Current mortgage rates 2024
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Updated 9:54 a.m. ET Nov. 14, 2024
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The average 30-year fixed mortgage rate has been elevated for a couple of years, reaching a recent high of 7.79% in October 2023. Since then, mortgage rates have trended downward with periodic spikes in response to economic news. If you’re looking to buy a home, refinance a mortgage or take out a home equity loan, it’s a good idea to monitor rates closely.
Mortgage trends for 2024
Here are the current mortgage interest rates and their projected course for the rest of the year.
As of November 13, the average annual percentage rate (APR) for a 30-year fixed mortgage is 7.33%. This is up from 6.96% the month prior and significantly higher than the 5.8% rate we saw at the end of 2022.
The average APR of a 15-year, fixed-rate mortgage is 6.42% — up from 6.10% the month before. This is a decrease from last year's 7.06%.
See more: Best mortgage lenders
Fixed-rate mortgages
The most common type of mortgage is a fixed-rate mortgage, with roughly 90% of borrowers choosing a 30-year term. A 15-year, fixed-rate mortgage is another option for borrowers — here is how the two compare:
- 30-year fixed-rate mortgage: This is a stable, long-term home loan that typically provides the advantage of lower monthly payments compared to a shorter term. This is because you’re paying off your loan over a more extended period — in this case, 360 months.
- 15-year fixed-rate mortgage: This home loan functions the same way as the 30-year fixed-rate mortgage but for half the term. As a result, your monthly payments will be higher. But because you’ll be paying off the loan sooner, you’ll typically save money on interest over the life of the loan. Additionally, interest rates on 15-year mortgages are usually lower than 30-year mortgage rates.
What is an adjustable-rate mortgage (ARM)?
An ARM is a type of mortgage where you pay a fixed rate during an initial phase. Afterward, you’ll enter an adjustable-rate period for the remaining duration of the loan.
ARM interest rates are usually lower than conventional fixed rates. If you’re only looking to own your home for a short time or conventional mortgage interest rates are high, then an ARM may be a good option. However, ARMs aren’t right for everyone.
Generally, the shorter the fixed term, the lower the introductory interest rate when it comes to ARMs. Here are some popular ARM types:
- 5/1 ARM: Probably the most popular ARM, a 5/1 ARM has a fixed rate for five years, and then your rate will adjust once annually for the life of the loan.
- 7/1 ARM: A 7/1 ARM has a fixed rate for the first seven years, and then your rate will adjust once annually for the life of the loan.
- 10/1 ARM: A 10/1 ARM has a fixed rate for the first 10 years, and then your rate will adjust once annually for the life of the loan
Compare current mortgage rates
Our forecast for 2024
In its August 2024 Housing Forecast, Fannie Mae predicts conventional 30-year mortgage interest rates will remain near the current quarterly average of 6.6%. The mortgage firm predicts rates will dip slightly in the fourth quarter of 2024 with a 6.4% average.
Fannie Mae projects average 30-year rates will reach 5.9% by the end of 2025. This might happen if the Federal Reserve cuts the federal funds rate, which financial experts project to happen in late 2024. The Fed’s decision depends on whether inflation will slow and the health of the overall economy.
“Despite the lack of progress on inflation, the Fed’s decision to slow the pace of decline of its securities holdings helped to pull Treasury yields — which mortgage rates tend to follow — lower,” says Orphe Divounguy, a senior economist at Zillow. “While there is no guarantee that mortgage rates will move lower, it does at least mean less upward pressure.”
Our mortgage interest rate forecast provides more insights about which way rates might move.
How to shop for mortgage rates
The first thing you should do before shopping for rates is check your credit score. Experts advise improving your credit score as much as possible beforehand since the better your score, the more likely it is that you’ll qualify for a lower rate.
Along with getting your credit in order, here are the other steps you should take before getting a mortgage:
- Save money for a down payment. The more you can put down on a home, the lower your LTV ratio, which compares your loan size to the value of your home. A low LTV ratio puts you in a better position to get a better rate since lenders will view you as less of a risk. In general, lenders typically view 80% (which is what you’ll have with a 20% down payment) as a good LTV ratio.
- Compare rates from multiple lenders. Don’t just accept the rate of the first lender you check out. Shop around online, by phone or in person directly at banks and credit unions, and compare multiple lenders for the best deal.
- Get prequalified and preapproved. A mortgage prequalification estimates how much of a mortgage you can afford, taking into account only a small sample of data you provide. During the preapproval process, however, a lender takes a deeper dive into your finances and credit history. The result is a preapproval letter that documents the actual amount the lender is willing to loan you. When you’re ready to take that next step, getting preapproved — and having a preapproval letter to show the seller — is a good idea.
Working with an experienced mortgage broker may also put you at an advantage for a better rate as they can help expedite updates to your credit score, says Rinaldi. “Also, brokers have the flexibility to work with different lenders depending on the client’s needs.
– Stephen Rinaldi, a licensed mortgage broker and president of the Rinaldi Group LLC
How to get the best rate on your new home
Here are some strategies to help you qualify for the lowest mortgage rate:
- Compare multiple lenders. Rates and fees vary by institution, so it’s worth the effort to get quotes from several of the best mortgage lenders.
- Consider conventional and government-backed loans. Mortgage rates differ with each loan type. Consider getting quotes for any program you might qualify for, such as conventional, FHA and VA loans.
- Make a larger down payment. A minimum 20% down payment can help you avoid private mortgage insurance on conventional loans. The VA funding fee and FHA mortgage insurance premiums are contingent on the down payment amount, too. Putting down at least 10% for either program helps you qualify for the lowest costs.
- Pay closing costs upfront. Lenders might offer a no-closing-cost mortgage in exchange for a higher interest rate as you repay eligible expenses over the life of the loan. First-time homebuyer loans might apply funds toward the down payment, closing costs or interest rate buydowns.
- Improve your credit. Higher credit scores — usually 740 and up — can help you get the best mortgage rate. There are several ways to improve your credit score and attain good credit.
What determines your mortgage rate?
Several factors influence your mortgage interest rate, starting with the Federal Reserve’s monetary policies. The Fed controls a benchmark interest rate called the federal funds rate, which in turn influences mortgage rates. Other economic factors can cause mortgage rates to fluctuate daily and even by the hour. While you can’t control what happens in the broader economy, you can improve your mortgage rate by focusing on these personal details:
- Credit score: The minimum credit score for a mortgage varies by loan type and lender. Applicants with a credit score in the 700s or 800s, for example, usually qualify for a better rate than borrowers with a credit score below 620.
- Mortgage type: Interest rates vary by loan type, such as conventional, FHA, VA and USDA home loans. Further, rates differ between fixed-rate and adjustable-rate mortgages (ARM).
- Loan term: Mortgages with shorter terms tend to come with lower rates than a 30-year mortgage, but they come with a bigger monthly payment. A 15-year fixed-rate mortgage can balance competitive rates with affordable monthly payments.
- Down payment: A larger down payment can lower your interest rate because it reduces risk for the lender. A smaller loan principal also results in a more affordable down payment.
- Discount points: Buying discount points allows you to lower your interest rate and save on the monthly payment. You’ll need to come up with the funds to pay for the points, which may deplete your down payment.
When to consider refinancing your mortgage
A mortgage refinance can be a good option if it helps you better afford the loan payments, either by qualifying for a lower interest rate, by extending your loan term or by converting to a different loan type. Homeowners often do this when:
- Their credit score improves.
- They want to transfer an adjustable-rate mortgage to a fixed-rate loan.
- They want to convert an FHA loan to a conventional loan to remove mortgage insurance.
You might also consider a cash-out refinance to tap your home equity, though most lenders want you to retain at least 20% equity after the refinance.
Refinances come with closing costs that average $5,000, so you’ll need to check your “breakeven point” to see if those costs are worthwhile. For instance, if you pay $5,000 to save $200 a month, it will take a little more than two years to recoup your costs. If you plan to stay in your home beyond that point, you might consider this strategy.
Mortgage refinance rates vary by lender and loan type. Rate-and-term refinances have lower rates than cash-out mortgage refinances because you’re not borrowing from your equity.
Frequently asked questions (FAQs)
Fannie Mae predicts mortgage rates will continue to drop through the rest of 2024 and won’t start picking back up until later in 2025.
Your mortgage servicer might increase the escrow amounts due for homeowners insurance and property taxes. These are variable costs that may be baked into your mortgage payment. But your principal-and-interest payment amount won’t change unless you refinance or pay off the loan.
Applying with a higher credit score, reducing your debt-to-income (DTI) ratio and making a sizable down payment are some of the easiest ways to qualify for a lower rate.
Negotiating fees and comparing several mortgage lenders is helpful, too. For example, you might reduce lender fees or third-party fees, qualify for banking relationship discounts and potentially receive a rate match guarantee after receiving similar offers.
Mortgage points, sometimes called discount points, involve paying an upfront fee to reduce the interest rate. Typically, a single point costs 1% of the purchase price in exchange for a 0.25% interest rate discount.
A rate lock can provide peace of mind and financial security when mortgage rates are rising. It’s also helpful when your closing might take longer, such as if you have a construction loan or a complicated loan situation.
Many lenders offer a complimentary rate lock period of up to 30 days and potentially up to 60 days. It typically takes between 30 and 45 days to close on most purchase and refinance applications.
However, the rate lock extension might not be worth the fee when you anticipate a quick closing or for rates to remain flat or trend lower.
Mortgage closing costs are typically 2% to 5% of the loan amount. As it can be challenging to pay these expenses in full at closing, the lender might roll the closing costs into principal for a higher loan amount. This option results in a higher monthly payment.
Additionally, you might qualify for homeownership grants, and it’s also possible to negotiate lender fees or swap third-party providers to save money.
It depends on the type of mortgage loan you get. USDA loans and VA loans come with no down payment for eligible borrowers, while some conventional loans only require a down payment of 3%. Just keep in mind, if you put down less than 20% on a conventional loan, you’ll typically need to pay for private mortgage insurance.
You might also qualify for down payment assistance programs to lower your upfront homebuying costs.
Editor’s Note: This article contains updated information from previously published stories:
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial or medical decisions. Individual results may vary. Past performance is not indicative of future results.
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