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According to Curinos, the current interest rate for a 30-year fixed mortgage is 7.54%. The average interest rate for a 15-year fixed mortgage is 6.79% and the average interest rate for a 30-year jumbo mortgage is 7.43%.
Mortgage interest rates as of July 2, 2024
Source: Curinos
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30-year mortgage rates
The average interest rate on a 30-year fixed-rate mortgage today is 7.54%, 0.17 percentage points higher than last week.
The Annual Percentage Rate (APR) for a 30-year fixed mortgage, which includes interest and loan origination fees, is 7.56%. Last week's APR was 7.38%.
To get an idea of how much you'll pay in interest, consider that a current 30-year, 7.54% fixed-rate mortgage for a $100,000 loan would cost you $702 per month in principal and interest (not including taxes and fees), according to Forbes Advisor's mortgage calculator. The total amount you'll pay in interest over the life of the loan is $152,729.
15-year mortgage rates
The average interest rate for a 15-year fixed rate mortgage is 6.79%. At the same time last week, the 15-year fixed rate mortgage was 6.63%.
The annual interest rate for the 15-year fixed rate is 6.83%, up from 6.66% at the same time last week.
At current interest rates of 6.79%, a 15-year fixed-rate mortgage on $100,000 would cost $887 per month in principal and interest. You'll pay a total of $59,723 in interest over the life of the loan.
Jumbo mortgage interest rates
The current average interest rate for a 30-year fixed rate jumbo mortgage is 7.43%, up 0.08 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 7.43% will cost you $695 in monthly principal and interest payments per $100,000.For a $750,000 jumbo mortgage, monthly principal and interest payments would be about $5,210.
How much house can you afford?
Buying a home is a big purchase that can take a big hit to your savings, so before you start your home search, it's important to calculate how big a home you can afford and how much you're willing to spend.
In addition to considering your income and debts, you should also consider emergency savings and long-term financial goals, like retirement or going to college.
Here are some basic financial factors that affect your ability to afford a home:
Income Debt Debt-to-Income Ratio (DTI) Down Payment Credit Score
How are mortgage interest rates determined?
Mortgage interest rates are determined by several factors, including some that are outside of a borrower's control.
Federal Reserve. The Federal Reserve'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 Federal Reserve'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 be more likely 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 if you make 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 the primary mortgage lender receives compensation first in the event of a foreclosure.
What type of mortgage is best for you?
Conventional mortgages are issued by private lenders and usually require good or excellent credit and a minimum 20% down payment to get the best interest rates, although some lenders offer loans and grants for first-time homebuyers with a relaxed 3% minimum down payment requirement.
For buyers with limited credit or funds, a government-guaranteed loan is usually the better option because it is easier to meet minimum loan requirements.
For example, an FHA loan requires a 3.5% down payment if your minimum credit score is 580, and at least 10% if your credit score is between 500 and 579. However, upfront and annual mortgage insurance premiums may apply over the life of the loan.
Buyers who live in eligible rural areas and have a low to moderate income can also consider a USDA loan. This program doesn't require a down payment, but you will have to pay an upfront payment and annual insurance fees over the life of the loan.
If you have a qualifying military history, a VA loan may be the best option for you. First, in most cases, no down payment is required. Second, borrowers pay a one-time funding fee but don't have to pay the annual fees required by FHA and USDA loan programs.
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.