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According to Curinos, the current interest rate for a 30-year fixed mortgage is 7.28%, while the average interest rate for a 15-year mortgage is 6.53%. The average interest rate for a 30-year jumbo mortgage is 7.29%.
Mortgage interest rates as of July 12, 2024
Source: Curinos
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30-year mortgage rates
Borrowers paid an average interest rate of 7.28% on a 30-year mortgage, down from 7.39% the previous week.
Currently, the average annual percentage rate (APR) for a 30-year fixed-rate mortgage is 7.30%. The APR includes both mortgage interest and lender fees, which helps give you a complete picture of your loan costs.
If you want an idea of what your payments will be, Forbes Advisor's mortgage calculator says that a 30-year, fixed-rate $100,000 mortgage at the current average interest rate of 7.28% would cost you about $684 per month in principal and interest (but not taxes and fees), which works out to a total of about $146,414 in interest over the life of the loan.
15-year mortgage rates
The average interest rate for a 15-year fixed rate mortgage is 6.53%. At the same time last week, the 15-year fixed rate mortgage was 6.67%.
The 15-year fixed rate APR is 6.56%. It was 6.56% at the same time last week.
At a 6.53% interest rate, you'll pay $873 per month in principal and interest for every $100,000 you borrow. Over the life of the loan, you'll pay a total of $57,106 in interest.
Jumbo mortgage interest rates
The current average interest rate for a 30-year fixed rate jumbo mortgage is 7.29%, down 0.11 percentage points from last week. 30-year jumbo mortgage rates have a 52-week low APR of 5.00% and a high of 10.50%.
A 30-year jumbo mortgage with a current fixed rate of 7.29% will cost you $685 in monthly principal and interest payments per $100,000.For a $750,000 jumbo mortgage, monthly principal and interest payments would be about $5,138.
How to Calculate a Mortgage Payment
To estimate the cost of your mortgage, it's helpful to use a mortgage calculator.
Simply enter the following information:
Home price Down payment amount Interest rate Loan term Taxes, insurance, HOA fees
What is APR and why does it matter?
The APR (Annual Percentage Rate) is a calculation that includes both the interest rate of the loan and the loan finance fee, expressed as the annual cost over the life of the loan. In other words, it is the total cost of credit. The APR takes into account the interest rate, the fees, and time.
Because the APR includes both the interest rate and certain fees associated with your mortgage, the APR can help you understand the total cost of maintaining your mortgage over its entire life. Typically, the APR is higher than the interest rate, but there are exceptions.
How are mortgage interest rates determined?
Mortgage interest rates are determined by several factors, including some outside of a borrower's control.
Federal Reserve. The Fed's interest rate hikes and cuts adjust the federal funds rate, which helps determine the base interest rate at which banks lend. As a result, mortgage rates tend to move in the same direction as the Fed's interest rate decisions. Bond market. Mortgages are loosely tied to long-term bond yields as investors seek income-generating assets, specifically the 10-year U.S. Treasury. Mortgage rates tend to rise when bond prices fall, and vice versa. Health of the economy. Interest rates are likely to rise during booming economic times when consumer demand is high and unemployment is low. When the economy weakens and demand for mortgages decreases, interest rates are expected to fall. Inflation. Banks and lenders may raise interest rates during periods of inflation to slow the rate of inflation. Additionally, inflation increases the prices of goods and services, reducing the purchasing power of a dollar.
While the factors mentioned above will determine the base rate for a new mortgage, there are a few areas borrowers can focus on to lower their interest rate.
Credit score. Applicants with a credit score of 670 or higher tend to qualify for better interest rates. Typically, most lenders require a minimum score of 620 to qualify for a conventional mortgage. Debt-to-income ratio (DTI). Lenders can issue mortgages to borrowers with a DTI of 50% or less. However, it is recommended that you apply with a DTI of less than 43%. Loan-to-value ratio (LTV). Conventional mortgages impose private mortgage insurance when the LTV exceeds 80% of the appraised value. This means that you must make a down payment of at least 20% to avoid high interest rates. Additionally, FHA mortgage insurance premiums expire after the first 11 years after you have made a down payment of at least 10%. Loan term. Longer-term loans, such as 30- or 20-year mortgages, tend to be charged higher interest rates than 15-year loan terms. However, monthly payments can be more affordable over longer periods. Home type. Interest rates on a primary residence can be lower than second homes or investment properties because in the event of a foreclosure, the primary mortgage lender is compensated first.
What type of mortgage is best for you?
Many homebuyers have access to more than one type of mortgage program, and each program has its own advantages.
Conventional mortgages. Conventional mortgages are ideal for borrowers with good or excellent credit who qualify for competitive interest rates. In addition, private mortgage insurance premiums can be waived by making a minimum 20% down payment. FHA loans. FHA mortgages are ideal for those applying with poor credit or a small down payment. If your credit score is above 580, you can make as little as 3.5% down. If your credit score is between 500 and 579, you'll need a minimum 10% down payment. VA loans. Qualifying borrowers with military backgrounds may prefer VA loans for their flexibility. No down payment required. While you pay a one-time funding fee, there are no ongoing mortgage insurance or servicing fees. USDA loans. Applicants in eligible rural areas can purchase or build a home with no down payment, but upfront and annual guarantee fees apply. In addition, income requirements apply, and this program requires a lower than moderate income. Jumbo loans. Homebuyers in areas with a higher cost of living will need to apply for a jumbo loan if their loan amount exceeds the Federal Housing Finance Agency's conforming loan limit, which in most jurisdictions is $726,200 in 2023.
Frequently Asked Questions (FAQ)
What is a reasonable mortgage interest rate?
Competitive mortgage rates currently range from 6% to 8% for a 30-year fixed loan. Several factors affect mortgage rates, including the repayment term, loan type, and the borrower's credit score.
How can I lower my mortgage interest rate?
Comparing lenders and loan programs is a great start. Borrowers should also aim for a good or excellent credit score of 670 to 850 and a debt-to-income ratio of 43% or less.
Additionally, making a minimum 20% down payment on a conventional mortgage automatically waives private mortgage insurance premiums, which can add to your borrowing costs.You can also lower your interest rate by purchasing discount points or lender credits.
How long can I lock in my mortgage interest rate?
Most interest rate lock-in periods are between 30 and 60 days, and lenders may not charge a fee for this initial period, however, some lenders will allow you to extend the interest rate lock-in period up to 90 or 120 days, but this may incur additional costs.