 5/1 ARM | 6.66% | 7.93% |
| 5/1 ARM jumbo | 6.35% | 7.68% |
| 7/1 ARM | 6.67% | 7.93% |
| 10/1 ARM | 7.02% | 7.80% |
| 15-year fixed-rate jumbo | 6.50% | 6.58% |
| 20-year fixed-rate | 6.66% | 6.71% |
| 30-year fixed-rate VA | 6.85% | 6.89% |
| 7/1 ARM jumbo | 6.68% | 7.75% |
| 15-year fixed-rate refinance | 6.44% | 6.52% |
| 30-year fixed-rate refinance | 6.98% | 7.02% |
| 5/1 ARM refinance | 6.53% | 7.77% |
| 7/1 ARM refinance | 6.59% | 7.77% |
| 10/1 ARM refinance | 7.06% | 7.78% |
| 30-year fixed-rate jumbo refinance | 7.04% | 7.09% |
| 15-year fixed-rate jumbo refinance | 6.62% | 6.70% |
| 5/1 ARM jumbo refinance | 6.21% | 7.66% |
| 30-year fixed-rate FHA refinance | 6.81% | 6.86% |
| 20-year fixed-rate refinance | 6.64% | 6.69% |
| 30-year fixed-rate VA refinance | 6.93% | 6.98% |
| 7/1 ARM jumbo refinance | 6.59% | 7.69% |
Updated on April 05, 2024.
We use information collected by Bankrate, which is owned by the same parent company as CNET, to track daily mortgage rate trends. The above table summarizes the average rates offered by lenders across the country.
Today’s mortgage interest rate trends
Mortgage rates fell significantly in December as the Federal Reserve wrapped up its last policy meeting of the year and signaled that it was prepared to start making cuts to its key short-term interest rate, the federal funds rate, sometime in 2024. The Fed doesn’t set mortgage rates directly, but its policy decisions can influence whether rates go up or down.
Mortgage rate movement is also contingent on economic data -- particularly how much inflation decelerates -- and when the Fed decides to start implementing interest rate cuts. Any increase in inflation or another indicator of economic growth could send mortgage rates up again (and push out the Fed’s plans to cut rates). In February, hotter-than-expected inflation and labor reports pushed mortgage rates back above 7%.
Since then, mortgage rates have eased slightly but aren’t consistently trending down just yet.
During its March 19-20 meeting, the Fed decided to hold interest rates steady for a fifth consecutive time. Most experts predict the Fed will pivot toward rate cuts in the second half of the year, with June being the earliest option.
“If all goes well, by the time 2025 comes around, we could see mortgage rates closer to 6%, or maybe even lower,” said Jacob Channel, senior economist at LendingTree. But because mortgage rates can be volatile and respond to so many economic factors, Channel warns against too much optimism.
What is a mortgage rate?
Your mortgage rate is the percentage of interest a lender charges for providing the loan you need to buy a home. Multiple factors determine the rate you’re offered. Some are specific to you and your financial situation, and others are influenced by macro market conditions, such as inflation, the Fed’s monetary policy and the overall demand for loans.
What factors determine my mortgage rate?
While the broader economy plays a key role in mortgage rates, some key factors under your control affect your rate:
- Your credit score: Lenders offer the lowest available rates to borrowers with excellent credit scores of 740 and above. Because lower credit scores are deemed riskier, lenders charge higher interest rates to compensate.
- The size of your loan: The size of your loan can impact the interest rate you qualify for.
- The loan term: The most common mortgage is a 30-year fixed-rate loan, which spreads your payments over three decades. Shorter loans, such as 15-year mortgages, typically have lower rates but larger monthly payments.
- The loan type: The type of mortgage you choose impacts your interest rate. Some loans have a fixed rate for the entire life of the loan. Others have an adjustable rate that have lower rates at the start of the loan but could result in higher payments down the road.
What’s an annual percentage rate for mortgages?
The annual percentage rate, or APR, is usually higher than your loan’s interest rate and represents the true cost of your loan. It includes the interest rate and other costs such as lender fees or prepaid points. So, while you might be tempted with an offer for “interest rates as low as 6.5%,” look at the APR instead to see how much you’re really paying.
Pros and cons of getting a mortgage
Pros
You’ll build equity in the property instead of paying rent with no ownership stake.
You’ll build your credit by making on-time payments.
You’ll be able to deduct the interest on the mortgage on your annual tax bill.
Cons
You’ll take on a sizable chunk of debt.
You’ll pay more than the list price -- potentially a lot more over the course of a 30-year loan -- due to interest charges.
You’ll have to budget for closing costs to close the mortgage, which add up to tens of thousands of dollars in some states.
How does the APR affect principal and interest?
Most mortgage loans are based on an amortization schedule: You’ll pay the same amount each month for the life of the loan, but the generated interest will be highest at the beginning and will taper as the principal (the amount you borrowed) decreases. Your amortization schedule will show how much of your monthly payment goes to interest and how much pays down the principal. Most borrowers find a fixed, predictable monthly payment more convenient.
Mortgage lenders often publish their rates for different mortgage types, which can help you research and narrow down where you’ll apply for preapproval. But an advertised rate isn’t always the rate you’ll get. When shopping for a new mortgage, it’s important to compare not just mortgage rates but also closing costs and any other fees associated with the loan. Experts recommend shopping around and reaching out to multiple lenders for quotes and not rushing the process.
FAQs
Most conventional loans require a credit score of 620 or higher, but Federal Housing Administration and other loan types may accommodate borrowers with scores as low as 500, depending on the lender.
Your credit score isn’t the only factor that impacts your mortgage rate. Lenders will also look at your debt-to-income ratio to assess your level of risk based on the other debts you’re paying back such as student loans, car payments and credit cards. Additionally, your loan-to-value ratio plays a key role in your mortgage rate.
A rate lock means your interest rate won’t change between the offer and the time you close on the house. For example, if you lock in a rate at 6.5% today and your lender’s rates climb to 7.25% over the next 30 days, you’ll get the lower rate. A common rate-lock period is 45 days, so you’re still on a tight timeline. Be sure to ask lenders about rate lock windows and the cost to secure your rate.
Mortgage rates are always changing, and it’s impossible to predict the market. However, most experts think mortgage rates will gradually decline over the course of 2024. Fannie Mae predicts the average rate for a 30-year fixed mortgage will end the year at 6.4%.
