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Thinking about taking out a mortgage soon and want to know how interest rates are trending? Check out current 30-year mortgage rates and see if a 30-year mortgage is right for you.
Overview of 30-year mortgage interest rates
The 30-year fixed rate mortgage is by far the most popular mortgage option out there, and because the term of this mortgage is so long, borrowers who take out a 30-year mortgage will have lower monthly payments, but they will ultimately end up paying much more in interest over the life of the loan.
Mortgage interest rates directly affect the monthly cost of buying a home. Average interest rates change daily, and even hourly, depending on larger economic trends. The interest rate you pay is determined by both these larger economic factors and your personal financial situation. Mortgage lenders consider your credit score, down payment, debt-to-income ratio, and the type of loan you take out when determining the interest rate you'll be loaned.
Current trends in 30-year mortgage rates
Over the past few decades, it was common for interest rates on a 30-year mortgage to be in the 5% to 6% range. Prior to 2000, interest rates were much higher, sometimes reaching double digits. During the pandemic, interest rates have hit historic lows, sometimes below 3%.
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Interest rates have risen dramatically from historic lows during the pandemic and have been trending upwards through much of last year.
Interest rates are remaining relatively high into 2024. According to Zillow data, the average rate for a 30-year fixed mortgage was 6.76% in May, down just nine basis points from the previous month, and the same trend has continued in June so far.
Overall, mortgage rates are expected to decline in the second half of 2024. However, we may have to wait until 2025 to see significant declines in interest rates.
Current 30-year mortgage rates
Check out the latest new mortgage rates and mortgage refinance rates to see how they compare to current 30-year mortgage rates. For more information on refinancing, visit our 30-year refinance rates page.
Factors that Affect 30-Year Mortgage Rates
Federal Reserve Policy
The Federal Reserve can have a significant, albeit indirect, influence on mortgage rates.
The Federal Reserve changes the federal funds rate to stimulate or slow economic growth. When the Federal Reserve lowers this rate, it generally makes borrowing more expensive and stimulates economic activity. When the Federal Reserve raises this rate, it generally makes borrowing more expensive and suppresses economic activity.
While mortgage rates aren't directly tied to the federal funds rate, they often rise and fall depending on how investors anticipate how the Fed's moves will affect the overall economy.
For example, mortgage interest rates are currently high because the Federal Reserve is keeping interest rates high to keep inflation down. If Fed officials believe that inflation is effectively under control, they will likely begin to lower interest rates. This would significantly reduce the upward pressure on mortgage rates and would begin to trend lower.
inflation
When inflation is high, the Fed tries to suppress it by raising interest rates. This puts upward pressure on borrowing costs overall — everything from mortgages to credit cards to car loans becomes more expensive. Conversely, when the Fed cuts interest rates, borrowing costs for consumers fall.
Bond Market Trends
Mortgage interest rates are heavily influenced by investor demand for mortgage-backed securities. MBS and bonds are generally considered safer investments and attract similar investors, so you can get an idea of where mortgage rates are likely to head based on bond market movements.
Mortgage interest rates typically follow the yield on a popular government bond called the 10-year Treasury note.
Comparing interest rates for a 30-year mortgage and a 15-year mortgage
A 15-year fixed-rate mortgage is another popular loan term if you want to pay off your mortgage faster and reduce the amount of interest you pay over the life of your loan. The average interest rate on a 15-year mortgage is lower than interest rates on longer-term mortgages.
To see the difference in what you'll pay for a 30-year mortgage versus a 15-year mortgage, let's look at an example of a $250,000 loan using average interest rates for the first week of June 2024, according to data from Freddie Mac.
As you can see, a 30-year fixed rate mortgage will have a significantly lower monthly payment, but you will pay significantly more in interest over the life of the loan than a 15-year fixed rate mortgage.
But if keeping monthly costs down is a priority, a 30-year mortgage is likely a better option.
Pros and cons of a 30-year fixed rate mortgage
Strong Points
You'll keep your interest rate low, even if mortgage rates rise: Unlike adjustable-rate mortgages, fixed-rate mortgages keep your interest rate constant for the life of the loan. You'll have a lower monthly payment: Payments on a 30-year mortgage are lower than shorter-term mortgages because you spread your payments out over a longer period. Predictable payments make it easier to budget: Because your interest rate stays the same year after year, it's easier to plan your overall monthly expenses.
Cons
If mortgage interest rates fall, you're locked into a higher rate. If you lock in your rate for 30 years, you won't benefit from a fall in interest rates later. The shorter the term, the lower the interest rate. If you don't mind a higher monthly payment, a 20- or 15-year fixed term is a better choice because it will lower your interest rate. You'll pay more in interest in the long run. The reason you'll pay more with a 30-year term than with a shorter term isn't just because the interest rate is higher. You have more time for interest to accumulate, so you'll pay more in interest over time.
How to secure the best 30-year mortgage rate
Improve your credibility
Lenders take your financial situation into account when determining interest rates. The better your financial situation, the lower your interest rate will be.
Credit score: Most mortgages require a minimum credit score of 620, and you can get a mortgage with a score of 580 for an FHA loan. However, the higher your score, the better. To improve your score, make sure you make payments on time, pay off your debts, and let your credit mature. Down payment: Depending on the type of mortgage you take out, lenders may require a down payment of 0% to 20%. However, the higher your down payment, the lower your interest rate may be. Debt-to-income ratio: Your DTI is the amount of your debt payments relative to your monthly income. You usually can't get a mortgage with a DTI above 50%, but a lower DTI ratio will give you a lower interest rate. To lower your DTI ratio, you'll need to pay off your debts or increase your income.
Look around
Get interest rate quotes from multiple mortgage lenders to ensure you get the best possible terms. You can also ask lenders about the types of mortgages they offer and the interest rates you can get for different types of loans. For example, government-insured mortgages often have lower interest rates than conventional loans.
Consider the timing
Having a strong financial profile can make a big difference in the mortgage interest rate you pay, but the larger economic factors that influence average rates make a difference as well.
If you're flexible about when you take out your mortgage, check out our latest mortgage rate forecast to see if interest rates will rise or fall soon. You can also get an idea of what interest rates will be like in the near future by keeping an eye on the latest inflation data and seeing if the Fed will raise or lower interest rates at its upcoming meetings.
Use our free mortgage calculator to see how current 30-year interest rates will affect your monthly payments and long-term finances.
Mortgage Calculator
$1,161 Estimated Monthly Payment
Paying a 25% higher down payment would save you $8,916.08 in interest. Lowering your interest rate by 1% would save you $51,562.03. Paying an extra $500 per month would shorten the term of your loan by 146 months.
Is a 30-year fixed mortgage right for you?
If you want to keep your monthly payments relatively low, a 30-year fixed mortgage is probably the way to go.
If you are keen to pay off your mortgage faster and don't mind higher monthly payments, you may want to consider a shorter term loan. If you are refinancing, you may want to consider a 15-year mortgage refinance to lower your interest costs.
You don't necessarily have to live in your home for 30 years to benefit from a 30-year mortgage — even if you plan on moving in a few years, you can still benefit from a lower monthly payment.
You may want to go for an adjustable-rate mortgage if you can get a significant discount compared to your current fixed rate, but be sure to understand how much your monthly payments could increase in the future as interest rates adjust.
Frequently Asked Questions About 30-Year Mortgage Rates
The average interest rate on a 30-year mortgage has been rising, with rates generally hovering in the high 6% to 7% range recently, according to Zillow data.
The right interest rate for a 30-year mortgage will change over time depending on the current economic situation, so check the latest average rates and compare them to the interest rate quotes you've been given by your lender to make sure you're getting a fair rate.
If you want to work with a particular lender but can get a better rate elsewhere, you may be able to convince that lender to match a lower rate to keep the deal in place.
Mortgage rates can change daily, or even hourly, based on trends in the bond market, expectations regarding Federal Reserve policy changes, and trends in the overall economy.
A lower interest rate usually means you'll pay less interest over the life of your loan, but you should also consider the overall cost of your mortgage. Some lenders may have a lower interest rate but higher fees.
Generally, the more you put down, the lower your interest rate. A larger down payment lowers your loan-to-value ratio and reduces the risk the lender takes on, which means you may be able to get a lower interest rate.
Laura Grace Tarpley, CEPF
Editor, Personal Finance Review
Elias Shaya
Compliance Associate
Molly Grace
Mortgage Reporter
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