If you are thinking about buying a home or refinancing, mortgage rates are likely one of the first things you check. Even small changes can affect your monthly payment and the total cost of your loan, which is why many borrowers follow them closely.
Mortgage rates may fluctuate by only fractions of a percent, but those small differences can translate into thousands in long-term savings. Understanding what influences these rates can help you lock in a better deal.
Here is where 30-year mortgage rates stand today, what is driving recent movement and what it could mean for your next move.
30-year mortgage rates
If you are shopping for a mortgage, the rate you lock in can shape your monthly budget for years to come. Even a small difference in interest can add up quickly, which is why it pays to pay attention to where rates stand and how much they can vary.
Right now, average mortgage interest rates stand at 6.30% for a 30-year fixed loan and 5.65% for a 15-year fixed loan, according to Freddie Mac. But these are just averages. The rate you are offered can vary by lender, credit profile and loan terms, making it important to compare multiple options before deciding where to borrow.
A small rate change can have a real impact. For example, on a $420,000 home with 20% down, you would finance $336,000.
At 6.75%, the monthly payment is about $2,179. At 6.25%, it drops to roughly $2,068, saving you about $1,300 each year.
Interest Rate |
Monthly Payment |
Annual Payment |
Total Interest (30 yrs) |
Total Cost (Principal + Interest) |
7.00% |
$2,235.42 |
$26,825.00 |
$468,749.90 |
$804,749.90 |
6.75% |
$2,179.29 |
$26,151.48 |
$448,544.26 |
$784,544.26 |
6.50% |
$2,123.75 |
$25,484.98 |
$428,549.48 |
$764,549.48 |
6.25% |
$2,068.81 |
$24,825.72 |
$408,771.53 |
$744,771.53 |
6.00% |
$2,014.49 |
$24,173.88 |
$389,216.32 |
$725,216.32 |
These calculations are for illustrative purposes only and assume a 20% down payment on a $420,000 home. Monthly and total costs reflect principal and interest payments only and do not include property taxes, homeowners' insurance, HOA fees or other costs of homeownership.
Use the tool below, powered by Bankrate, to explore and compare some of today's best mortgage offers:
If you already have a mortgage, remember that you can refinance. This was a plan for many people who bought while interest rates were high. The expectation was that when rates went down, they'd be able to refinance and get a better deal.
Refinance rates haven't gone down enough to make this an entirely attractive prospect yet, but the expectation is that in the future they will.
Read more on how refinancing a mortgage works and what it costs.
4 ways to get a lower mortgage rate
Market conditions influence mortgage rates, but you can take several proactive steps to improve your chances of securing a lower interest rate. Here are four key strategies to help you save on your mortgage.
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 credit card 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 before you choose your mortgage lender to ensure you're getting the lowest interest rates available to you.
Consider an adjustable-rate mortgage (ARM)
If you know you're going to sell your home in the 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. A mortgage calculator can help you estimate how an adjustable-rate mortgage (ARM) payment may change over time and what that means for your monthly budget.
You'll be able to take advantage of the lower interest rates associated with this kind of mortgage, and you won't have to worry about your rate changing before you sell.
Looking for the best 30-year mortgage rate can save you thousands over the life of your loan. By boosting your credit score, making a larger down payment and shopping around for quotes, you can put yourself in a better position to get a lower rate.
