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Borrowers looking for a 30-year fixed-rate mortgage will see rates averaging 6.378% today. The average rate is down nearly half a percentage point from yesterday when the it was nearly 7%. Average rates for almost all other loan types, however, are higher.
Money’s daily mortgage rates reflect what a borrower with a 20% down payment and a 700 credit score — roughly the national average score — might pay if he or she applied for a home loan right now. Each day’s rates are based on the average rate 8,000 lenders offered to applicants the previous business day. Freddie Mac’s weekly rates will generally be lower since they measure rates offered to borrowers with higher credit scores.
Looking for a loan? Check out Money’s lists of the best mortgage lenders and best refinance lenders.
The 30-year fixed-rate mortgage is the most popular home loan in America. The long payback time means the monthly payments will be lower than on shorter loans, while the fixed rate means those payments will be predictable. The downside is that the interest rate on a 30-year loan will be higher compared to other loan types, so your total borrowing costs will be higher as well.
The shorter term and lower rate of the 15-year fixed-rate mortgage make it an attractive option for some borrowers. Paying a lower rate for less time means your total borrowing costs will be lower. The drawback is that you have to pay the loan back faster, so your monthly payments will be a lot higher than with a 30-year loan of the same size.
Use a mortgage calculator to determine which option is best for you.
An adjustable-rate mortgage will start with a fixed, teaser rate. Once the fixed period ends, the rate will become variable and adjust to market conditions at regular intervals. For instance, the rate on a 5/1 ARM will be fixed for five years, then adjusts annually.
While an ARM’s variable rate could decrease during the loan’s term, there is also the risk it could increase significantly. You should take those potential higher rates into account when considering this type of loan.
The average rates for FHA, VA and jumbo loans are:
The average refinance rates for 30-year loans, 15-year loans and ARMs are:
Mortgage rates sank through 2020. Millions of homeowners responded to low mortgage rates by refinancing existing loans and taking out new ones. Many people bought homes they may not have been able to afford if rates were higher. In January 2021, rates briefly dropped to the lowest levels on record, but trended slightly higher through the rest of the year.
Looking ahead, experts believe interest rates will rise more in 2022, but also modestly. Factors that could influence rates include continued economic improvement and more gains in the labor market. The Federal Reserve has also begun tapering its purchase of mortgage-backed securities and raised the federal funds rate for the first time in March to combat rising inflation. The Fed has signaled six more hikes are likely this year.
While mortgage rates are likely to rise, experts say the increase won’t happen overnight and it won’t be a dramatic jump. Rates should stay near historically low levels through the first half of the year, rising slightly later in the year. Even with rising rates, it will still be a favorable time to finance a new home or refinance a mortgage.
Factors that influence mortgage rates include:
There is no universal mortgage rate that all borrowers receive. Qualifying for the lowest mortgage rates takes a little bit of work and will depend on both personal financial factors and market conditions.
Check your credit score and credit report. Errors or other red flags may be dragging your credit score down. Borrowers with the highest credit scores are the ones who will get the best rates, so checking your credit report before you start the house-hunting process is key. Taking steps to fix errors will help you raise your score. If you have high credit card balances, paying them down can also provide a quick boost.
Save up money for a sizeable down payment. This will lower your loan-to-value ratio, which means how much of the home’s price the lender has to finance. A lower LTV usually translates to a lower mortgage rate. Lenders also like to see money that has been saved in an account for at least 60 days. It tells the lender you have the money to finance the home purchase.
Shop around for the best rate. Don’t settle for the first interest rate that a lender offers you. Check with at least three different lenders to see who offers the lowest interest. Also consider different types of lenders, such as credit unions and online lenders in addition to traditional banks.
Also, take time to find out about different loan types. While the 30-year fixed-rate mortgage is the most common type of mortgage, consider a shorter-term loan like a 15-year loan or an adjustable-rate mortgage. These types of loans often come with a lower rate than a conventional 30-year mortgage. Compare the costs of all to see which one best fits your needs and financial situation. Government loans — such as those backed by the Federal Housing Authority, the Department of Veterans Affairs and the Department of Agriculture — can be more affordable options for those who qualify.
Finally, lock in your rate. Locking your rate once you’ve found the right rate, loan product and lender will help guarantee your mortgage rate won’t increase before you close on the loan.
Money’s daily mortgage rates show the average rate offered by over 8,000 lenders across the United States the most recent business day rates are available. Today, we are showing rates for Monday, April 18, 2022. Our rates reflect what a typical borrower with a 700 credit score might expect to pay for a home loan right now. These rates were offered to people putting 20% down and include discount points.
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