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According to data from Zillow, interest rates on the most popular 30-year fixed mortgage averaged about 6.76% as of May 2024. The rate on the 15-year mortgage, which is also relatively popular, was 6.07%. Rates have been trending downward this month.
Based on recent home price and mortgage rate data, the average monthly payment on a 30-year fixed mortgage is currently $2,883.
Mortgage interest rates are constantly changing, and there are many factors that affect interest rates – some of which are personal and over which you have control, and some that are outside of your control.
Most experts believe mortgage rates will fall in 2024, but the rate cuts may not come until later this year.
Current average mortgage interest rates
See what mortgage rates are trending today.
Keep in mind that while average mortgage and refinance rates can give you an idea of what current interest rates are, they don't guarantee the rate a lender will offer you. Mortgage rates vary from borrower to borrower based on factors such as the borrower's creditworthiness, loan type, and down payment.
To get the best interest rate, you should get quotes from multiple lenders.
How are mortgage interest rates determined?
Mortgage interest rates depend on several factors, some of which are outside of your control and some of which you can influence.
Individual factors that affect mortgage interest rates
The main deciding factors you can control are:
Your credit score, debt-to-income ratio, down payment size, mortgage type, and length of repayment term.
The role of the economy and government policies
No matter how good your financial situation is, you won't be able to get an interest rate that's significantly lower than the average. Interest rates are determined primarily by economic trends and how those trends affect investor demand for mortgage-backed securities.
When the economy is growing rapidly, mortgage interest rates usually rise. In recent years, rising inflation has caused mortgage rates to rise. When growth slows, interest rates tend to fall.
Federal Reserve policies can also affect mortgage interest rates. When the Federal Reserve raises or lowers the federal funds rate, mortgage interest rates can go up or down as well, depending on how investors think the Federal Reserve's changes will affect the overall economy.
Trends in average mortgage interest rates
Comparison with last year
Data from Freddie Mac shows how average mortgage interest rates have changed over time.
Throughout 2020, average mortgage interest rates declined significantly due to the economic impacts of the COVID-19 pandemic. According to Freddie Mac, 30-year fixed mortgage rates hit an all-time low of 2.65% in January 2021. Rates have started to rise again in 2022.
Most leading forecasts expect interest rates to start to fall over the next few years, eventually settling in the 5% range.
Mortgage rates by state
Rates vary by location, please see the link below for the latest rates in your state.
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
new york
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
Washington DC
West Virginia
Wisconsin
Wyoming
Interest rates by type of mortgage
Purchase Mortgage
The interest rate on the mortgage you used to purchase your home is often more favorable than the interest rate you'll be offered on a refinance. Rates vary depending on the length of the loan and whether the rate is fixed or variable. The two most popular types are:
30-Year Mortgage Rates: The most common mortgage, this mortgage lowers your monthly payments by spreading the amount over 30 years. 15-Year Mortgage Rates: With this type of loan, your interest rate and payments will remain the same, but because your payments are spread out over 15 years, your monthly payments will be higher. However, your interest rate will be lower than with a 30-year loan.
Refinancing your mortgage
Mortgage refinance rates usually vary slightly from purchase rates and may be slightly higher, especially for cash-out refinances, as they are considered riskier.
If you're considering refinancing, be sure to research the best mortgage refinance lenders and get multiple interest rate quotes to ensure you're getting the best terms.
30-Year Mortgage Refinance Rates: Refinancing to a 30-year loan can lower your monthly payments because you're spreading out your debt over a longer period of time. 15-Year Mortgage Refinance Rates: Refinancing to a shorter term, such as a 15-year loan, can increase your monthly payments but save you money on interest.
Home Equity Lines of Credit (HELOCs) and Home Equity Loans
HELOC and home equity loan rates are usually a bit higher than first mortgage rates, but they can still be worth it if you want to tap into the equity in your home without paying a new interest rate on your main mortgage.
As with any type of mortgage, finding the best HELOC or home equity loan lender will require you to shop around and get multiple interest rate quotes.
Average rates by credit score
According to data from credit scoring company FICO, the lower your credit score, the more you'll pay for credit. As of June 2024, here are the average interest rates by credit level for a 30-year fixed-rate $300,000 mortgage:
According to FICO, only those with credit scores of 660 or higher will actually be able to enjoy interest rates around the national average.
How mortgage rates affect homebuyers
How interest rates affect affordability and purchasing power
If you get a lower interest rate, you can borrow more money, increasing your homebuying power.
For example, let's say you can afford to spend $2,000 a month on your mortgage payment (not including taxes and insurance). If your interest rate is 7%, the amount you can borrow is about $300,000. But if your interest rate is 4%, the maximum amount you can borrow is $400,000.
Buying strategies in a floating interest rate environment
If you're buying a home when interest rates are high, you'll need to adjust your homebuying plan accordingly. You may need to lower your price range or make a larger down payment to make the monthly payments more affordable.
In a low-interest rate environment, you should also be careful about overspending. Although low interest rates may allow you to borrow a large amount, be careful not to go over your budget too much. You don't necessarily have to borrow the full amount that your mortgage lender has approved for you.
How to get the best mortgage rate
Tips to get the best rate
One of the best ways to get a good interest rate is to get approved by two or three lenders and compare the interest rates offered by each lender.
If you're having trouble getting a good rate, consider improving your credit or saving up a larger down payment and then applying again later.
The importance of credit scores and down payments
Your credit score can have a big impact on how much you pay when getting a mortgage.
Check out Insider's picks for the best mortgage lenders »
The higher your score, the less you'll pay when borrowing. Generally, the minimum credit score needed to buy a home is 620, but there are exceptions for government-backed loans.
Mortgage interest rate outlook
Mortgage rates are expected to eventually trend lower, but likely not until inflation slows further.
Fannie Mae and the Mortgage Bankers Association project 30-year rates will be 6.7% and 6.6%, respectively, by the end of the year.
Average mortgage interest rates FAQs
Mortgage interest rates are influenced by economic trends and investor demand for mortgage-backed securities.
The average 30-year mortgage interest rate was 6.76% in May 2024. Rates in June decreased slightly.
The average mortgage interest rate approached 8% in October 2023 but has since fallen a bit. However, interest rates can vary widely depending on your financial situation. Even if you have a low credit score, you may be able to get an interest rate around 8%. Interest rates are expected to fall this year, so the average interest rate may never reach 8%.
If you're planning on buying a home, you may not be able or want to wait for interest rates to drop. Buying when interest rates are high has its benefits: You can often get a cheaper home because there isn't as much competition.
The higher your credit score, the better your mortgage interest rate will be, so aim for a credit score in at least the 700s to get the best mortgage rates.
Mortgage interest rates are higher than they were a year ago.
To get a lower interest rate, you'll need a good credit score, a larger down payment, and a low debt-to-income ratio.
Mortgage rates are expected to fall soon, but when and how much will depend on inflation. If price growth continues to slow, interest rates should fall in the coming months. If inflation remains sluggish, you may have to wait a little longer.
Molly Grace
Mortgage Reporter
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