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The most common 30-year fixed mortgage’s average interest rate is 6. The average monthly mortgage payment for a 30-year fixed mortgage is currently $2,064 according to data from S&P Global.
There are numerous variables that can affect your interest rate, and mortgage interest rates are constantly fluctuating. It’s important to understand what your interest rate might be as you begin the process of getting a home loan, even though some of them are personal factors you have control over and some aren’t.
What are today’s mortgage rates?
Despite the daily fluctuations in mortgage rates, the years 2020 and 2021 saw record-low mortgage and refinance rates across the US.
Although low average mortgage and refinance rates are a good sign for a loan that is more affordable, keep in mind that they are never a guarantee of the rate a lender will offer you. Mortgage rates vary depending on the borrower and are affected by things like credit, loan type, and down payment. You should collect rates from several lenders in order to get the one that is best for you.
| Mortgage type | Average rate today |
Average mortgage interest rate by type
There are numerous types of mortgages available, and they typically vary by the number of years the loan will be outstanding and whether the interest rate will be fixed or adjustable. There are three main types:
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These three different mortgage interest rates are compared below:
| Mortgage type | Average rate |
| 30-year fixed mortgage | 6.72% |
| 15-year fixed mortgage | 6.08% |
| 5/1-year adjustable rate mortgage | 5.57% |
Average mortgage interest rate by credit score
Mortgage rates can also be influenced by personal factors like your credit history, which are independent of national interest rates.
Your credit score, which ranges from 300 to 850, is based on your borrowing, credit use, and repayment history. It serves as a measure of how effectively you use credit. You can check your credit score online for free. The lower your interest rate will be the higher your score is. The minimum credit score required to purchase a home is typically 620, with some exceptions for government-backed loans.
Data from credit scoring company FICO shows that the lower your credit score, the more youll pay for credit. Heres the average interest rate by credit level for a 30-year fixed-rate mortgage of $300,000:
| FICO Score | National average mortgage APR |
|
620 to 639 |
7.818% |
|
640 to 659 |
7.272% |
|
660 to 679 |
6.842% |
|
680 to 699 |
6.628% |
|
700 to 759 |
6.451% |
|
760 to 850 |
6.229% |
Only those with credit scores above 660, according to FICO, will actually experience interest rates close to the national average.
Average mortgage interest rate by year
Mortgage rates are constantly fluctuating, largely depending on the state of the overall economy. The rate you’ll see can be impacted by factors such as inflation, the bond market, Federal Reserve policy, and general housing market conditions.
Heres how the average mortgage interest rate has changed over time, according to data from Freddie Mac.
| Year | Average 30-year fixed mortgage rate (January) |
| 2000 | 8.15% |
| 2001 | 7.07% |
| 2002 | 7.14% |
| 2003 | 5.85% |
| 2004 | 5.87% |
| 2005 | 5.77% |
| 2006 | 6.15% |
| 2007 | 6.18% |
| 2008 | 6.07% |
| 2009 | 6.01% |
| 2010 | 5.09% |
| 2011 | 4.77% |
| 2012 | 3.87% |
| 2013 | 3.34% |
| 2014 | 4.53% |
| 2015 | 3.73% |
| 2016 | 3.97% |
| 2017 | 4.20% |
| 2018 | 3.95% |
| 2019 | 4.51% |
| 2020 | 3.72% |
| 2021 | 2.65% |
| 2022 | 3.22% |
The economic effects of the coronavirus crisis caused a sharp decline in the average mortgage rate throughout the year 2020. Rates in 2020 and 2021 were lower than they were during the worst of the Great Recession. Thirty-year fixed mortgage interest rates hit a low of 2. 65% in January 2021, according to Freddie Mac.
Average mortgage interest rate by state
The state where youre buying your home could influence your interest rate. Heres the average interest rate by loan type in each state according to data from S&P Global.
How are mortgage rates determined?
The interest rate you’ll pay on a mortgage is influenced by a number of factors. Some are outside of your control. Others you can influence.
For instance, a variety of interest rates, such as mortgage interest rates, are influenced by the federal funds rate, which banks charge each other when they lend money. In an effort to combat inflation, the Federal Reserve modifies the federal funds rate. Therefore, its a factor that is beyond your control.
Key determining factors that you do have control over include:
What to know before getting a mortgage
An example of a secured loan used to buy a home is a mortgage. You repay the lender over the specified time period, along with additional interest payments that you can think of as the cost of borrowing money. (Paying off your mortgage early is an option as well, but there are advantages and disadvantages to consider. ).
A mortgage is a secured loan, so you must pledge your property as security. If you consistently miss payments, the lender has the right to seize or reclaim your property. Learn more about how a mortgage works here.
How much can I borrow for a mortgage?
Your financial situation, including your credit score, your income, and the amount of money you have set aside for a down payment, will all have an impact on how much you can borrow for a mortgage.
You can avoid paying mortgage insurance with a 20% down payment on a conforming mortgage (the kind that most people get, backed by the government-sponsored enterprises Fannie Mae or Freddie Mac rather than a government agency). 20% down would require an upfront payment of $80,000 on a $400,000 house. A conforming mortgage may be available with a down payment as low as 3%.
Note that if you are eligible for an FHA or VA loan, which both require minimum 3 percent down payments, this calculation may be different. Except for Alaska, Hawaii, Guam, and the US Virgin Islands, 5%, or if you’re looking for a “jumbo loan” over $647,200 in most of the US in 2022
You don’t have to accept the mortgage that the first bank offers you. Before choosing where to get your mortgage, you should get a few estimates because, like anything else, different servicers offer different fees, closing costs, and products. Keep in mind that paying a mortgage isn’t the only expense associated with owning a home; you’ll also need to budget for expenses like upkeep and homeowners insurance.
What is a mortgage rate?
A mortgage rate, also referred to as an interest rate, is the cost your lender assesses for extending you a loan. Each month, your principal (payments on the amount you borrowed) and interest are combined into a single payment.
What is the difference between APR and interest rate?
The interest rate plus expenses like discount points and fees equals the mortgage APR. This figure is higher than the interest rate and more accurately reflects the annual payment you’ll make on your mortgage.
When comparing lenders, you might find one that charges a lower interest rate, leading you to believe that business is the obvious choice because you think that company is the obvious choice. But because it levies high fees, you might discover that the APR is actually higher than what you can get from another lender. In reality, it might not be the best deal.
What is a good mortgage interest rate?
Generally speaking, a good mortgage rate is one that is lower than or equal to the average rate in your state. Your credit score will determine how much this varies; higher scores typically result in lower mortgage rates. Overall, a good mortgage rate will depend on the individual’s financial situation and vary from person to person. Record-low mortgage rates were seen in the US in 2020, and they persisted into 2021. But rates have increased significantly since then.
What is a discount point?
You can choose to pay a fee known as a “discount point” at closing to get a mortgage with a lower interest rate. Typically, one discount point costs 1% of your mortgage and lowers your rate by zero. 25%. So if your rate on a $200,000 mortgage is 3. 3% instead of 5% after spending $4,000 on two discount points.
How do I get a mortgage?
Get your finances in order before applying for a mortgage. Your chances of getting a loan approved will go up if you have a strong financial profile, and you’ll also get a better deal on the interest rate. You can take the following actions to strengthen your finances:
Then, choose a lender by comparing quotes from several of them as you shop around.
How do I compare current mortgage rates?
Obtaining quotes from several lenders is the best way to compare mortgage rates because they are so unique to each borrower. Apply for prequalification and/or preapproval with several lenders if you’re still in the early stages of the home-buying process to compare and contrast what they have to offer.
You can use the tool below to get a broad idea of the rates that might be available to you if you want to do so before speaking with lenders directly.
Note from the Editor: No card issuer has reviewed, approved, or otherwise endorsed any of the opinions, analyses, reviews, or recommendations contained in this article. Read our editorial standards.
Please be aware that while the above offers were correct at the time of publication, they are always subject to change and may now no longer be available.
FAQ
Is 2.8 mortgage interest rate good?
Anything at or below 3% is an excellent mortgage rate. Additionally, the more money you can save over the course of the loan, the lower your mortgage rate must be.
What’s a good interest rate on a mortgage?
Currently, favorable mortgage rates for a 15-year fixed loan typically begin in the 5% to 6% range, while favorable rates for a 30-year loan typically begin in the 7% to 8% range. At the time this was written in Nov. 2022, the average 30-year fixed rate was 6. 61% according to Freddie Mac’s weekly survey.
What is considered a good 30-year mortgage rate?
The national average mortgage rate for a 30-year fixed mortgage is 3%, and the best 30-year mortgage rates are typically below 4%. 86% as of January 2020. However, mortgage rates have gone as low as 3. 32% and as high as 18. 39% in the past.
Is a 2.25 interest rate good?
Whether or not you qualify for 2. 25%, rates are ridiculously low. The truth is that top-tier borrowers with excellent credit scores and 20% down payments almost always receive the lowest advertised rates. So a 2. 25% mortgage rate will be out of reach for many.