Looking for the most up-to-date mortgage rates to empower your purchasing or refinancing decisions? We’ve got you covered.
Here, you can view today’s mortgage interest rates, updated daily according to data from Bankrate, so you can have the most current data when purchasing or refinancing your home.
30-year fixed rate mortgages
The average mortgage interest rate for a standard 30-year fixed mortgage is 6.98%, an increase of 0.10 percentage points from last week’s 6.88%.
Thirty-year fixed mortgages are the most commonly sought out loan term. A 30-year fixed rate mortgage has a lower monthly payment than a 15-year one, but usually has a higher interest rate.
15-year fixed rate mortgages
The average mortgage interest rate for a standard 15-year fixed mortgage is 6.47%, an increase of 0.06 percentage points from last week’s 6.41%.
Fifteen-year fixed rate mortgages come with a higher monthly payment compared to its 30-year counterpart. However, usually interest rates are lower and you will pay less total interest because you are paying off your loan at a faster rate.
5/1 adjustable rate mortgages
The average rate on a 5/1 adjustable rate mortgage (ARM) is 6.51%, an increase of 0.13 percentage points from last week’s 6.38%. With an ARM, you will most often get a lower interest rate than a fixed mortgage for say, the first five years.
But you could end up paying more or less after that time depending on your loan terms and how that rate follows the market.
What is the best term for a loan?
When picking a mortgage, it is important to pick out a loan term or payment schedule. Usually you will be offered a 15 or 30-year loan term, but it is not uncommon to see 10, 20, or 40-year mortgages, according to CNET.
Mortgages can be fixed-rate or adjustable-rate. Interest rates in fixed-rate mortgages are set in stone for the duration of the loan.
Adjustable-rate mortgages only have interest rates set for a certain period of time before the rate adjusts annually based on the market.
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Katherine Rodriguez can be reached at [email protected]. Have a tip? Tell us at nj.com/tips.
In a recent report by Goldman Sachs, a stark warning was issued about the state of office mortgages in the United States, describing them as “living on borrowed time.” This caution comes amidst a backdrop of mounting stress in commercial real estate loans, particularly those tied to office properties, which have emerged as a significant sore point. With delinquencies on the rise, the specter of financial instability continues to haunt the U.S. banking sector, further aggravated by an office market that has seen demand plummet for two consecutive years.
The situation has become increasingly dire, with delinquencies ticking upwards, reflecting the ongoing distress within the office real estate sector. According to Trepp, a leading research firm, about 6.63 percent of all commercial office mortgages were delinquent as of February, marking a 33 basis points increase from January. This rise mirrors the average monthly increase witnessed over the past 12 months, starkly contrasting with the 2.38 percent delinquency rate recorded a year prior. The upsurge in delinquencies underscores an ominous trend in the office market, plagued by declining demand and reaching a vacancy rate of 19.7 percent at the onset of 2024.
A particularly alarming development is the significant increase in commercial real estate loans scheduled to mature by the end of 2024. The total amount has surged 41 percent to over $900 billion, primarily fueled by ongoing extensions and modifications of existing debts. This uptick, noted by analysts at Goldman Sachs, signifies a potentially tumultuous period ahead for the banking sector, already reeling from the impact of higher interest rates and declining property values that have complicated refinancing efforts.
Regional banks have acutely felt the ripple effects of the commercial real estate loan challenges, which have seen their stock prices wobble in the wake of last year’s string of bank failures. Given their exposure to commercial real estate loans, these institutions are particularly vulnerable, a situation exacerbated by the current economic climate marked by high interest rates and a depreciation in property values.
Despite the grim outlook for office loans, the broader commercial real estate market shows signs of resilience. In its assessment, Goldman Sachs noted that the office sector’s distress is unlikely to spill over into other areas of the commercial property market. Retail delinquencies, for instance, have shown improvement, and the multifamily and industrial sectors remain relatively stable. Furthermore, banks today are in a more robust capital position than during the financial crises of 2008-09 and the 1980s, offering hope that the current challenges can be navigated with strategic foresight and prudent management.
The office mortgage crisis presents a daunting challenge to the U.S. banking sector, underscored by a confluence of increasing delinquencies, a glut of maturing loans, and a commercial office market in distress.
LOS ANGELES — The average long-term U.S. mortgage rate climbed back to nearly 7% this week, pushing up borrowing costs for home shoppers.
The average rate on a 30-year mortgage rose last week from 6.74% to 6.87%, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.42%. The average rate is now just below where it was two weeks ago.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also rose this week, pushing the average rate last week from 6.16% to 6.21% . A year ago it averaged 5.68%, Freddie Mac said.
When mortgage rates rise, they can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford in a market already out of reach for many Americans.
“After decreasing for a couple of weeks, mortgage rates are once again on the upswing,” said Sam Khater, Freddie Mac’s chief economist.
Investors’ expectations for future inflation, global demand for U.S. Treasurys and what the Federal Reserve does with its short-term interest rate can influence rates on home loans.
After climbing to a 23-year high of 7.79% in October, the average rate on a 30-year mortgage has remained below 7% since early December. Rates eased amid expectations that inflation was cooling enough for the Fed to begin lowering its short-term interest rate by this spring. But a spate of stronger-than-expected reports on inflation, the job market and the economy in recent weeks dimmed that outlook, sending mortgage rates higher through most of February.
Many economists expect that mortgage rates will ultimately ease moderately this year, but that’s not likely to happen before the Federal Reserve begins cutting its benchmark interest rate. On Wednesday, the central bank kept its rate unchanged and signaled again that it expects to make three rate cuts this year, but not before it sees more evidence that inflation is slowing.
“The Fed’s announcement that it is holding interest rates steady for now was not unexpected, but it does mean that mortgage rates are going to remain higher for longer,” said Lisa Sturtevant, chief economist at Bright MLS.
The U.S. housing market is coming off a deep, 2-year sales slump triggered by a sharp rise in mortgage rates and a dearth of homes on the market. The overall decline in rates since their peak last fall has helped lower monthly mortgage payments, providing more financial breathing room for homebuyers facing rising prices and a shortage of homes for sale this year.
Sales of previously owned U.S. homes rose in February from the previous month to the strongest pace in a year. That followed a month-to-month home sales increase in January.
Still, the average rate on a 30-year mortgage remains well above where it was just two years ago at 4.42%. That large gap between rates now and then has helped limit the number of previously owned homes on the market by discouraging homeowners who locked in rock-bottom rates from selling.
Borrowers hoping for some quick relief were left disappointed this week after the Federal Reserve elected to keep interest rates paused. While the benchmark interest rate range will stay the same between 5.25% and 5.50% — a 23-year high — there were indications that rate cuts could come later this year and into 2025. Against this backdrop, borrowers should remain judicious about how they access credit and which credit forms they use.
Homeowners, for example, have a great resource at their disposal: their home equity. Considering that the average homeowner has around $200,000 to utilize in today’s market, right now may be a great time to do so, even with elevated interest rates on pause. Below, we’ll break down three reasons why you should get a home equity loan now.
Start by seeing what home equity loan rate you could qualify for here.
Why you should get a home equity loan with interest rates paused
Here are three compelling reasons why homeowners should get a home equity loan or home equity line of credit (HELOC) with rates frozen.
Rates will stay where they are (for now)
An interest rate pause is still better than an interest rate hike, particularly for those considering accessing their home equity. The average home equity loan interest rate as of Thursday was 8.59% while the average HELOC was 8.99%. And that’s after the Fed’s announcement, meaning that the repercussions of keeping rates the same have likely been accounted for — and rates are still under 9%.
And if hints of a rate cut become more substantive in the weeks to come, rates on both borrowing products may drop lower. This gives borrowers some more flexibility and an extended window of opportunity to find the best lender for their needs (homeowners don’t need to use their current home loan lender if they don’t want to).
Start shopping for home equity loans online now.
Rates are still lower than popular alternatives
Have you looked at the interest rates on other popular credit alternatives lately? Credit card interest rates are around 20% right now while the average personal loan interest rate is better, but still around 12%, for borrowers. Both are significantly higher than what home equity and HELOC lenders will offer right now — and neither comes with the interest tax deductions if used for eligible home repairs and renovations. And with interest rates on pause, the rate climate is likely to remain as is, at least until the Fed meets again at the end of April.
Your rate could drop later this year
While home equity loan rates are fixed and will require refinancing to secure a lower rate, HELOC rates are not. As such, if you take out a HELOC this spring and rates drop fall later in the season, the payment you’ll need to make on the line of credit will fall in tandem. This could result in immediate savings back to you.
“This is simply an interest rate question,” Mark Charnet, founder and CEO of American Prosperity Group, a financial planning firm, recently told CBS News. “If the borrower feels rates will fall in the short-term, a HELOC, which normally adjusts the interest rate monthly, may be a better opportunity.”
Explore your HELOC options to learn more.
The bottom line
With interest rates on pause — and cuts likely for later in the year — now is an opportune time for homeowners to tap into their home equity. By doing so now they can still get a relatively low rate and save money versus using alternatives with much higher rates. And if they use a HELOC over a home equity loan, owners can position themselves for further savings due to the HELOC’s variable rate nature. As is the case when considering home equity borrowing, however, owners should thoroughly consider all options as their home will be used as collateral. If they can’t adequately pay back what they borrow, then they could risk losing their home in the transaction.
Matt Richardson
Matt Richardson is the managing editor for the Managing Your Money section for CBSNews.com. He writes and edits content about personal finance ranging from savings to investing to insurance.
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What a difference a month makes: Economists at Fannie Mae no longer expect mortgage rates to fall below 6 percent this year or next and believe that “dual affordability constraints” of high home prices and mortgage rates will also keep 2024 home sales from hitting a previously forecast 5 million mark.
Last month, Fannie Mae’s eight-member forecasting team was projecting that rates on 30-year fixed-rate mortgages would drop to an average of 5.9 percent by the final three months of the year and that sales of new and existing homes would total 5.0 million.
In their latest monthly housing forecast Tuesday, Fannie Mae’s Economic and Strategic Research (ESR) Group projected mortgage rates will average 6.4 percent during Q4. While 4.91 million homes are expected to change hands this year, deals will be driven primarily by households that can no longer put off moves due to life events.
Doug Duncan
“The housing market is likely to continue to face the dual affordability constraints of high home prices and elevated interest rates in 2024,” Fannie Mae Chief Economist Doug Duncan said in a statement. “Hotter-than-expected inflation data and strong payroll numbers are likely to apply more upward pressure to mortgage rates this year than we’d previously forecast, as markets continue to evolve their expectations of future monetary policy.”
Even if mortgage rates stay elevated, sales of new and existing homes are expected to be stronger than last year, although the projected rebound isn’t quite as strong as Fannie Mae had forecast last month.
“We believe an increasing number of transactions will be driven by households who can no longer put off their moves simply due to interest rate lock-in effects because they need to move for life event reasons,” Fannie Mae economists said in commentary accompanying their latest forecast.
Weaker rebound in 2024 home sales projected
Source: Fannie Mae housing forecast, March 2024.
Sales of existing homes, which make up the bulk of most real estate agents’ businesses, are now projected to grow by only 3 percent in 2024, to 4.21 million. That’s about 47,000 fewer existing home sales than forecast in February.
Sales of new homes are expected to grow by close to 5 percent this year, to 699,000, which is down 35,000 from last month’s forecast for 734,00 new home sales in 2024.
“While existing sales rose 3.1 percent in January to an annualized pace of 4.0 million, these increases reflected mortgage rates in November and December,” Fannie Mae economists noted. “Pending sales, which lead closings on average by a month or two, fell in January by 4.9 percent, pointing to a likely pullback in February.”
Diminished expectations for lower mortgage rates
Source: Fannie Mae housing forecast, March 2024.
Last month, Fannie Mae forecasters were predicting that rates on 30-year fixed-rate mortgages would fall to 5.9 percent in Q4 2024 and 5.7 percent in Q4 2025. The latest forecast is that rates will make a more gradual descent to 6.0 percent by Q4 2025.
“Strong headline jobs numbers and hotter-than-expected inflation data … led financial markets to price in a less aggressive rate-cutting path by the Federal Reserve,” Fannie Mae economists said in predicting that mortgage rates have less room to come down than previously thought.
While economists with the Mortgage Bankers Association predicted in February that mortgage rates would drop to 5.5 percent by Q4 2025, their March forecast hadn’t been issued Tuesday.
This year’s rally in mortgage rates kicked off with a surprisingly strong jobs report on Feb. 2, which put to rest speculation that the Federal Reserve might begin lowering the short-term federal funds rate in March.
Purchase mortgage applications fell for five consecutive weeks before mortgage rates began to ease again in early March. But more recent inflation data has been pushing mortgage rates higher again since March 11.
The CME FedWatch Tool, which tracks futures market investors’ expectations of the Fed’s next moves, on Tuesday put the odds that the Fed will approve one or more rate cuts by June 12 at just 59.5 percent, down from 76.2 percent on Feb. 16.
But it’s not just when the Fed starts cutting short-term rates, but how deeply it might cut over the next two or three years that’s of importance to investors who fund most mortgages.
“In our view, whether the Fed begins cutting interest rates in June or later in the year is likely to have only a small impact on the macroeconomy and mortgage rates,” Fannie Mae economists said. “In contrast, we believe the market’s expectations of the cumulative change in the fed funds rate over the next two to three years will likely have a more meaningful impact on mortgage rates.”
Unlike the short-term federal funds rate, the Fed doesn’t have direct control over mortgage rates, which are determined largely by investor demand for mortgage-backed securities (MBS). But having purchased trillions of dollars in MBS and Treasurys to keep interest rates low during the pandemic, the Fed does have influence in MBS markets that determine mortgage rates.
“Quantitative tightening” — the Federal Reserve’s ongoing program to trim $35 billion in mortgages from its balance sheet each month — could keep mortgage rates from falling dramatically this year.
When Fed policymakers meet Wednesday, they’re expected to keep their target for the short-term federal funds rate at 5.25 percent to 5.50 percent. But Fannie Mae economists say bond market investors are expecting some discussion of the quantitative tightening policy, which Federal Reserve Governor Christopher Waller has said is falling short of expectations.
In a March 1 speech, Waller said he’d like to see the Fed reduce its $2.4 trillion in mortgage holdings to zero. But because few homeowners have an incentive to refinance their existing loans, the Fed has been falling short of its target of reducing its MBS holdings by $35 billion a month.
Rather than actively selling MBS, the Fed has been letting those investments roll off its balance sheet passively, by not replacing assets that mature. But that strategy has only been trimming the Fed’s MBS balance sheet by about $15 billion a month.
To hit the $35 billion a month target, the Fed would have to start selling MBS. Even the threat of such a move might push mortgage rates higher, prompting real estate industry groups to plead with the Fed in October to go on record that it would not sell mortgages the central bank bought during the pandemic.
Refinancing projected to bounce back from anemic levels
Source: Fannie Mae housing forecast, March 2024.
With home prices expected to stay elevated, purchase mortgage originations are expected to post 12 percent growth this year, to $1.367 trillion, a downgrade of $90 billion from last month’s forecast, followed by 13.5 percent growth in 2025, to $1.551 trillion.
“We have downgraded our outlook for purchase originations due to downgrades to the home sales forecast (which in turn stems from a higher mortgage rate outlook), as well as incoming data indicating a continued higher cash share of purchase transactions occurring,” Fannie Mae economists said.
Refinancings are projected to grow 60 percent this year from last year’s anemic levels, to $397 billion, or $62 billion less than forecast in February. Next year Fannie Mae is forecasting another 58 percent increase in refinancing volume, to $626 billion, as lower rates give more homeowners an incentive to refinance.
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Looking for the most up-to-date mortgage rates to empower your purchasing or refinancing decisions? We’ve got you covered.
Here, you can view today’s mortgage interest rates, updated daily according to data from Bankrate, so you can have the most current data when purchasing or refinancing your home.
30-year fixed rate mortgages
The average mortgage interest rate for a standard 30-year fixed mortgage is 6.99%, an increase of 0.13 percentage points from last week’s 6.86%.
Thirty-year fixed mortgages are the most commonly sought out loan term. A 30-year fixed rate mortgage has a lower monthly payment than a 15-year one, but usually has a higher interest rate.
15-year fixed rate mortgages
The average mortgage interest rate for a standard 15-year fixed mortgage is 6.46%, an increase of 0.06 percentage points from last week’s 6.40%.
Fifteen-year fixed rate mortgages come with a higher monthly payment compared to its 30-year counterpart. However, usually interest rates are lower and you will pay less total interest because you are paying off your loan at a faster rate.
5/1 adjustable rate mortgages
The average rate on a 5/1 adjustable rate mortgage (ARM) is 6.36%, an increase of 0.16 percentage points from last week’s 6.20%. With an ARM, you will most often get a lower interest rate than a fixed mortgage for say, the first five years.
But you could end up paying more or less after that time depending on your loan terms and how that rate follows the market.
What is the best term for a loan?
When picking a mortgage, it is important to pick out a loan term or payment schedule. Usually you will be offered a 15 or 30-year loan term, but it is not uncommon to see 10, 20, or 40-year mortgages, according to CNET.
Mortgages can be fixed-rate or adjustable-rate. Interest rates in fixed-rate mortgages are set in stone for the duration of the loan.
Adjustable-rate mortgages only have interest rates set for a certain period of time before the rate adjusts annually based on the market.
Our journalism needs your support. Please subscribe today to NJ.com.
Katherine Rodriguez can be reached at [email protected]. Have a tip? Tell us at nj.com/tips.
Mortgage delinquencies improved again in February as prepayment activity increased moderately.
The national delinquency rate eased to 3.34% in February, down from 3.38% in January, according to an Intercontinental Exchange (ICE) mortgage performance report released Thursday. February’s rate was also 11 basis points lower than it was a year ago.
In February, serious delinquencies (loans 90 or more days past due) were down month over month, with 11,000 fewer loans in that category and a total of 459,000 loans affected. On a yearly basis, the rate of serious delinquencies was 18% below the February 2023 rate of 562,000 loans.
Meanwhile, early-stage delinquencies (30 to 60 days past due) decreased month over month and year over year. In February, roughly 1.782 million loans were at least 30 days overdue.
On the other hand, foreclosure starts marked a 27.7% month-over-month decrease to 25,000, the second lowest rate in the past year. Meanwhile, the active foreclosure inventory fell to 211,000 homes, shedding 7,000 units since January. Likewise, the 6,000 completed foreclosure sales last month were down 9.5% compared to January.
Prepayment activity rose 3 basis points in February to a level not seen since October 2023. A brief dip in mortgage rates spurred an uptick in purchase and refinance demand.
The five states with the highest delinquency rates were Mississippi, Louisiana, Alabama, Arkansas and Indiana. At the other end of the spectrum, Montana, California, Idaho, Washington and Colorado were the states with the lowest delinquency rates.
Opportunities have emerged as a result on the hotel side. “It’s less crowded. Fewer investors are chasing hotels versus some of the other property types like multifamily and industrial, just as interest rates have continued to stay higher for longer,” Friedman said. Over $1 trillion of loans are slated to mature between now and the … [Read more…]
In some popular budgets, 30% of your take-home pay goes toward the wants in life. So if you are wondering how to enjoy life when you have student loans, some of those funds can go to dining out, travel, and more. While student loans can eat up a portion of your disposable income, with smart budgeting, you can have some fun money available as you make your payments.
Read on for advice on how much money to earmark for fun when you’re focused on paying off what you borrowed for your education. Student debt, after all, is a phase of your life that you are moving through, and you can indeed find ways to live life while paying off student loans..
The Impact of Student Loan Debt
Yes, student loans can require time and effort to pay off. Many Americans are working their way through their payments. In fact, in one recent survey, the College Board found that 54% of undergraduate students at four-year institutions graduated with student loan debt. In other words, you are not alone.
Having that debt hanging over you can have an emotional impact in addition to affecting your finances. Student loan debt can result in higher levels of mental health issues; it can possibly contribute to money stress or feelings of depression.
That in turn can put strain on other aspects of life. It might, for instance, lead a borrower to delay life decisions, such as getting married or starting a family.
But having student loans on your plate can have a silver lining. That debt can encourage you to build positive financial habits as you work through your payments. You can learn how to budget efficiently. You can learn resilience and how to work through paying off debt. Consider it good practice for when you might have a car loan or a mortgage in the future. 💡 Quick Tip: Get flexible terms and competitive rates when you refinance your student loan with SoFi.
How Much Money to Allocate for Fun
As you look at your budget when paying off student loans, you might wonder, “What’s the right amount of money to allocate for fun?”
There’s no “right” or “correct” amount. Funds that you allocate toward fun (whether that means buying new clothes you don’t need, snapping up some concert tickets, or spending a long weekend at the beach) will need to work within your budget. Given that you are allocating a percentage of income toward student loans, here’s how to figure that out.
10% Rule
The 10% Rule refers to allocating 10% of your monthly income after taxes toward fun. For example, if you make $3,000 per month after taxes, you’d allocate $300 toward fun each month. You can use that amount guilt-free, whether you want to put it toward hobbies or dining out.
50/30/20 Rule
The 50/30/20 rule could also help you budget when you’re paying off student loans. Here’s how it works; you would allocate your take-home pay as follows:
• 50% essential expenses: Essential expenses refer to the cost of housing, food (groceries, not going out to brunch with friends), healthcare, and the like, as well as minimum debt payments, such as what you owe per month for your student loans, credit card, and car loan, if you have one.
• 30% discretionary expenses: Discretionary expenses include items that aren’t as essential, including dining out (like the above-mentioned brunch), personal care (spa days, training sessions), non-essential clothes, travel expenses, etc.
• 20% for savings and additional debt payments: You can think of these as putting money toward your short- and long-term goals. They can include savings, investments, or a child’s education. Or making additional payments toward you student debt to pay it off that much faster.
70/20/10 Rule
Another type of rule, the 70/20/10 rule, may seem just like the 50/30/20 rule, which it is — just with different allocation percentages. This rule means you divide your take-home pay as follows:
• 70% goes toward needs and wants.
• 20% goes toward debt repayment and short-term savings.
• 10% goes toward investing and donations.
You would figure out how much of that 70% you can allocate for fun to make this budget work for you.
Budgeting as a Couple
If you have a partner, you will have to decide how to budget your funds. Some couples keep their money separate, while others pool their resources. You may be in a situation where one person earns more than the other, or perhaps one is still in school. One or both of you may have student debt in a marriage. It can take some discussion and experimentation with different budget systems to decide how to divide your money up to cover:
• Essential expenses
• Discretionary expenses
• Goals
• Debt payoff
• Savings (whether for the down payment on a house, an emergency fund, or other goal).
💡 Quick Tip: It might be beneficial to look for a refinancing lender that offers extras. SoFi members, for instance, can qualify for rate discounts and have access to career services, financial advisors, networking events, and more — at no extra cost.
Choose Your Fun
Fun money should be intentional and focused. There’s no rule on how to live life while paying off student loans, so consider what would bring you joy. Would it be knowing you can go out to dinner once or twice a month? Being able to buy a new mountain bike? Becoming a member at your favorite local museum?
A quick reminder: Not that there’s anything wrong with saving for a crazy weekend in Vegas, but you don’t need to spend thousands to have fun. Don’t forget to also find low-cost fun with family and friends through free local concerts, movie nights at home, strolls through the local farmers’ market or sunset walks at a local park, potluck dinners, and similar activities. Making your own fun can be a free or cheap way to stretch your budget while paying off your student loans.
Monthly Budget Example
Here’s a quick example of a simple monthly budget. Say your take-home pay is $6,000 a month , and these are some basic expenses:
• Mortgage: $2,000
• Property taxes: $500
• Credit card debt: $500
• Food: $300
• Car loan: $300
• Student loans: $250
• Transportation (gas, etc.): $100
• Utilities: $260
• Healthcare: $300
• Retirement savings: $200
• Emergency fund savings: $200
• College savings for your child: $200
• After-school childcare: $500
Total expenses: $5,610
If you have allocated the amounts needed in the 50/30/20 budget rule, for example, then you would subtract $5,510 from $6,000, and you have $490 left. In that case, you may consider using the difference between your expenses and your income as your fun money, as long as you’ve covered all your bases with your expenses.
Set Goals for Life Beyond Debt
Imagine your future without student loans. Setting financial goals — such as paying off student loans or other debt or accruing enough cash for the down payment on a house — can help you build long-term financial stability and help you work toward financial freedom. The best way to do that is to plan to achieve these goals and stay committed to them.
Take a look at this example: Let’s say that instead of buying a new pair of shoes every month, you put $100 in an investment account every month. In five years, that amount could grow to $8,000, and over 30 years, it could grow to over $280,000.
Without dipping into a no-fun lifestyle or dealing with more money stress, consider finding a way to economize today to make tomorrow brighter. For example, maybe you could forgo or cut your fun money for a few months out of the year to build your savings. Or put the money saved toward crushing your student debt that much sooner.
Recommended: Ways to Stay Motivated When Paying Down Debt
How to Manage Student Loans
What’s the best way to manage student loans without forgetting to allocate money toward fun? Take a look at a few steps you can take.
Make It Automatic
First, consider setting up an automatic payment plan through your loan servicer. An automatic payment plan will automatically pull money from your account each month, ensuring you do not miss any payments.
Missing payments can result in a delinquent account, which happens the first day after you miss a student loan payment. If you remain delinquent on your student loan payments after 90 days, your loan servicer will report you to the three major national credit bureaus. This could lower your credit score, which might make it more difficult to obtain credit, get a job, or secure housing.
If that carries on, you could default on your student loan. Consequences could include the entire unpaid balance of your loan coming due, loss of eligibility for federal student aid, further damage to your credit score, wage garnishment, and possibly legal action against you.
This is an extreme situation, but making it automatic will prevent these issues from occurring.
Income-Driven Repayment
If you’re a federal student loan borrower, you may qualify for an income-driven repayment plan, which means monthly student loan payments get capped at a certain level of your income and family size.
Several types of income-driven repayment plans include the Saving on a Valuable Education (SAVE) Plan, Pay As You Earn (PAYE) Repayment plan, Income-Based Repayment (IBR) plan, and the Income-Contingent Repayment (ICR) plan:
• SAVE Plan: Caps your payments at 10% of your discretionary income and, as of summer 2024, possibly 5%.
• PAYE Plan: Caps your payments at 10% of your discretionary income, and you’ll never pay more than the 10-year Standard Repayment Plan amount.
• IBR plan: Caps your payment at 10% of your discretionary income if you’re a new borrower on or after July 1, 2024. If you’re not a new borrower on or after July 1, 2014, your payment generally caps at 15% of your discretionary income.
• ICR plan: Offers the lesser of 20% of your discretionary income or what you would pay on a repayment plan with a fixed payment over 12 years based on your income.
You must apply to qualify for one of these plans (contact your loan servicer) and update your income and qualifications every year to continue with one of these plans.
Prioritize an Emergency Fund and Retirement
Many graduates ask this question: Should I fund my retirement and emergency savings or pay off my student loans?
In most situations, there’s no reason why you can’t do both. Furthermore, it’s important to realize the importance of funding an emergency fund and retirement savings.
• Your emergency fund is a financial safety net that will allow you to pay for a critical home repair (think air conditioning in the summer!) or help cover the negative financial consequences of becoming unemployed. Ideally, you want to save three to six months’ worth of basic living expenses in an account where you can quickly get the money out if necessary.
• Saving for retirement when you have student loans can be an important step for your financial security as you reach older age. If you retire at 65 and live till 95, you must ensure you’ve saved enough to last those 30 years. Consider contributing at least enough to your retirement plan to get your employer match — many employers match between 3% and 5% of employee pay.
Putting money in all these “buckets” means prioritizing and organizing your debts, putting together a budget, tracking your spending, and setting savings goals.
Celebrate Your Progress
Don’t forget to take time to celebrate your progress! In addition to spending your “fun money,” you should also allocate time toward celebrating your student loan payoff goals.
For example, if you choose to pay off a high-interest rate loan and succeed in paying it off, consider rewarding yourself with a night out or another type of splurge — maybe a larger splurge than you would ordinarily allocate for fun money.
Recommended: How to Handle Student Loans During Job Loss
The Takeaway
While student loans and other debt types may make you feel burdened, remember that this is just a phase you are moving through. Building fun money into your budget can help bridge the gap between frustration and feeling like you have flexibility.
Write down a few things you enjoy doing, and budget for them. Also investigate other ways to free up funds to make paying off your student loans more manageable.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.
Photo credit: iStock/Dragon Claws
SoFi Student Loan Refinance If you are a federal student loan borrower, you should consider all of your repayment opportunities including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans or extended repayment plans.
SoFi Loan Products SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Average mortgage rates edged higher yesterday. Unfortunately, it was the sixth consecutive business day on which they’ve risen.
Earlier this morning, markets were signaling that mortgage rates today might barely move. However, these early mini-trends frequently alter speed or direction as the hours pass.
Current mortgage and refinance rates
Find your lowest rate. Start here
Program
Mortgage Rate
APR*
Change
Conventional 30-year fixed
7.15%
7.17%
Unchanged
Conventional 15-year fixed
6.57%
6.61%
-0.04
Conventional 20-year fixed
7.16%
7.19%
+0.02
Conventional 10-year fixed
6.63%
6.66%
-0.05
30-year fixed FHA
6.51%
7.19%
Unchanged
30-year fixed VA
6.61%
6.72%
-0.03
5/1 ARM Conventional
6.3%
7.39%
Unchanged
Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions See our rate assumptions here.
Should you lock your mortgage rate today?
Tomorrow’s Federal Reserve events (see below) could make a big difference to mortgage rates in the near and medium terms. But, right now, I’m pessimistic about our seeing a sustained downward trend until the summer. And some wonder if the fall might be a more realistic timeframe.
So, for now, my personal rate lock recommendations remain:
LOCK if closing in 7 days
LOCK if closing in 15 days
LOCK if closing in 30 days
LOCK if closing in 45 days
LOCKif closing in 60days
However, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So, let your gut and your own tolerance for risk help guide you.
>Related: 7 Tips to get the best refinance rate
Market data affecting today’s mortgage rates
Here’s a snapshot of the state of play this morning at about 9:50 a.m. (ET). The data are mostly compared with roughly the same time the business day before, so much of the movement will often have happened in the previous session. The numbers are:
The yield on 10-year Treasury notes held steady again at 4.32%. (Neutral for mortgage rates. However, yields were rising this morning.) More than any other market, mortgage rates typically tend to follow these particular Treasury bond yields
Major stock indexes were mixed this morning. (Neutral for mortgage rates.) When investors buy shares, they’re often selling bonds, which pushes those prices down and increases yields and mortgage rates. The opposite may happen when indexes are lower. But this is an imperfect relationship
Oil prices increased to $83.18 from $81.35 a barrel. (Bad for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
Goldprices inched down to $2,156 from $2,159 an ounce. (Neutral for mortgage rates*.) It is generally better for rates when gold prices rise and worse when they fall. Because gold tends to rise when investors worry about the economy.
CNN Business Fear & Greed index — dropped to 69 from 75 out of 100. (Good for mortgage rates.) “Greedy” investors push bond prices down (and interest rates up) as they leave the bond market and move into stocks, while “fearful” investors do the opposite. So, lower readings are often better than higher ones
*A movement of less than $20 on gold prices or 40 cents on oil ones is a change of 1% or less. So we only count meaningful differences as good or bad for mortgage rates.
Caveats about markets and rates
Before the pandemic, post-pandemic upheavals, and war in Ukraine, you could look at the above figures and make a pretty good guess about what would happen to mortgage rates that day. But that’s no longer the case. We still make daily calls. And are usually right. But our record for accuracy won’t achieve its former high levels until things settle down.
So, use markets only as a rough guide. Because they have to be exceptionally strong or weak to rely on them. But, with that caveat, mortgage rates today look likely to hold close to steady. However, be aware that “intraday swings” (when rates change speed or direction during the day) are a common feature right now.
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What’s driving mortgage rates today?
Tomorrow
I covered yesterday the three Federal Reserve events due early tomorrow afternoon:
2 p.m. Eastern — Rate announcement and report publications
2 p.m. Eastern — Summary of Economic Projects publication. This occurs only quarterly and includes a dot plot
I’ll brief you more fully on those tomorrow morning. That way you’ll know what to look out for before it’s too late to act.
Personally, I’m not very hopeful about the impact of the Fed’s events on mortgage rates. Of course, I can’t be sure what they’ll bring. But recent economic data has likely reinforced the central bank’s natural caution. And I suspect that it may signal later and fewer cuts in general interest rates this year than markets have been expecting.
If I’m right, that could be seriously bad for mortgage rates. So, let’s hope I’m wrong.
Today and later in the week
I’ll be surprised if today’s economic reports move mortgage rates much. They cover February’s housing starts and building permits. It’s not that those data are unimportant. However, they rarely attract the attention of the investors who largely determine mortgage rates.
We have to wait until Thursday for a couple of reports that sometimes affect mortgage rates. They’re two March purchasing managers’ indexes (PMIs) from S&P. One is for the services sector and the other covers manufacturing. I’ll brief you on those tomorrow morning.
Don’t forget you can always learn more about what’s driving mortgage rates in the most recent weekend edition of this daily report. These provide a more detailed analysis of what’s happening. They are published each Saturday morning soon after 10 a.m. (ET) and include a preview of the following week.
Recent trends
According to Freddie Mac’s archives, the weekly all-time lowest rate for 30-year, fixed-rate mortgages was set on Jan. 7, 2021, when it stood at 2.65%. The weekly all-time high was 18.63% on Sep. 10, 1981.
Freddie’s Mar. 14 report put that same weekly average at 6.74% down from the previous week’s 6.88%. But note that Freddie’s data are almost always out of date by the time it announces its weekly figures.
Expert forecasts for mortgage rates
Looking further ahead, Fannie Mae and the Mortgage Bankers Association (MBA) each has a team of economists dedicated to monitoring and forecasting what will happen to the economy, the housing sector and mortgage rates.
And here are their rate forecasts for the four quarters of 2024 (Q1/24, Q2/24 Q3/24 and Q4/24).
The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were updated on Feb. 12 and the MBA’s on Feb. 20.
Forecaster
Q1/24
Q2/24
Q3/24
Q4/24
Fannie Mae
6.5%
6.3%
6.1%
5.9%
MBA
6.9%
6.6%
6.3%
6.1%
Of course, given so many unknowables, both these forecasts might be even more speculative than usual. And their past record for accuracy hasn’t been wildly impressive.
Important notes on today’s mortgage rates
Here are some things you need to know:
Typically, mortgage rates go up when the economy’s doing well and down when it’s in trouble. But there are exceptions. Read ‘How mortgage rates are determined and why you should care’
Only “top-tier” borrowers (with stellar credit scores, big down payments, and very healthy finances) get the ultralow mortgage rates you’ll see advertised
Lenders vary. Yours may or may not follow the crowd when it comes to daily rate movements — though they all usually follow the broader trend over time
When daily rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
Refinance rates are typically close to those for purchases.
A lot is going on at the moment. And nobody can claim to know with certainty what will happen to mortgage rates in the coming hours, days, weeks or months.
Find your lowest mortgage rate today
You should comparison shop widely, no matter what sort of mortgage you want. Federal regulator the Consumer Financial Protection Bureau found in May 2023:
“Mortgage borrowers are paying around $100 a month more depending on which lender they choose, for the same type of loan and the same consumer characteristics (such as credit score and down payment).”
In other words, over the lifetime of a 30-year loan, homebuyers who don’t bother to get quotes from multiple lenders risk losing an average of $36,000. What could you do with that sort of money?
Verify your new rate
Mortgage rate methodology
The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.
How your mortgage interest rate is determined
Mortgage and refinance rates vary a lot depending on each borrower’s unique situation.
Factors that determine your mortgage interest rate include:
Overall strength of the economy — A strong economy usually means higher rates, while a weaker one can push current mortgage rates down to promote borrowing
Lender capacity — When a lender is very busy, it will increase rates to deter new business and give its loan officers some breathing room
Property type (condo, single-family, town house, etc.) — A primary residence, meaning a home you plan to live in full time, will have a lower interest rate. Investment properties, second homes, and vacation homes have higher mortgage rates
Loan-to-value ratio (determined by your down payment) — Your loan-to-value ratio (LTV) compares your loan amount to the value of the home. A lower LTV, meaning a bigger down payment, gets you a lower mortgage rate
Debt-To-Income ratio — This number compares your total monthly debts to your pretax income. The more debt you currently have, the less room you’ll have in your budget for a mortgage payment
Loan term — Loans with a shorter term (like a 15-year mortgage) typically have lower rates than a 30-year loan term
Borrower’s credit score — Typically the higher your credit score is, the lower your mortgage rate, and vice versa
Mortgage discount points — Borrowers have the option to buy discount points or ‘mortgage points’ at closing. These let you pay money upfront to lower your interest rate
Remember, every mortgage lender weighs these factors a little differently.
To find the best rate for your situation, you’ll want to get personalized estimates from a few different lenders.
Verify your new rate. Start here
Are refinance rates the same as mortgage rates?
Rates for a home purchase and mortgage refinance are often similar.
However, some lenders will charge more for a refinance under certain circumstances.
Typically when rates fall, homeowners rush to refinance. They see an opportunity to lock in a lower rate and payment for the rest of their loan.
This creates a tidal wave of new work for mortgage lenders.
Unfortunately, some lenders don’t have the capacity or crew to process a large number of refinance loan applications.
In this case, a lender might raise its rates to deter new business and give loan officers time to process loans currently in the pipeline.
Also, cashing out equity can result in a higher rate when refinancing.
Cash-out refinances pose a greater risk for mortgage lenders, so they’re often priced higher than new home purchases and rate-term refinances.
Check your refinance rates today. Start here
How to get the lowest mortgage or refinance rate
Since rates can vary, always shop around when buying a house or refinancing a mortgage.
Comparison shopping can potentially save thousands, even tens of thousands of dollars over the life of your loan.
Here are a few tips to keep in mind:
1. Get multiple quotes
Many borrowers make the mistake of accepting the first mortgage or refinance offer they receive.
Some simply go with the bank they use for checking and savings since that can seem easiest.
However, your bank might not offer the best mortgage deal for you. And if you’re refinancing, your financial situation may have changed enough that your current lender is no longer your best bet.
So get multiple quotes from at least three different lenders to find the right one for you.
2. Compare Loan Estimates
When shopping for a mortgage or refinance, lenders will provide a Loan Estimate that breaks down important costs associated with the loan.
You’ll want to read these Loan Estimates carefully and compare costs and fees line-by-line, including:
Interest rate
Annual percentage rate (APR)
Monthly mortgage payment
Loan origination fees
Rate lock fees
Closing costs
Remember, the lowest interest rate isn’t always the best deal.
Annual percentage rate (APR) can help you compare the ‘real’ cost of two loans. It estimates your total yearly cost including interest and fees.
Also, pay close attention to your closing costs.
Some lenders may bring their rates down by charging more upfront via discount points. These can add thousands to your out-of-pocket costs.
3. Negotiate your mortgage rate
You can also negotiate your mortgage rate to get a better deal.
Let’s say you get loan estimates from two lenders. Lender A offers the better rate, but you prefer your loan terms from Lender B. Talk to Lender B and see if they can beat the former’s pricing.
You might be surprised to find that a lender is willing to give you a lower interest rate in order to keep your business.
And if they’re not, keep shopping — there’s a good chance someone will.
Fixed-rate mortgage vs. adjustable-rate mortgage: Which is right for you?
Mortgage borrowers can choose between a fixed-rate mortgage and an adjustable-rate mortgage (ARM).
Fixed-rate mortgages (FRMs) have interest rates that never change unless you decide to refinance. This results in predictable monthly payments and stability over the life of your loan.
Adjustable-rate loans have a low interest rate that’s fixed for a set number of years (typically five or seven). After the initial fixed-rate period, the interest rate adjusts every year based on market conditions.
With each rate adjustment, a borrower’s mortgage rate can either increase, decrease, or stay the same. These loans are unpredictable since monthly payments can change each year.
Adjustable-rate mortgages are fitting for borrowers who expect to move before their first rate adjustment, or who can afford a higher future payment.
In most other cases, a fixed-rate mortgage is typically the safer and better choice.
Remember, if rates drop sharply, you are free to refinance and lock in a lower rate and payment later on.
How your credit score affects your mortgage rate
You don’t need a high credit score to qualify for a home purchase or refinance, but your credit score will affect your rate.
This is because credit history determines risk level.
Historically speaking, borrowers with higher credit scores are less likely to default on their mortgages, so they qualify for lower rates.
So, for the best rate, aim for a credit score of 720 or higher.
Mortgage programs that don’t require a high score include:
Conventional home loans — minimum 620 credit score
FHA loans — minimum 500 credit score (with a 10% down payment) or 580 (with a 3.5% down payment)
VA loans — no minimum credit score, but 620 is common
USDA loans — minimum 640 credit score
Ideally, you want to check your credit report and score at least 6 months before applying for a mortgage. This gives you time to sort out any errors and make sure your score is as high as possible.
If you’re ready to apply now, it’s still worth checking so you have a good idea of what loan programs you might qualify for and how your score will affect your rate.
You can get your credit report from AnnualCreditReport.com and your score from MyFico.com.
How big of a down payment do I need?
Nowadays, mortgage programs don’t require the conventional 20 percent down.
Indeed, first-time home buyers put only 6 percent down on average.
Down payment minimums vary depending on the loan program. For example:
Conventional home loans require a down payment between 3% and 5%
FHA loans require 3.5% down
VA and USDA loans allow zero down payment
Jumbo loans typically require at least 5% to 10% down
Keep in mind, a higher down payment reduces your risk as a borrower and helps you negotiate a better mortgage rate.
If you are able to make a 20 percent down payment, you can avoid paying for mortgage insurance.
This is an added cost paid by the borrower, which protects their lender in case of default or foreclosure.
But a big down payment is not required.
For many people, it makes sense to make a smaller down payment in order to buy a house sooner and start building home equity.
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Choosing the right type of home loan
No two mortgage loans are alike, so it’s important to know your options and choose the right type of mortgage.
The five main types of mortgages include:
Fixed-rate mortgage (FRM)
Your interest rate remains the same over the life of the loan. This is a good option for borrowers who expect to live in their homes long-term.
The most popular loan option is the 30-year mortgage, but 15- and 20-year terms are also commonly available.
Adjustable-rate mortgage (ARM)
Adjustable-rate loans have a fixed interest rate for the first few years. Then, your mortgage rate resets every year.
Your rate and payment can rise or fall annually depending on how the broader interest rate trends.
ARMs are ideal for borrowers who expect to move prior to their first rate adjustment (usually in 5 or 7 years).
For those who plan to stay in their home long-term, a fixed-rate mortgage is typically recommended.
Jumbo mortgage
A jumbo loan is a mortgage that exceeds the conforming loan limit set by Fannie Mae and Freddie Mac.
In 2023, the conforming loan limit is $726,200 in most areas.
Jumbo loans are perfect for borrowers who need a larger loan to purchase a high-priced property, especially in big cities with high real estate values.
FHA mortgage
A government loan backed by the Federal Housing Administration for low- to moderate-income borrowers. FHA loans feature low credit score and down payment requirements.
VA mortgage
A government loan backed by the Department of Veterans Affairs. To be eligible, you must be active-duty military, a veteran, a Reservist or National Guard service member, or an eligible spouse.
VA loans allow no down payment and have exceptionally low mortgage rates.
USDA mortgage
USDA loans are a government program backed by the U.S. Department of Agriculture. They offer a no-down-payment solution for borrowers who purchase real estate in an eligible rural area. To qualify, your income must be at or below the local median.
Bank statement loan
Borrowers can qualify for a mortgage without tax returns, using their personal or business bank account as evidence of their financial circumstances. This is an option for self-employed or seasonally-employed borrowers.
Portfolio/Non-QM loan
These are mortgages that lenders don’t sell on the secondary mortgage market. And this gives lenders the flexibility to set their own guidelines.
Non-QM loans may have lower credit score requirements or offer low-down-payment options without mortgage insurance.
Choosing the right mortgage lender
The lender or loan program that’s right for one person might not be right for another.
Explore your options and then pick a loan based on your credit score, down payment, and financial goals, as well as local home prices.
Whether you’re getting a mortgage for a home purchase or a refinance, always shop around and compare rates and terms.
Typically, it only takes a few hours to get quotes from multiple lenders. And it could save you thousands in the long run.
Time to make a move? Let us find the right mortgage for you
Current mortgage rates methodology
We receive current mortgage rates each day from a network of mortgage lenders that offer home purchase and refinance loans. Those mortgage rates shown here are based on sample borrower profiles that vary by loan type. See our full loan assumptions here.