Compare current mortgage rates for today
For today, Monday, October 24, 2022, the current average 30-year fixed-mortgage rate is 7.24%, up 4 basis points over the past seven days. If you’re looking to refinance, the current average rate for a 30-year fixed refinance is 7.24%, up 5 basis points from a week ago. Meanwhile, the national 15-year fixed refinance is at 6.49%, up 3 basis points from a week ago. Whether you’re looking to buy or refinance,
Bankrate often has access to offers below the national average, featuring rates, APR (rate plus expense) and estimated monthly payments to help you compare deals and finance your home for less. Help to do. With rates rising, it’s important to shop around for mortgage offers before committing to a loan.
Mortgage Industry Insights
‘Expect the unexpected’: 30-year rate hits 7 percent
The benchmark fixed rate on a 30-year mortgage is closing at 7 percent, its highest level since 2007, according to Bankrate’s national survey of major lenders.
“Interest rates are rising at a faster pace than most of us have seen in our adult lives, and with the amount of global debt out there, this makes for a troubling combination,” says Greg McBride, chief financial analyst at Bankrate. “Volatility and uncertainty are to be expected, but we are reaching the point where it pays to expect the unexpected. These are unique times.”
After rising sharply in the early months of 2022, the 30-year fixed mortgage rate began to wobble in June, approaching 6 percent, then settling in the 5s. That respite was short-lived, as rates began to rise again in September, topping 6 percent. This month, some offers have broken the 7 percent threshold.
Federal Reserve policy does not directly affect rates on fixed mortgages, but the central bank has some influence with the 10-year Treasury yield, which drives fixed mortgage movements. However, the Fed’s actions affect adjustable-rate mortgage (ARM) and home equity products. Every time the central bank raises its prime rate, variable home loan rates move up in tandem.
For October and beyond, analysts expect more rate volatility, with inflation one of several markers to watch. Find out what the experts are predicting in Bankrate’s forecast.
No matter what type of mortgage you’re looking for, in this environment, it’s more important than ever to compare rates before choosing a lender.
“Conducting an online search can save thousands of dollars by finding lenders that offer lower rates and more competitive fees,” says McBride.
How to get a mortgage
A mortgage is a type of loan designed to purchase a home. Mortgage loan buyers can break up their payments over a set number of years by paying an agreed amount of interest.
Because a home is typically the largest purchase a person makes, mortgages are typically the largest portion of household debt. Getting the best possible terms on your loan can mean the difference of hundreds of extra dollars in or out of your budget each month and thousands of dollars out of your pocket over the life of the loan. Preparing for the mortgage application process is important to ensure you get the best rate and most affordable monthly payments.
Here are quick steps to prepare for a mortgage:
- Build your credit
- Create a budget
- Set aside savings for both the down payment and the monthly mortgage payment
- Research the best type of mortgage for you
- Compare current mortgage rates
- Choose the right lender
- Get pre-approved
- Look at multiple homes within your budget
- Apply and get approved for a mortgage
- Close on your new home
Different types of mortgages
There are many different types of mortgages, which are broadly placed into three buckets: conventional, government-insured, and jumbo loans, also known as non-conforming mortgages rate . This category also has different loan terms, such as 15 years or 30 years, and different interest rate structures, usually either fixed or adjustable (also known as variable).
Conventional mortgages
Conventional loans are often bought by Fannie Mae or Freddie Mac, which are large government-sponsored enterprises (GSEs) that play an important role in the mortgage lending market. They are offered by virtually every type of mortgage rate lender, with some programs allowing down payments as low as 3 percent. Conventional loans can be conforming or non-conforming; Conforming loans are loans backed by the GSEs.
Related: How to Best refinance your mortgage 2022-2023
Mortgages insured by the government
FHA Loans, VA Loans, USDA Loans
Government-insured or government-backed loans are backed by three agencies: the Federal Housing Administration (FHA Loans), the US Department of Agriculture (USDA Loans), and the US Department of Agriculture (USDA Loans). Department of Veterans Affairs (VA Loan). The US The government is not a mortgage rate lender, but it does set basic guidelines for each loan type offered by private lenders.
Government-backed loans can be good options for first-time home buyers as well as borrowers with low down payments or small budgets. The requirements are generally lower than for mortgages rate that are not guaranteed by the government (conventional mortgages). Interest rates on FHA, VA and USDA loans are generally similar to interest rates on conventional mortgages, but fees and other costs are higher.
Non-Conforming Mortgages
Jumbo mortgages
Jumbo mortgages are loans that exceed federal loan limits for conforming loan amounts. For 2022, the maximum conforming loan limit for single-family homes in most of the U.S. is $647,200, and $970,800 in more expensive locales. Jumbo loans are more common in higher-cost areas and generally require more in-depth documentation to qualify. Jumbo loans are also a bit more expensive than conforming loans.
Fixed-rate mortgages
A fixed-rate mortgage has an interest rate that doesn’t change throughout the life of the loan. In that way, borrowers are not exposed to rate fluctuations. For example, if you have a fixed-rate mortgage ratewith a 6.8 percent interest rate and prevailing rates shoot up the next week, year or decade, your interest rate is locked in, so you don’t ever have to worry about paying more. Of course, if rates fall, you’ll be stuck with your higher rate unless you refinance. There are many types of fixed-rate mortgages, such as 15-year fixed-rate, jumbo fixed-rate and 30-year fixed-rate mortgages.
Adjustable-rate mortgages
An adjustable-rate mortgage, or ARM, has an initial fixed-rate period during which the interest rate does not change, followed by a longer period during which the rate can change at preset intervals. Unlike fixed-rate mortgages rate, ARMs are affected by market fluctuations, so if rates drop, your mortgage payments will drop. However, the reverse is also true: when rates rise, so will your monthly payments. Generally, ARM rates are lower to begin with than fixed-rate mortgages, but because they’re not locked into a set rate, you won’t be able to predict future monthly payments. ARMs come with an interest rate cap, however, above which your loan cannot increase.
How is my mortgage rate determined?
Lenders consider these factors when pricing your interest rate:
- Credit score
- Down payment
- Property location
- Loan Amount/Closing Costs
- Type of loan
- Tenure of Loan
- Type of interest rate
Your credit score is the most important driver of your mortgage rate. Lenders have settled on this three-digit score as the most reliable predictor of whether you’ll make prompt payments. The higher your score, the less of a risk you pose in a lender’s eyes — and the lower the rate you’ll pay.
Lenders also consider how much you’re putting down. The larger the portion of the total home price you pay upfront, the more favorably they will view your application. The type of mortgage rate you choose can also affect your rate, with shorter-term loans like 15-year mortgages typically having lower rates than 30-year ones.
What is the minimum credit score to get a mortgage?
Lenders reserve their most competitive rates for borrowers with excellent credit scores — typically 740 or higher. However, you don’t need impeccable credit to qualify for a mortgage rate. The minimum credit score required for a loan insured by the Federal Housing Administration, or FHA, is 580, although you’ll probably need a score of 620 or higher to qualify with most lenders. (While FHA loans offer competitive rates, the fees are much higher.)
FAQs about mortgage interest rates
What are the pros and cons of getting a mortgage vs. renting?
Homeownership is synonymous with the American Dream, but the housing boom has pushed this goal out of reach of many. Some of the advantages and disadvantages of homeownership:
Pros
- A home is a powerful way to build wealth over time.
- Homeownership provides the certainty of knowing where you’ll live from one year to the next.
- With a fixed-rate mortgage rate, you know your principal and interest costs won’t change. A landlord can boost your rent when your lease is up.
Cons
- Homeownership is expensive, prohibitively so in some markets.
- Maintenance and repairs are a constant — and costly — reality for homeowners.
- As home values rise, so do insurance premiums and property taxes.
Looking to refinance your mortgage rate?
As mortgage rate rates rise, fewer homeowners, if any, will benefit from refinancing today.
However, refinancing your mortgage rate may still make sense in some cases, such as if you want to switch to a fixed rate before the ARM resets, get out of an FHA loan to remove mortgage rate insurance, or need to refinance due to a divorce. is or other circumstances. It’s also possible to tap into your home equity to pay for home renovations, or, if you want to pay off your mortgage rate faster, you can shorten your term to 20, 15 or even 10 years. Because home values have risen sharply over the past few years, it’s also possible that refinancing can free you from paying for private mortgage insurance.
There are upfront costs associated with refinancing, including appraisals, so you want to make sure the savings outweigh the refinance price tag over a reasonable period of time — most experts say the ideal breakeven timeline is 18 to 24 months.