Today’s mortgage rates on 30-year fixed-rate loans are averaging at 6.65%, up slightly by 0.04% from last week, according to data from Curinos. Borrowers who prefer shorter loan terms can opt for a 15-year fixed mortgage, which typically offers lower rates. As of today, the 15-year fixed mortgage rate stands at 5.71%. While shorter loan terms mean quicker repayment, monthly payments will be higher compared to 30-year mortgages.
For those considering refinancing, the current average refinance rate can offer potential savings depending on individual circumstances.
Mortgage Rates for September 24, 2024
| Loan Term | Rate | Change | Previous Rate |
|---|---|---|---|
| 30-Year Fixed Rate | 6.65% | +0.04% | 6.61% |
| 15-Year Fixed Rate | 5.71% | +0.02% | 5.69% |
| 30-Year Jumbo Mortgage Rate | 6.76% | +0.08% | 6.68% |
30-Year Fixed Mortgage Rates
As of today, the average rate on a 30-year mortgage is 6.65%, up from 6.61% last week. The annual percentage rate (APR), which includes both interest and fees associated with the loan, is now 6.67%. Based on this rate, a $100,000 mortgage would have monthly payments of around $642 (excluding taxes and other fees), and borrowers would end up paying approximately $131,179 in total interest over the life of the loan.
15-Year Fixed Mortgage Rates
Currently, the 15-year mortgage rate is at 5.71%, a slight increase from last week’s 5.69%. The APR for these loans is 5.74%, up from 5.69% last week. With today’s rate, a $100,000 loan would require monthly payments of about $828 in principal and interest, with the total interest paid over the life of the loan estimated at $49,117.
Jumbo Mortgage Rates
For borrowers seeking larger loans, the average rate for a 30-year fixed-rate jumbo mortgage has risen to 6.76%, an increase of 0.08 percentage points from last week. For a $100,000 jumbo mortgage, the monthly payment for principal and interest would be around $649. For a larger loan of $750,000, the monthly payment would be approximately $4,867.
Understanding APR and Its Importance
The annual percentage rate (APR) represents the true cost of a mortgage by combining the interest rate with associated fees and finance charges. Because it reflects the total cost of borrowing, APR is typically higher than the interest rate but provides a more accurate picture of the loan’s overall cost.
How Mortgage Rates Are Determined
Several factors influence mortgage interest rates, many of which are beyond the borrower’s control:
- Federal Reserve Policy: Rate changes by the Federal Reserve affect the benchmark interest rates for borrowing, which in turn influence mortgage rates.
- Bond Market Movements: Mortgage rates often fluctuate based on movements in the bond market, especially in relation to the 10-year U.S. Treasury bond.
- Economic Health: During periods of strong economic performance, mortgage rates may rise due to higher demand and lower unemployment. In contrast, rates often decrease during economic downturns.
- Inflation: Lenders may increase mortgage rates during times of inflation to offset the declining purchasing power of the dollar.
How Borrowers Can Influence Their Mortgage Rate
While many factors that affect mortgage rates are macroeconomic, there are several areas where borrowers can take action to potentially secure better rates:
- Credit Score: A score above 670 generally helps qualify for better rates, while a score below 620 may make it difficult to get approved for a conventional loan.
- Debt-to-Income (DTI) Ratio: A DTI below 43% is ideal, though some lenders may allow a ratio of up to 50%.
- Loan-to-Value (LTV) Ratio: Making a down payment of at least 20% can help avoid private mortgage insurance and lead to more favorable rates.
- Loan Term: Shorter loan terms, like 15 years, often come with lower rates but result in higher monthly payments.
- Property Type: Lenders tend to offer lower rates for primary residences compared to second homes or investment properties.
Finding the Right Type of Mortgage Loan
Conventional loans from private lenders often offer the best rates for borrowers with strong credit and the ability to make a significant down payment, usually 20%. Some lenders also provide first-time buyer loans with smaller down payment options.
For those with limited credit or finances, government-backed loans may be the better option:
- FHA Loans: These loans require a minimum credit score of 580 and a 3.5% down payment, though upfront and annual mortgage insurance premiums apply.
- USDA Loans: Available to buyers in eligible rural areas, USDA loans require no down payment but include upfront and annual guarantee fees.
- VA Loans: For qualifying veterans and military members, VA loans typically require no down payment and have fewer fees than FHA or USDA loans.
