Getting the best 30-year mortgage rate possible can save you thousands of dollars a year. And the good news is, after hovering in the high 6% and 7% range for much of 2023 and 2024, rates are falling. After the Fed's latest meeting, when the central bank cut interest rates for the first time in four years, mortgage rates reached the lowest level since February 2023. As of September 26, 2024, rates were just 6.08%. And while they've increased slightly since then, they are nonetheless down one-and-a-half percentage points over the last 12 months, according to Freddie Mac.
And more interest rate cuts are on the way. The Federal Reserve is expected to continue cutting the federal funds rates throughout the rest of this year and into next. And while the Federal Reserve does not directly control mortgage rates, its actions do influence rates indirectly.
Currently, the average 30-year mortgage rate is at 6.12%, compared to 6.08% last week and 7.31% last year. Overall, this is lower than the long-term average of 7.72%.
30-year mortgage rates
The average interest rate for a 30-year fixed mortgage is at 6.12%, as of October 3. In September, the average rate for 30-year fixed mortgages was higher, at 6.35%.
Additionally, the interest rate for a 15-year fixed mortgage is at 5.25%, compared to 5.16% a week ago and down from 6.72% last year. This is higher than the long-term average of 5.24%. Rates for 15-year fixed mortgages last month were 5.47%.
Use our tool, in partnership with Bankrate, to compare current mortgage rates available for purchase and refinancing.
Four ways to get a lower mortgage rate
- Raise your credit score: One of the best and most effective ways to save on your mortgage is to raise your credit score, the biggest factor in determining your mortgage rate. Upping your FICO credit score, which ranges from 300 to 850, by just 20 points can save you hundreds of dollars by lowering your mortgage. So, while you’ll likely need at least a 620 FICO score in order to qualify for a mortgage at any rate, you'll need a higher score to get approved for the best rates. Raising your credit score can be done in a number of ways, including making card payments on time and keeping balances low.
- Increase your down payment: In order to get the best rates on a conventional mortgage loan from Fannie Mae or Freddie Mac, you'll need to make at least a 20% down payment. In fact, the bigger your down payment is, the better your rate will likely be. You'll have to repay less principal and less interest over the life of the loan.
- Get multiple quotes: Different lenders may offer different rates. Because of this, it's important to get multiple quotes to ensure you're getting the lowest interest rates available for you.
- Consider an adjustable-rate mortgage (ARM): if you know you're going to sell your home in the near future, opting for an ARM could be a good decision. For example, if you're going to sell your home in four years, choosing a 5 year ARM could save you a lot in interest. You'll be able to take advantage of the lower interest rates associated with this kind of mortgage, and won't have to worry about your rate changing before you sell.
