Caroline Basile is Forbes Advisor’s student loans and mortgages deputy editor. With experience in both the mortgage industry and as a journalist, she was previously an editor with HousingWire, where she produced daily news and feature stories. She ho.
Caroline Basile Mortgages and Student Loans Deputy EditorCaroline Basile is Forbes Advisor’s student loans and mortgages deputy editor. With experience in both the mortgage industry and as a journalist, she was previously an editor with HousingWire, where she produced daily news and feature stories. She ho.
Written By Caroline Basile Mortgages and Student Loans Deputy EditorCaroline Basile is Forbes Advisor’s student loans and mortgages deputy editor. With experience in both the mortgage industry and as a journalist, she was previously an editor with HousingWire, where she produced daily news and feature stories. She ho.
Caroline Basile Mortgages and Student Loans Deputy EditorCaroline Basile is Forbes Advisor’s student loans and mortgages deputy editor. With experience in both the mortgage industry and as a journalist, she was previously an editor with HousingWire, where she produced daily news and feature stories. She ho.
Mortgages and Student Loans Deputy Editor Jordan Tarver Lead Editor, Mortgages & LoansJordan Tarver has spent seven years covering mortgage, personal loan and business loan content for leading financial publications such as Forbes Advisor. He blends knowledge from his bachelor's degree in business finance, his experience as a top perf.
Jordan Tarver Lead Editor, Mortgages & LoansJordan Tarver has spent seven years covering mortgage, personal loan and business loan content for leading financial publications such as Forbes Advisor. He blends knowledge from his bachelor's degree in business finance, his experience as a top perf.
Jordan Tarver Lead Editor, Mortgages & LoansJordan Tarver has spent seven years covering mortgage, personal loan and business loan content for leading financial publications such as Forbes Advisor. He blends knowledge from his bachelor's degree in business finance, his experience as a top perf.
Jordan Tarver Lead Editor, Mortgages & LoansJordan Tarver has spent seven years covering mortgage, personal loan and business loan content for leading financial publications such as Forbes Advisor. He blends knowledge from his bachelor's degree in business finance, his experience as a top perf.
| Lead Editor, Mortgages & Loans
Updated: Sep 10, 2024, 6:36am
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Mortgage rates can be volatile, making it essential to monitor them closely.
To help you stay informed, Forbes Advisor delivers the latest average weekly and daily rates on the most popular mortgages, empowering you to make the best financial decisions on your home-buying journey.
Here are the average annual percentage rates (APR) today on 30- and 15-year fixed-rate mortgages and 30-year jumbo mortgages:
30-year fixed-rate mortgage:
15-year fixed-rate mortgage:
30-year fixed-rate jumbo mortgage:
The Freddie Mac Primary Mortgage Market Survey (PMMS) reflects rates for first-lien, conventional, conforming purchase mortgages with a loan-to-value (LTV) ratio greater than 75 and less than or equal to 80 and a credit score of at least 740 based on applications from lenders across the country submitted to Freddie Mac when a borrower applies for a mortgage.
Curinos uses its own standardized parameters, such as a $350,000 conventional mortgage loan. Jumbo mortgage rates are based on $750,000 loans. These daily mortgage rate calculations assume an 80% LTV ratio, a credit score of at least 740 and a 60-day lock period.
30-Year Fixed 15-Year Fixed 30-Year Jumbo*Source: Curinos. To determine average mortgage rates, Curinos uses a standardized set of parameters. For conventional mortgages, the calculations are based on an owner-occupied, one-unit property with a loan amount of $350,000. For jumbo mortgages, the loan amount is $750,000. These calculations assume an 80% loan-to-value ratio, a credit score of 740 or higher and a 60-day lock period.
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Mortgage rates took a tumble this summer, hitting their lowest levels in 15 months, which should be welcome news to prospective buyers.
While rates remain elevated, the Federal Reserve signaled it may cut its key interest rate in September, which could mean a further downward shift in mortgage rates as we move through the second half of 2024.
Regardless of which direction mortgage rates head, you’ll want to compare rates and terms among the best mortgage lenders to find a deal that fits your unique situation.
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Mortgages and Student Loans Deputy Editor
When homeowners see that mortgage rates are decreasing, they should call a trusted loan officer to see if a refinance makes sense for them financially. There are so many variables that are in play when a consumer is contemplating a refinance. For instance, there are a lot of consumers out there today who have amassed a decent amount of revolving debt, so even a very small mortgage rate decrease could help them save a lot of money doing a cash-out refinance and consolidating their debt.
If a consumer is just looking to do a rate-and-term refinance and does not have the need to consolidate debt, a good rule of thumb to consider is if the rate is going down at least 0.25% to 0.50%, they should strongly consider a refinance, assuming the points and fees for that type of rate drop are not exorbitant.
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When mortgage interest rates decrease, the first step a consumer should take is to determine how this change may affect their current home-buying experience. Since information is readily available on mobile devices, notifications, online ads, TV, etc. this can cause added anxiety around the process or even a fear of missing an opportunity. An alert over a rate reduction or rate drop for a minimal rate decrease may not be worth changing course or switching an institution (in some cases).
Get the facts and details before making any quick decisions.
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If rates drop and you decide to buy a home, there’s another way to get an even lower interest rate: buying discount points. Mortgage discount points are prepaid interest and can help home buyers reduce their rate by paying up front. Each point typically lowers an interest rate by 0.25 percentage points. For example, purchasing one point would lower a mortgage rate of 6% to 5.75%. The cost of a point is usually 1% of the total mortgage amount.
Mortgages and Student Loans Deputy Editor
If you know how much you’re borrowing, what type of loan you’re getting and how many years you have to pay it back, you can use a mortgage calculator to check your monthly payment at different interest rates.
For instance, if you have a starting loan balance of $425,000 on a 30-year fixed-rate mortgage, here’s approximately what you can expect to pay in principal and interest every month, excluding taxes, mortgage insurance, homeowners insurance and HOA fees:
Though lenders decide your mortgage rate, there are some proactive steps you can take to ensure the best rate possible. For example, advanced preparation and meeting with multiple lenders can go a long way. Even lowering your rate by a few basis points can save you money in the long run.
Here are some other ways you can improve your chances of getting the best deal:
Comparison shopping often leads to finding the lowest rates. To get started, you can compare rates and different lender offerings online. Pay attention to the fine print on the websites to see how those rates are determined. For the most accurate quote, you’ll need to apply for a mortgage through various lenders or go through a mortgage broker.
When applying for a mortgage, you must show that you’re financially stable, so avoid quitting or changing your job—unless it’s for a higher salary—right before or during your application process. Otherwise, lenders may regard your situation as too unstable to afford the monthly payments and deny you a loan. Talk to your lender before making any changes.
Applying for a mortgage on your own is straightforward and most lenders offer online applications, so you don’t have to drive to a physical location. Additionally, applying for multiple mortgages in a short period of time won’t affect your credit score as each application is counted as one query within a 45-day window.
Finally, when you’re comparing rate quotes, be sure to look at the APR, not just the interest rate. The APR reflects the total cost of your loan on an annual basis and any discount points being charged.
Predictions indicate that home prices will remain elevated throughout 2024 while new construction continues to lag behind. This will put buyers in tight housing situations for the foreseeable future.
To cut costs, that could mean some buyers would need to move further away from higher-priced cities into more affordable metros. For others, it could mean downsizing, or foregoing amenities or important contingencies like a home inspection. However, be careful about giving up contingencies because it could cost more in the long run if the house has major problems not fixed by the seller upon inspection.
Another important consideration in this market is determining how long you plan to stay in the home. People buying their “forever home” have less to fear if the market reverses as they can ride the wave of ups and downs. But buyers who plan on moving in a few years are in a riskier position if the market plummets. That’s why it’s so important to shop at the outset for a realtor and lender who are experienced housing experts in your market of interest and who you trust to give sound advice.
The interest rate is the cost of borrowing money whereas the APR is the yearly cost of borrowing as well as the lender fees and other expenses associated with getting a mortgage. The APR is the total cost of your loan, which is the best number to look at when you’re comparing rate quotes. Some lenders might offer a lower interest rate but their fees are higher than other lenders (with higher rates and lower fees), so you’ll want to compare APR, not just the interest rate. In some cases, the fees can be high enough to cancel out the savings of a low rate.
No one knows when mortgage rates will go down. In their September 2023 meeting, members of the U.S. Federal Reserve’s Federal Open Market Committee projected that the federal funds rate—which indirectly affects mortgage rates—might fall from a median rate of 5.6% in 2023 to 5.1% in 2024, 3.9% in 2025 and 2.9% in 2026. But these predictions are based on assumptions that may or may not pan out. However, the Federal Reserve has indicated it will begin cutting rates in 2024 as the economy cools and inflation continues to fall. Assuming these trends hold steady, you can expect to see lower mortgage rates in 2024.
Mortgage rates are so high due to a number of economic factors. Supply chain shortages related to the pandemic and Russia’s war on Ukraine caused inflation to shoot up in 2021 and 2022. A resilient economy and robust job market also drive inflation higher and increase demand for mortgages. When inflation increases, the U.S. Federal Reserve raises its interest rate target for overnight lending between banks, and interest rates throughout the financial sector typically follow suit. From March 2022 to July 2023, the Fed raised its policy rate 11 times, leading to a surge in mortgage rates. A change in demand for 10-year Treasury bonds and mortgage-backed securities also contributed to 2023’s higher rates. However, the Federal Reserve has indicated it will begin cutting rates in 2024 as the economy cools and inflation continues to fall. Assuming these trends hold steady, you can expect to see lower mortgage rates in 2024.
When you receive a mortgage loan offer, a lender will usually ask if you want to lock in the rate for a period of time or float the rate. If you lock it in, the rate should be preserved as long as your loan closes before the lock expires. If you don’t lock in right away, a mortgage lender might give you a period of time—such as 30 days—to request a lock, or you might be able to wait until just before closing on the home. Once you find a rate that is an ideal fit for your budget, it’s best to lock in the rate as soon as possible, especially when mortgage rates are predicted to increase. While it’s not certain whether a rate will go up or down between weeks, it can sometimes take several weeks to months to close your loan. If you don’t lock in your rate, rising interest rates could force you to make a higher down payment or pay points on your closing agreement in order to lower your interest rate costs.
Talk with your lender about what timelines they offer to lock in a rate as some will have varying deadlines. An interest rate lock agreement will include: the rate, the type of loan (such as a 30-year, fixed-rate mortgage), the date the lock will expire and any points you might be paying toward the loan. The lender might tell you these terms over the phone, but it’s wise to get it in writing as well.
First, start by comparing rates. You can check rates online or call lenders to get their current average rates. You’ll also want to compare lender fees, as some lenders charge more than others to process your loan. Thousands of mortgage lenders are competing for your business. So to make sure you get the best mortgage rates is to apply with at least three lenders and see which offers you the lowest rate. Each lender is required to give you a loan estimate. This three-page standardized document will show you the loan’s interest rate and closing costs, along with other key details such as how much the loan will cost you in the first five years.
Mortgage points represent a percentage of an underlying loan amount—one point equals 1% of the loan amount. Mortgage points are a way for the borrower to lower their interest rate on the mortgage by buying points down when they’re initially offered the mortgage. For example, by paying upfront 1% of the total interest to be charged over the life of a loan, borrowers can typically unlock mortgage rates that are about 0.25% lower. It’s important to understand that buying points does not help you build equity in a property—you simply save money on interest.
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