Mortgage rates came down across all terms from a week ago, according to rate data collected by Bankrate. Rates for 30-year fixed, 15-year fixed, 5/1 ARMs and jumbo loans all receded.
While it’s expected that rates will gradually come down this year, the path might be bumpy.
At its Jan. 31 meeting, the Federal Reserve announced it would hold off changing rates, but could cut rates in the future. At their March 20th meeting, the Fed will update their outlook on rates. Rate changes affect many areas of the economy, including the 10-year Treasury, a key benchmark for fixed-rate mortgages.
“Where the 10-Year Treasury yield goes, mortgage rates will follow,” says Ken Johnson of Florida Atlantic University. “In roughly the last two months, the 10-year Treasury yield is up 50 basis points. Depending on the source, the 30-year mortgage rate is up 48 basis points. Treasurys’ path remains a coin toss at this point.”
Rates accurate as of March 14, 2024.
The rates listed here are averages based on the assumptions indicated here. Actual rates displayed on-site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Thursday, March 14th, 2024 at 7:30 a.m.
30-year mortgage rate declines, -0.18%
Today’s average rate for the benchmark 30-year fixed mortgage is 6.84 percent, a decrease of 18 basis points from a week ago. A month ago, the average rate on a 30-year fixed mortgage was higher, at 7.25 percent.
At the current average rate, you’ll pay principal and interest of $654.59 for every $100,000 you borrow. That’s a decline of $12.06 from last week.
The popular 30-year mortgage has a number of advantages:
Lower monthly payment: Compared to a shorter term, such as 15 years, the 30-year mortgage offers lower, more affordable payments spread over time.
Stability: With a 30-year fixed mortgage, you lock in a set principal and interest payment, making it easier to plan your housing expenses for the long term. Remember: Your monthly housing payment can change if your homeowners insurance premiums and property taxes go up or, less likely, down.
Buying power: With lower payments, you might qualify for a larger loan amount or a more expensive home.
Flexibility. Lower monthly payments can free up some of your monthly budget for other goals, like building an emergency fund, contributing to retirement or college tuition, or saving for home repairs and maintenance.
15-year mortgage rate drops, -0.14%
The average rate you’ll pay for a 15-year fixed mortgage is 6.42 percent, down 14 basis points from a week ago.
Monthly payments on a 15-year fixed mortgage at that rate will cost around $867 per $100,000 borrowed. The bigger payment may be a little more difficult to find room for in your monthly budget than a 30-year mortgage payment, but it comes with some big advantages: You’ll come out several thousand dollars ahead over the life of the loan in total interest paid and build equity much more rapidly.
5/1 ARM moves lower, -0.11%
The average rate on a 5/1 adjustable rate mortgage is 6.35 percent, falling 11 basis points from a week ago.
Adjustable-rate mortgages, or ARMs, are home loans that come with a floating interest rate. In other words, the interest rate will change at regular intervals, unlike fixed-rate mortgages. These loan types are best for people who expect to refinance or sell before the first or second adjustment. Rates could be materially higher when the loan first adjusts, and thereafter.
While borrowers shunned ARMs during the pandemic days of super-low rates, this type of loan has made a comeback as mortgage rates have risen.
Monthly payments on a 5/1 ARM at 6.35 percent would cost about $622 for each $100,000 borrowed over the initial five years, but could climb hundreds of dollars higher afterward, depending on the loan’s terms.
Current jumbo mortgage rate retreats, -0.12%
The average jumbo mortgage rate is 6.94 percent, a decrease of 12 basis points from a week ago. Last month on the 14th, the average rate for jumbo mortgages was greater than 6.94 at 7.31 percent.
At today’s average rate, you’ll pay a combined $661.28 per month in principal and interest for every $100,000 you borrow. That’s $8.06 lower, compared with last week.
Mortgage refinance rates
30-year fixed-rate refinance trends down, -0.20%
The average 30-year fixed-refinance rate is 6.84 percent, down 20 basis points since the same time last week. A month ago, the average rate on a 30-year fixed refinance was higher at 7.27 percent.
At the current average rate, you’ll pay $654.59 per month in principal and interest for every $100,000 you borrow. That represents a decline of $13.40 over what it would have been last week.
Where are mortgage rates going?
With inflation still above the Fed’s 2 percent goal and the job market holding strong, the Fed isn’t likely to cut rates at its March meeting.
“The Federal Reserve will not cut interest rates in the first half of this year, in my view,” says Lawrence Yun, chief economist of the National Association of Realtors, “but rate cuts of three, four or even five rounds will be possible in the second half of the year as rent measures will be much more well-behaved.”
The rates on 30-year mortgages mostly follow the 10-year Treasury, which shifts continuously as economic conditions dictate, while the cost of variable-rate home loans mirror the Fed’s moves.
These broader factors influence overall rate movement. As a borrower, you could be quoted a higher or lower rate compared to the trend.
What today’s rates mean for you and your mortgage
While mortgage rates change daily, it’s unlikely we’ll see rates back at 3 percent anytime soon. If you’re shopping for a mortgage now, it might be wise to lock your rate when you find an affordable loan. If your house-hunt is taking longer than anticipated, revisit your budget so you’ll know exactly how much house you can afford at prevailing market rates.
Keep in mind: You could save thousands over the life of your mortgage by getting at least three loan offers, according to Freddie Mac research. You don’t have to stick with your bank or credit union, either. There are many types of mortgage lenders, including online-only and local, smaller shops.
“All too often, some [homebuyers] take the path of least resistance when seeking a mortgage, in part because the process of buying a home can be stressful, complicated and time-consuming,” says Mark Hamrick, senior economic analyst for Bankrate. “But when we’re talking about the potential of saving a lot of money, seeking the best deal on a mortgage has an excellent return on investment. Why leave that money on the table when all it takes is a bit more effort to shop around for the best rate, or lowest cost, on a mortgage?”
More on current mortgage rates
Methodology
Bankrate displays two sets of rate averages that are produced from two surveys we conduct: one daily (“overnight averages”) and the other weekly (“Bankrate Monitor averages”).
The rates on this page represent our overnight averages. For these averages, APRs and rates are based on no existing relationship or automatic payments.
Learn more about Bankrate’s rate averages, editorial guidelines and how we make money.
Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate mortgages to write unbiased product reviews.
Mortgage rates started the week relatively low, but they’re back up today.
Average 30-year mortgage rates are around 20 basis points up from where they were earlier this week, and are now in the upper 6% range, according to Zillow data.
Mortgage rates are expected to go down in 2024, but they’ve been elevated so far this year in response to still-high inflation.
Price growth has slowed significantly from when it peaked in 2022, but it’s still above the Federal Reserve’s target rate of 2%. In February, the Consumer Price Index actually inched up a bit from the previous month.
Because the path to lower inflation is proving to be a bit bumpy, we’ll likely need to wait a few more months until mortgage rates fall. And if inflation continues to stagnate, we might not see rates drop until much later in the year.
Mortgage Rates Today
Mortgage type
Average rate today
This information has been provided by
Zillow. See more
mortgage rates on Zillow
Real Estate on Zillow
Mortgage Refinance Rates Today
Mortgage type
Average rate today
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Zillow. See more
mortgage rates on Zillow
Real Estate on Zillow
Mortgage Calculator
Use our free mortgage calculator to see how today’s interest rates will affect your monthly payments.
Mortgage Calculator
$1,161 Your estimated monthly payment
Total paid$418,177
Principal paid$275,520
Interest paid$42,657
Paying a 25% higher down payment would save you $8,916.08 on interest charges
Lowering the interest rate by 1% would save you $51,562.03
Paying an additional $500 each month would reduce the loan length by 146 months
By clicking on “More details,” you’ll also see how much you’ll pay over the entire length of your mortgage, including how much goes toward the principal vs. interest.
30-Year Fixed Mortgage Rates
This week’s average 30-year fixed mortgage rate was 6.74%, according to Freddie Mac. This is a 14-basis-point decrease from the previous week.
The 30-year fixed-rate mortgage is the most common type of home loan. With this type of mortgage, you’ll pay back what you borrowed over 30 years, and your interest rate won’t change for the life of the loan.
The lengthy 30-year term allows you to spread out your payments over a long period of time, meaning you can keep your monthly payments lower and more manageable. The trade-off is that you’ll have a higher rate than you would with shorter terms or adjustable rates.
15-Year Fixed Mortgage Rates
Average 15-year mortgage rates inched down to 6.16% this week, according to Freddie Mac data. This is a six-point decrease since the week before.
If you want the predictability that comes with a fixed rate but are looking to spend less on interest over the life of your loan, a 15-year fixed-rate mortgage might be a good fit for you. Because these terms are shorter and have lower rates than 30-year fixed-rate mortgages, you could potentially save tens of thousands of dollars in interest. However, you’ll have a higher monthly payment than you would with a longer term.
How Do Fed Rate Hikes Affect Mortgages?
The Federal Reserve has increased the federal funds rate dramatically to try to slow economic growth and get inflation under control. So far, inflation has slowed significantly, but it’s still a bit above the Fed’s 2% target rate.
Mortgage rates aren’t directly impacted by changes to the federal funds rate, but they often trend up or down ahead of Fed policy moves. This is because mortgage rates change based on investor demand for mortgage-backed securities, and this demand is often impacted by how investors expect Fed hikes to affect the broader economy.
The Fed has indicated that it’s likely done hiking rates and that it could start cutting soon. This will likely allow mortgage rates to trend down later this year.
When Will Mortgage Rates Go Down?
Mortgage rates increased dramatically over the last two years, but they’ve moderated somewhat in recent months, and are expected to drop further this year.
In February 2024, the Consumer Price Index rose 3.2% year-over-year. Inflation has slowed significantly since it peaked last year, which is good news for mortgage rates. But it has to slow further before rates will begin to fall.
For homeowners looking to leverage their home’s value to cover a big purchase — such as a home renovation — a home equity line of credit (HELOC) may be a good option while we wait for mortgage rates to ease. Check out some of our best HELOC lenders to start your search for the right loan for you.
A HELOC is a line of credit that lets you borrow against the equity in your home. It works similarly to a credit card in that you borrow what you need rather than getting the full amount you’re borrowing in a lump sum. It also lets you tap into the money you have in your home without replacing your entire mortgage, like you’d do with a cash-out refinance.
Current HELOC rates are relatively low compared to other loan options, including credit cards and personal loans.
When it comes to their kids, many of your employees may be willing to put their retirement on the line.
As HR pros focus on workforce planning, understanding the burden that college costs impose on most employees is a key component for successful financial wellness programs.
Paying for college is a daunting challenge, and even financially savvy parents can become overwhelmed and confused by the college financing process. That’s where employer-sponsored education efforts can help. Employers who understand the following common college financing traps can better plan programs to alleviate the stress of paying for college and improve financial wellness overall.
Trap One: Prioritizing Their Children’s Education Over Their Own Retirement
By now, it’s become a financial wellness mantra: Parents should prioritize their retirement savings before saving for or paying for a child’s college education. After all, the thinking goes, students can borrow for education costs, but parents can’t borrow money to pay for retirement. And if parents don’t properly prepare for retirement, their children may end up supporting them in their later years, jeopardizing their future finances.
But with ever-rising tuition costs and the increasing burden of student debt, it may be harder for your employees to follow that tried-and-true advice. The cost of college has more than doubled over the past four decades — and student loan borrowing has risen along with it. Americans collectively owe more than 1.7 trillion in student loan debt, according to the Federal Reserve .
Trying to ease the burden on their children, your employees may be raiding their future. Among people aged 25 to 80 who are saving for both retirement and future college expenses, 58% say they are delaying retirement, and 41% say they have withdrawn money from their own retirement funds to pay for a child’s (or other relative’s) tuition, according to a July 2023 survey by the Society of Actuaries .
When an employee delays retirement to catch up on missed retirement savings or pay off education loans, it can be costly to an organization. What’s more, if paying for college forces an employee to work longer than they want to, the result may be a less productive, less engaged worker.
Recommended: SoFi Survey: The Future of Financial Well-Being at Work
Trap Two: Mismanaging PLUS loans
Parent Loans for Undergraduate Students (PLUS loans) are underwritten by the federal government and allow families to borrow without the same credit checks and other limits imposed on other types of lending. Because these loans are in a parent’s name, your employees may naturally gravitate to them as a way to help their children avoid debt.
But there are drawbacks. Unlike federal student loans, there are no limits on the amount parents can borrow as long as it doesn’t exceed education costs. To qualify for a PLUS loan, parents need only pass a check for an “adverse event” such as a recent bankruptcy filing or foreclosure. There is no consideration of the borrower’s ability to repay the loan. Given the often astronomical costs of attending a four-year college, your employees may quickly find they have taken on more debt than they can comfortably handle.
In addition, PLUS loan interest rates, set by the government each year, are usually significantly higher than student-held federal loans (8.05% for 2023-2024 versus 5.50%) and sometimes higher than some private college loans.
If parents default or consolidate their PLUS loans, or if they receive a forbearance or a deferment, the interest that continues to accrue is capitalized. That means that principal and payments can become even more unaffordable for employees. In addition, if the loans go into default, the government can garnish wages, Social Security checks, and tax refunds.
Recommended: Preparing for College Resource Guide for Parents
Trap Three: Avoiding College Financing at All Costs
Another common mistake lurks on the opposite side of the spectrum. In an effort to avoid college debt of any kind, parents who have some, but not enough, college savings may decide to forego saving for retirement, dip into retirement savings, or use home equity to pay tuition bills as they come.
Withdrawing 401(k) savings can result in significant penalties, taxes, and, importantly, lost principal and earnings. Cash-out home refinancing can lead to higher and perhaps unaffordable mortgage payments. Even putting retirement savings on hold when the year’s tuition is due can translate into large gaps in savings goals, depending on the number and ages of children attending college.
These are all understandable mistakes. As we saw above, an overreliance on debt to pay college bills can seriously jeopardize financial well-being. But so, too, can dismissing the strategic use of financial aid and loans to finance college costs.
For instance, your employees may neglect filling out the Free Application for Federal Student Aid (FAFSA), figuring that they earn too much to qualify for federal financial aid. According to Sallie Mae’s How America Pays for College 2023 report, 71% of families filed the FAFSA for the 2022-2023 academic year, down from 86% in 2016-2017.
These parents may not realize that without the FAFSA, the student will not be awarded federal subsidized and unsubsidized loans, which can be attractive for their low rates and, in the case of subsidized loan, help from the government in paying interest.
More importantly, many schools require students to submit a FAFSA to be eligible for merit-based scholarships and grants, even though these funds are awarded according to the student’s academic record and other achievements, not financial need. Merit-based aid does not have to be repaid and is usually awarded to undergraduates for the full four years.
While too much debt is never smart, a prudent and affordable mix of well-structured student debt can help parents avoid sacrificing retirement savings, home equity, and other long-term savings to pay for college now.
Employer-sponsored college financing education and one-on-one college counseling can help ensure parents understand the complexities of financial aid and student borrowing so they can balance long-term and current financial needs and goals.
The Takeaway
Employers who help parents avoid these common college financing traps may help alleviate what is fast becoming one of the largest sources of financial stress in your workforce.
SoFi at Work can help with student loan repayment platforms, extensive education efforts, plus a lending suite of student, graduate student, MBA, and parent loans. For organizations that are looking to help their employees get ahead on their education financing goals, SoFi at Work also offers a 529 College Savings Program, which can be integrated into any payroll system.
Photo credit: iStock/Orbon Alija
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Mortgage rates fell late last week, and they remain low today. Average 30-year mortgage rates have generally been hovering in the 6.30% to 6.40% range this week, according to Zillow data. This is a significant drop from the start of the month, when rates were above 6.60%.
Where mortgage rates go next depends on the economy. Though the latest data suggests that the economy is slowly coming into better balance, any hotter-than-expected reports could cause rates to spike like they did in February.
As long as inflation continues to slow and the labor market doesn’t heat back up, mortgage rates should go down in 2024.
Mortgage rates have remained elevated so far this year as markets have had to adjust their expectations of when the Federal Reserve might finally start cutting the federal funds rate. Right now, investors are pricing in a nearly 60% probability that the Fed will cut this rate by 25 basis points at its June meeting, according to the CME FedWatch Tool.
This means that we could see mortgage rates inch down just ahead of the summer months. But they may not be substantially lower until we get closer to the end of the year.
Today’s mortgage rates
Mortgage type
Average rate today
This information has been provided by
Zillow. See more
mortgage rates on Zillow
Real Estate on Zillow
Today’s refinance rates
Mortgage type
Average rate today
This information has been provided by
Zillow. See more
mortgage rates on Zillow
Real Estate on Zillow
Mortgage Calculator
Use our free mortgage calculator to see how today’s interest rates will affect your monthly payments:
Mortgage Calculator
$1,161 Your estimated monthly payment
Total paid$418,177
Principal paid$275,520
Interest paid$42,657
Paying a 25% higher down payment would save you $8,916.08 on interest charges
Lowering the interest rate by 1% would save you $51,562.03
Paying an additional $500 each month would reduce the loan length by 146 months
By clicking on “More details,” you’ll also see how much you’ll pay over the entire length of your mortgage, including how much goes toward the principal vs. interest.
Mortgage Rate Projection for 2024
Mortgage rates started ticking up from historic lows in the second half of 2021 and increased dramatically in 2022 and throughout most of 2023.
Many forecasts expect rates to fall this year now that inflation has been coming down. In the last 12 months, the Consumer Price Index rose by 3.1%, a significant slowdown compared when it peaked at 9.1% in 2022. But we’ll likely need to see more slowing before rates can drop substantially.
For homeowners looking to leverage their home’s value to cover a big purchase — such as a home renovation — a home equity line of credit (HELOC) may be a good option while we wait for mortgage rates to ease. Check out some of our best HELOC lenders to start your search for the right loan for you.
A HELOC is a line of credit that lets you borrow against the equity in your home. It works similarly to a credit card in that you borrow what you need rather than getting the full amount you’re borrowing in a lump sum. It also lets you tap into the money you have in your home without replacing your entire mortgage, like you’d do with a cash-out refinance.
Current HELOC rates are relatively low compared to other loan options, including credit cards and personal loans.
When Will House Prices Come Down?
We aren’t likely to see home prices drop this year. In fact, they’ll probably rise.
Fannie Mae researchers expect prices to increase 3.20% in 2024 and 0.30% in 2025, while the Mortgage Bankers Association expects a 4.10% increase in 2024 and a 3.30% increase in 2024.
Sky high mortgage rates have pushed many hopeful buyers out of the market, slowing homebuying demand and putting downward pressure on home prices. But rates have since eased, removing some of that pressure. The current supply of homes is also historically low, which will likely push prices up.
What Happens to House Prices in a Recession?
House prices usually drop during a recession, but not always. When it does happen, it’s generally because fewer people can afford to purchase homes, and the low demand forces sellers to lower their prices.
How Much Mortgage Can I Afford?
A mortgage calculator can help you determine how much house you can afford. Play around with different home prices and down payment amounts to see how much your monthly payment could be, and think about how that fits in with your overall budget.
Typically, experts recommend spending no more than 28% of your gross monthly income on housing expenses. This means your entire monthly mortgage payment, including taxes and insurance, shouldn’t exceed 28% of your pre-tax monthly income.
The lower your rate, the more you’ll be able to borrow, so shop around and get preapproved with multiple mortgage lenders to see who can offer you the best rate. But remember not to borrow more than what your budget can comfortably handle.
Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate mortgages to write unbiased product reviews.
Mortgage rates initially ticked up a little bit following the release of Tuesday’s slightly hotter-than-expected Consumer Price Index data. But they’ve since trended back down and remain well below last month’s levels. Rates are still expected to go down this year.
Last month, average 30-year mortgage rates rose to 6.52%. So far this month, they’ve been trending a bit lower, and they could drop below 6% by the end of the year, according to Fannie Mae’s latest forecast.
But mortgage rates probably won’t drop substantially until we get more data showing that inflation is continuing to slow.
In February, prices rose 3.2% year over year, according to the Bureau of Labor Statistics. This is a slight uptick from the previous month, which showed prices rising 3.1% on an annual basis.
Federal Reserve officials want to see more data that inflation is coming down before they start lowering the federal funds rate. Once we get closer to a likely Fed cut, mortgage rates should start to fall.
Right now, investors still believe the Fed could start cutting rates as soon as June, according to the CME FedWatch Tool. So we could see mortgage rates go down in just a few months.
Mortgage Rates Today
Mortgage type
Average rate today
This information has been provided by
Zillow. See more
mortgage rates on Zillow
Real Estate on Zillow
Mortgage Refinance Rates Today
Mortgage type
Average rate today
This information has been provided by
Zillow. See more
mortgage rates on Zillow
Real Estate on Zillow
Mortgage Calculator
Use our free mortgage calculator to see how today’s mortgage rates will affect your monthly and long-term payments.
Mortgage Calculator
$1,161 Your estimated monthly payment
Total paid$418,177
Principal paid$275,520
Interest paid$42,657
Paying a 25% higher down payment would save you $8,916.08 on interest charges
Lowering the interest rate by 1% would save you $51,562.03
Paying an additional $500 each month would reduce the loan length by 146 months
By plugging in different term lengths and interest rates, you’ll see how your monthly payment could change.
Mortgage Rate Projection for 2024
Mortgage rates increased dramatically for most of 2023, though they started trending back down in the final months of the year. As the economy continues to normalize this year, rates should come down even further.
In the last 12 months, the Consumer Price Index rose by 3.2%, a significant slowdown compared to when it peaked at 9.1% in 2022. This is good news for mortgage rates — as inflation slows and the Federal Reserve is able to start cutting the federal funds rate, mortgage rates are expected to trend down as well.
For homeowners looking to leverage their home’s value to cover a big purchase — such as a home renovation — a home equity line of credit (HELOC) may be a good option while we wait for mortgage rates to ease. Check out some of the best HELOC lenders to start your search for the right loan for you.
A HELOC is a line of credit that lets you borrow against the equity in your home. It works similarly to a credit card in that you borrow what you need rather than getting the full amount you’re borrowing in a lump sum. It also lets you tap into the money you have in your home without replacing your entire mortgage, like you’d do with a cash-out refinance.
Current HELOC rates are relatively low compared to other loan options, including credit cards and personal loans.
When Will House Prices Come Down?
We aren’t likely to see home prices drop anytime soon thanks to extremely limited supply. In fact, they’ll likely rise this year as mortgage rates drop.
Fannie Mae researchers expect prices to increase 3.2% in 2024, while the Mortgage Bankers Association expects a 4.1% increase in 2024.
Lower mortgage rates will bring more buyers onto the market, putting upward pressure on prices. But prices aren’t currently expected to increase as much as they have in recent years.
Fixed-Rate vs. Adjustable-Rate Mortgage Pros and Cons
Fixed-rate mortgages lock in your rate for the entire life of your loan. Adjustable-rate mortgages lock in your rate for the first few years, then your rate goes up or down periodically.
So how do you choose between a fixed-rate vs. adjustable-rate mortgage?
ARMs typically start with lower rates than fixed-rate mortgages, but ARM rates can go up once your initial introductory period is over. If you plan on moving or refinancing before the rate adjusts, an ARM could be a good deal. But keep in mind that a change in circumstances could prevent you from doing these things, so it’s a good idea to think about whether your budget could handle a higher monthly payment.
Fixed-rate mortgage are a good choice for borrowers who want stability, since your monthly principal and interest payments won’t change throughout the life of the loan (though your mortgage payment could increase if your taxes or insurance go up).
But in exchange for this stability, you’ll take on a higher rate. This might seem like a bad deal right now, but if rates increase further down the road, you might be glad to have a rate locked in. And if rates trend down, you may be able to refinance to snag a lower rate
How Does an Adjustable-Rate Mortgage Work?
Adjustable-rate mortgages start with an introductory period where your rate will remain fixed for a certain period of time. Once that period is up, it will begin to adjust periodically — typically once per year or once every six months.
How much your rate will change depends on the index that the ARM uses and the margin set by the lender. Lenders choose the index that their ARMs use, and this rate can trend up or down depending on current market conditions.
The margin is the amount of interest a lender charges on top of the index. You should shop around with multiple lenders to see which one offers the lowest margin.
ARMs also come with limits on how much they can change and how high they can go. For example, an ARM might be limited to a 2% increase or decrease every time it adjusts, with a maximum rate of 8%.
Are you eligible for the zero-down USDA home loan?
What if you could secure a USDA home loan that allows you to buy a house with no down payment, competitive mortgage rates, and reduced mortgage insurance costs?
It might sound like a dream, but it’s entirely possible with the USDA mortgage program. Designed to assist low- and moderate-income Americans in becoming homeowners, USDA loans provide incredibly affordable financing options for eligible buyers.
Essentially, USDA mortgages empower individuals to transition from renting to owning, even when they thought homeownership was out of reach.
Verify your USDA loan eligibility. Start here
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>Related: How to buy a house with $0 down: First-time home buyer
What is a USDA loan?
USDA loans are mortgages backed by the U.S. Department of Agriculture as part of its Rural Development Guaranteed Housing Loan program. The USDA offers financing with no down payment, reduced mortgage insurance, and below-market mortgage rates.
Verify your USDA loan eligibility. Start here
The USDA mortgage program is intended for home buyers with low-to-average household incomes. In order to qualify, you must also purchase a home in a “rural area” as the USDA defines it. Those who are eligible can use a USDA mortgage to buy a home or refinance one they already own.
USDA loans offer nearly unbeatable benefits for qualified borrowers. So if this program sounds like a good fit for you, it’s worth getting in touch with a participating lender to find out if you’re eligible.
How do USDA loans work?
The U.S. Department of Agriculture insures USDA loans. Thanks to government guarantees and subsidies, lenders can offer 100% financing and below-market interest rates without taking on too much risk.
Verify your USDA loan eligibility. Start here
Although the USDA backs this program, it typically isn’t the one lending money. Instead, private lenders are authorized to offer USDA loans. That means you can get a USDA mortgage from many mainstream banks, mortgage lenders, and credit unions.
The application process for a USDA mortgage works just like any other home loan. You’ll compare rates and choose a lender, complete an application (often online), provide financial documents, wait for the lender’s approval, and then set a closing day.
The only exception is for very low-income borrowers, who may qualify for a USDA Direct home loan. In this case, you’d go straight to the Department of Agriculture to apply rather than to a private lender.
Types of USDA loans
For eligible individuals and families looking to buy, build, or renovate a home in a rural area, the USDA offers three main mortgage loan types. The loan programs are as follows:.
Verify your USDA loan eligibility. Start here
USDA Guaranteed Loans
Approved private lenders, such as banks and mortgage companies, provide USDA loan guarantees to qualified borrowers. A USDA guaranteed loan is one in which the government backs a portion of the loan, lowering the lender’s risk and allowing them to offer more favorable terms to the borrower. These loans frequently have low interest rates, no down payment, and more lenient credit requirements. The property must be in an eligible rural area as the USDA defines it, and borrowers must meet household income requirements that vary depending on location and household size.
USDA Direct Loans
The USDA also offers the Single Family Housing Direct loan through the Section 502 Direct Loan Program. These loans are meant to help low-income families buy, build, or fix up small homes in rural areas. The USDA, rather than private lenders, provides funding for direct loans as opposed to guaranteed loans. These loans have favorable terms, such as low interest rates (as low as 1% with payment assistance) and long repayment periods (up to 38 years for eligible applicants). Income, creditworthiness, and the property’s location in an eligible rural area determine eligibility for direct loans.
USDA Home Improvement Loan
The USDA’s Single Family Housing Repair Loans and Grants program, also known as the Section 504 program, provides financing for home improvements. This program provides low-interest, fixed-rate loans and grants to low-income rural homeowners for necessary home repairs, improvements, and modifications that make their homes safer, more energy-efficient, and more accessible. However, if you’re looking for one, you might have a difficult time finding this type of USDA home loan. They are not widely available from lenders.
USDA loan eligibility requirements
To be eligible for a USDA home loan, you’ll need to meet a number of requirements that vary depending on whether you are applying for a USDA loan guarantee or a USDA direct loan.
Verify your USDA loan eligibility. Start here
Some general requirements, however, apply to all USDA loans, specifically those based on both buyer and property eligibility.
USDA loan property requirements
Eligible rural area
The USDA defines an eligible area in rural America as having a population of 20,000 or fewer. To check if the property you’re considering falls within these designated areas, the USDA’s eligibility site provides all the necessary information. We also provide a USDA eligibility map below.
Single-family primary residence
USDA loans are exclusively available for primary residences. Neither investment properties nor second homes are eligible for this program.
Meet safety standards
The property must adhere to the USDA’s minimum property requirements, which focus on safety, structural integrity, and adequate access to utilities and services.
USDA loan borrower requirements
Income limits
You must meet USDA monthly income limits, meaning your household income can’t exceed 115% of the area median income. Conforming to USDA income eligibility requirements ensures the program is accessible to those it’s intended to serve.
Stable income
Applicants are required to demonstrate a stable and dependable income, typically for at least 24 months, before applying. This helps ensure borrowers can maintain their loan payments.
Creditworthiness
Although USDA loans are known for their flexible credit requirements, creditworthiness is still important. Lenders usually seek a minimum credit score of 640 for guaranteed loans, with USDA Direct Loans potentially having more lenient criteria.
Debt-to-income ratio
Your monthly debt, including future mortgage payments, generally should not exceed 41% of your gross monthly income. However, lenders may make exceptions based on credit score and available cash reserves.
Citizenship status
Applicants need to be U.S. citizens, U.S. non-citizen nationals, or qualified aliens with a valid Social Security number to qualify for a USDA loan.
USDA loan eligibility map
The USDA eligibility map is a valuable online resource for potential borrowers. It helps them identify if a property is situated in an area of rural America that qualifies for USDA home loans.
Verify your USDA loan eligibility. Start here
Users can enter a specific address or explore areas of the map to see if they qualify for USDA guaranteed loans or direct loans by using this interactive map.
1 Source: USDAloans.com, based on Housing Assistance Council data
USDA loan rates
Compared to other home loan programs, USDA mortgage interest rates are some of the lowest available.
Check your USDA loan rates. Start here
The VA loan, specifically tailored for veterans and service members, stands alongside the USDA loan as one of the few government-backed loan programs offering competitively low rates. Due in large part to the security that government subsidies and guarantees provide, both the USDA and VA programs are able to offer interest rates below the market average.
Other mortgage programs, like the FHA loan and conventional loan, can have rates around 0.5%–0.75% higher than USDA rates on average. That said, mortgage rates are personal. Getting a USDA loan doesn’t necessarily mean your rate will be “below-market” or match the USDA loan rates advertised.
How to get the best USDA mortgage rates
Strengthening your financial standing is essential for obtaining the best USDA loan rates. Here are some helpful techniques for improving your personal finances:
Boost your credit score.Improving your credit score is an important step toward getting the best USDA loan rates. Taking steps to improve your credit score before applying for a USDA loan often proves beneficial.
Consider a down payment. While a down payment is not required for USDA loans, it can demonstrate to the lender your commitment to repaying the loan. This could also help lenders find your application more appealing.
Minimize existing debt.Lowering your debt-to-income ratio (DTI) by paying off existing high-interest debts can make you more appealing to lenders. It demonstrates that you are capable of handling your loan and making payments on time.
Shop around for lenders.Exploring loan options with multiple participating lenders is a smart move that can save you thousands of dollars over the life of the loan. Comparing their interest rates, fees, closing costs, and loan terms can help you identify the most appealing offer. It’s possible that first-time home buyers will find better options than what USDA loans can offer.
USDA loan costs
When it comes to financing a home purchase with a USDA loan, it’s not just the mortgage rate that you need to consider. You’ll be responsible for various fees and costs, which can add up over time. Understanding these costs upfront can help you make a more informed decision and plan your budget accordingly.
Here’s a breakdown of the expenses you can expect:.
USDA mortgage insurance
The USDA guarantees its mortgage loans, meaning it offers protection to approved mortgage lenders in case borrowers default. But the program is partially self-funded. To keep this loan program running, the USDA charges homeowner-paid mortgage insurance premiums.
Verify your USDA loan eligibility. Start here
Upfront guarantee fee
One of the first costs you’ll encounter is the upfront guarantee fee. This fee is a percentage of the loan amount and is required by the USDA to secure the loan. It’s usually around 1% but can vary. You can either pay this fee upfront or roll it into the loan balance.
Annual guarantee fee
Unlike conventional loans that may not require mortgage insurance, USDA loans come with a monthly mortgage insurance premium. You can expect to pay a 0.35% annual guarantee fee based on the remaining principal balance each year.
The annual fee is broken into 12 installments and included in your regular mortgage payment.
As a real-life example, a home buyer with a $100,000 loan size would have a $1,000 upfront mortgage insurance cost plus a monthly payment of $29.17 for the annual mortgage insurance. USDA upfront mortgage insurance is not paid in cash. It’s added to your loan balance, so you pay it over time.
Inspection fees
Before the loan is approved, the property will need to be inspected to ensure it meets USDA property eligibility requirements. This inspection can cost anywhere from $300 to $500, depending on the location and size of the home.
Closing Costs
Closing costs are a mix of fees that include loan origination fees, appraisal fees, title search fees, and more. These costs can range from 2% to 5% of the home’s purchase price. Some of these costs can be rolled into the loan amount, but it’s best to be prepared to pay some of them out-of-pocket.
How to apply for a USDA home loan
Qualifying for a USDA home loan can be a great way to finance a home, especially if you’re looking to buy in a rural area. These loans offer attractive benefits like zero down payments and competitive interest rates.
However, the USDA loan approval process involves several steps and specific eligibility criteria. Here’s a guide on how to apply for a USDA home loan.
Check your USDA loan eligibility. Start here
Step 1: Check your eligibility
Before diving into the application process, it’s important to determine if you meet the USDA’s eligibility requirements. These typically include:
A minimum credit score of 640
A debt-to-income (DTI) ratio of up to 41%
Income limitations, which vary by location and household size
The property must be located in a USDA-eligible area
Step 2: Gather necessary documentation
You’ll need to provide various documents to prove your eligibility, including:
Proof of income eligibility (e.g., pay stubs, tax returns)
Employment verification
Credit history report
Personal identification (e.g., driver’s license, passport)
Step 3: Pre-Qualification
Contact a USDA-approved lender to get pre-qualified for a loan. During this qualifying process, the participating lender will review your financial situation to give you an estimate of how much you can borrow.
Check if you’re eligible for a USDA loan. Start here
Both pre-approval and pre-qualification can give you a better idea of your budget and show sellers that you are a serious buyer.
Step 4: Property search
Once pre-qualified, you can start looking for a property that meets USDA guidelines. Keep in mind that the home must be your primary residence and be located in an eligible rural area.
Working with a real estate agent who has experience with USDA loans can be a big advantage.
Step 5: USDA home loan application
After finding the right property, you’ll need to fill out the USDA loan application. Your lender will guide you through this process, which will include a more thorough review of your financial situation and the submission of additional documents.
Step 6: Property appraisal and inspection
The lender will arrange for an appraisal to ensure the property meets USDA standards. An inspection may also be required to identify any potential issues with the home.
Step 7: Loan approval and closing
Once the appraisal and inspection are complete and all documentation is verified, you’ll move on to the loan approval stage. If approved, you’ll proceed to closing, where you’ll sign all necessary paperwork and officially secure your USDA home loan.
With the loan secured and the keys in hand, you’re now ready to move into your new home!
By following these steps and working closely with a USDA-approved lender, you can navigate the USDA home loan process with confidence. Always remember to consult with your lender for the most accurate and personalized advice.
How do USDA loans compare to conventional loans?
USDA loans and conventional loans both have fixed terms and interest rates, but they’re different when it comes to down payments and fees.
Down payment
USDA loans don’t ask for a down payment, unlike conventional mortgages, which usually require a 3% down payment. FHA loans require a 3.5% down payment. VA loans, like USDA loans, also don’t require a down payment.
Home appraisal
Both USDA loans and conventional loans need an appraisal from an independent third party before the loan is approved.
The home appraisal for a conventional loan determines whether the loan amount and the home’s value match. If the loan amount doesn’t measure up to the market value of the home, the lender can’t get back their money just by selling the house. If you want to know more about the home’s condition, like the roof or appliances, you need to get a home inspector.
For a USDA loan, the appraisal does two things:
Just like with a conventional loan, it makes sure the home’s value is right for the loan amount.
It checks if the home meets USDA standards. This means the home should be ready to live in. For example, the roof and heating should work properly. The appraisal also looks at whether the well and septic systems follow USDA rules.
If you’re looking for a detailed report on the house, hiring a home inspector is still a good idea.
Fees
While conventional loans charge private mortgage insurance (PMI) when you make less than a 20% down payment, this isn’t the case with USDA loans. You don’t need PMI for USDA direct or guaranteed loans.
However, USDA guaranteed loans have a guarantee fee of 1% at closing and then an annual fee of 0.35% of the loan, added to your monthly payment. You can roll the initial fee into your loan amount.
Loan terms
The term for a USDA guaranteed loan is 30 years with a fixed rate. If you get a USDA direct loan, you can have up to 33 years to pay it back. If you’re a very low-income borrower, you might get up to 38 years to make it more affordable.
FAQ: USDA loans
Verify your USDA loan eligibility. Start here
What is the USDA Rural Housing Mortgage and who is eligible for it?
The USDA Rural Housing Mortgage, officially known as the Single Family Housing Guaranteed Loan Program, is a rural development loan aimed at helping single-family home buyers. It’s often referred to as a “Section 502” loan, based on the Housing Act of 1949 that created this program. Designed to stimulate growth in less-populated and low-income areas, this rural development loan is ideal for those looking to buy in eligible rural areas with the possibility of a zero-down payment.
What is the income limit for USDA home loans?
The income limit for USDA home loans is based on your area’s median income. To be eligible for a USDA loan, you can’t exceed the median income by more than 15 percent. For example, if the median salary in your city is $65,000 per year, you could qualify for a USDA loan with a salary of $74,750 or less.
Do USDA loans take longer to close?
USDA lenders have to send each loan file to the Department of Agriculture for approval before underwriting. This can add around two to three weeks to your loan processing time.
Can I do a cash-out refinance with the USDA program?
No, cash-out refinancing is not allowed in the USDA Rural Housing Program. Its loans are for home buying and rate-and-term refinances only.
What’s the maximum USDA mortgage loan size?
The USDA does not set loan limits, but your household income and debt-to-income ratio have a limit on the amount you can borrow. The USDA typically caps debt-to-income ratios at 41 percent. However, the program may be more lenient for borrowers with a credit score over 660 and stable employment or who show a demonstrated ability to save.
Where can I find a USDA loan lender, and what loan terms are available?
You can find a USDA loan lender by visiting the U.S. Department of Agriculture’s website, which maintains a list of approved lenders for the Rural Housing Program. The USDA Rural Housing loan offers a 30-year fixed-rate mortgage only, with no 15-year fixed option or adjustable-rate mortgage (ARM) program available.
Can I receive a gift or have the seller pay for my closing costs with a USDA loan?
Yes, USDA rural development loans allow both gifts from family members and non-family members for closing costs. Inform your loan officer as soon as possible if you’ll be using gifted funds, as it requires extra documentation and verification from the lender. Additionally, the USDA Rural Housing Program permits sellers to pay closing costs for buyers through seller concessions. These concessions may cover all or part of a purchase’s state and local government fees, lender costs, title charges, and various home and pest inspections.
Can I use the USDA loan for a vacation home, investment property, or working farm?
No, the USDA loan program is designed specifically for primary residences and cannot be used for vacation homes, investment properties, or working farms. The Rural Housing Program focuses on residential property financing.
Am I eligible for the USDA if I recently returned to work or am self-employed?
If you are a W-2 employee, you are eligible for USDA financing immediately, as there’s no job history requirement. However, if you have less than two years in a job, you may not be able to use your bonus income for qualification purposes. Self-employed individuals can also use the USDA Rural Housing Program. To verify your self-employment income, you will need to provide two years of federal tax returns, similar to the requirements for FHA and conventional financing.
Can I use the USDA loan program for home repairs, improvements, accessibility, and energy-efficiency upgrades?
Yes, the USDA loan program can be used for various purposes, including making eligible repairs and improvements to a home (such as replacing windows or appliances, preparing a site with trees, walks, and driveways, drawing fixed broadband service, and connecting utilities), permanently installing equipment to assist household members with physical disabilities, and purchasing and installing materials to improve a home’s energy efficiency (including windows, roofing, and solar panels).
Can a non-citizen qualify for a USDA loan?
Yes, along with U.S. citizens, legal permanent residents of the United States can also apply for a USDA loan.
Today’s USDA mortgage rates
USDA mortgage interest rates consistently rank among the lowest in the market, next to VA loans.
USDA loans can be particularly attractive to borrowers seeking optimal financial terms, especially in an environment with elevated interest rates. Prospective homebuyers who meet the criteria for a USDA loan may be able to secure a great deal right now.
To find out whether you qualify for one and what your rate is, consult with a trusted lender below.
Time to make a move? Let us find the right mortgage for you
1 Source: USDAloans.com, based on Housing Assistance Council data
Michael Hild, who served as CEO of now-defunct reverse mortgage lender Live Well Financial, is seeking a one-year delay of a deadline to file a motion for a new trial based on what his attorney describes as “new evidence.” This is according to court documents reviewed by RMD.
After his arrest by the FBI in 2019 and a protracted trial process, the jury hearing the case determined in April 2021 that Hild participated in an effort to fraudulently inflate the value of the company’s bonds by approximately $200 million in order to allow it to borrow more money.
More than a year later, Hild was sentenced to a prison term of 44 months by presiding Judge Ronnie Abrams in the Southern District Court of New York (SDNY), but he remains free pending an appeal of the conviction.
Following a process to determine restitution to the financial companies that were victimized by the scheme, the magistrate judge overseeing the case ultimately recommended that Hild pay more than $46 million. Hild and his legal team have consistently maintained that the restitution figure should be lower and, in the case of some companies, should be $0.
Now, Hild’s attorney has submitted a court filing requesting a one-year extension of the deadline for another trial to include new evidence. Although the letter does not specifically mention what the new evidence is, the attorney indicated that it came to light during the restitution proceedings.
“[I]ssues related to sentencing currently are pending before this Court, and indeed, new evidence that could serve as a basis for a new trial motion recently was produced by the government in connection with the restitution proceedings, including in October 2023, December 2023, and January 2024, when Magistrate Judge Parker held an evidentiary hearing on restitution,” the letter reads.
The letter also states that Hild has not yet determined whether he will file for a new trial, but the current deadline to do so is April 30, 2024. Hild’s attorney conferred with the government on the matter and says it “objects to this request.” The government has yet to file a formal motion explaining its objections.
Prior to his sentencing in January 2023, Hild was denied a previous motion for acquittal or a new trial by Abrams.
National mortgage rates fell on all loan terms compared to a week ago, according to rate data collected by Bankrate. Rates for 30-year fixed, 15-year fixed, 5/1 ARMs and jumbo loans all receded.
While it’s expected that rates will gradually come down this year, there may be some fluctuations.
At its Jan. 31 meeting, the Federal Reserve announced it would hold off changing rates, but could cut rates in the future. At their March 20th meeting, the Fed will update their outlook on rates. Rate fluctuations affect many areas of the economy, including the 10-year Treasury, a key benchmark for fixed-rate mortgages.
“Where the 10-Year Treasury yield goes, mortgage rates will follow,” says Ken Johnson of Florida Atlantic University. “In roughly the last two months, the 10-year Treasury yield is up 50 basis points. Depending on the source, the 30-year mortgage rate is up 48 basis points. Treasurys’ path remains a coin toss at this point.”
Rates last updated March 13, 2024.
The rates listed here are averages based on the assumptions shown here. Actual rates displayed within the site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Wednesday, March 13th, 2024 at 7:30 a.m.
30-year mortgage rate retreats, -0.21%
Today’s average 30-year fixed-mortgage rate is 6.90 percent, a decrease of 21 basis points from a week ago. A month ago, the average rate on a 30-year fixed mortgage was higher, at 7.30 percent.
At the current average rate, you’ll pay $658.60 per month in principal and interest for every $100,000 you borrow. That represents a decline of $14.11 over what it would have been last week.
Most mortgage lenders defer to the 30-year, fixed-rate mortgage as the go-to for most borrowers because it allows the borrower to disperse payments out over 30 years, keeping their monthly payment lower.
15-year mortgage rate moves lower, -0.16%
The average rate for a 15-year fixed mortgage is 6.49 percent, down 16 basis points over the last week.
Monthly payments on a 15-year fixed mortgage at that rate will cost roughly $871 per $100,000 borrowed. That may put more pressure on your monthly budget than a 30-year mortgage would, but it comes with some big advantages: You’ll come out several thousand dollars ahead over the life of the loan in total interest paid and build equity much more rapidly.
5/1 ARM dips, -0.23%
The average rate on a 5/1 adjustable rate mortgage is 6.46 percent, ticking down 23 basis points since the same time last week.
Adjustable-rate mortgages, or ARMs, are mortgage loans that come with a floating interest rate. In other words, the interest rate will change at regular intervals, unlike fixed-rate mortgages. These loan types are best for people who expect to refinance or sell before the first or second adjustment. Rates could be substantially higher when the loan first adjusts, and thereafter.
While borrowers shunned ARMs during the pandemic days of super-low rates, this type of loan has made a comeback as mortgage rates have risen.
Monthly payments on a 5/1 ARM at 6.46 percent would cost about $629 for each $100,000 borrowed over the initial five years, but could increase by hundreds of dollars afterward, depending on the loan’s terms.
Jumbo mortgage moves lower, -0.17%
The average jumbo mortgage rate is 7.04 percent, down 17 basis points since the same time last week. This time a month ago, the average rate for jumbo mortgages was higher at 7.37 percent.
At the current average rate, you’ll pay $667.99 per month in principal and interest for every $100,000 you borrow. Compared with last week, that’s $11.48 lower.
Refinance rates
30-year fixed-rate refinance eases, -0.21%
The average 30-year fixed-refinance rate is 6.84 percent, down 21 basis points over the last seven days. A month ago, the average rate on a 30-year fixed refinance was higher at 7.31 percent.
At the current average rate, you’ll pay $654.59 per month in principal and interest for every $100,000 you borrow. Compared with last week, that’s $14.07 lower.
Where are mortgage rates going?
With inflation still above the Fed’s 2 percent goal and the job market holding strong, the Fed isn’t likely to cut rates at its March meeting.
“The Federal Reserve will not cut interest rates in the first half of this year, in my view,” says Lawrence Yun, chief economist of the National Association of Realtors, “but rate cuts of three, four or even five rounds will be possible in the second half of the year as rent measures will be much more well-behaved.”
The rates on 30-year mortgages mostly follow the 10-year Treasury, which shifts continuously as economic conditions dictate, while the cost of variable-rate home loans mirror the Fed’s moves.
These broader factors influence overall rate movement. As a borrower, you could be quoted a higher or lower rate compared to the trend.
What today’s rates mean for your mortgage
While mortgage rates change daily, it’s unlikely we’ll see rates back at 3 percent anytime soon. If you’re shopping for a mortgage now, it might be wise to lock your rate when you find an affordable loan. If your house-hunt is taking longer than anticipated, revisit your budget so you’ll know exactly how much house you can afford at prevailing market rates.
Keep in mind: You could save thousands over the life of your mortgage by getting at least three loan offers, according to Freddie Mac research. You don’t have to stick with your bank or credit union, either. There are many types of mortgage lenders, including online-only and local, smaller shops.
“All too often, some [homebuyers] take the path of least resistance when seeking a mortgage, in part because the process of buying a home can be stressful, complicated and time-consuming,” says Mark Hamrick, senior economic analyst for Bankrate. “But when we’re talking about the potential of saving a lot of money, seeking the best deal on a mortgage has an excellent return on investment. Why leave that money on the table when all it takes is a bit more effort to shop around for the best rate, or lowest cost, on a mortgage?”
More on current mortgage rates
Methodology
Bankrate displays two sets of rate averages that are produced from two surveys we conduct: one daily (“overnight averages”) and the other weekly (“Bankrate Monitor averages”).
The rates on this page represent our overnight averages. For these averages, APRs and rates are based on no existing relationship or automatic payments.
Learn more about Bankrate’s rate averages, editorial guidelines and how we make money.
Editor’s Note: Parts of this story were auto-populated using data from Curinos, a mortgage research firm that collects data from more than 250 lenders. For more details on how we compile daily mortgage data, check out our methodology here.
Mortgage rates remain above 7%, according to data from Curinos analyzed by MarketWatch Guides. The 30-year fixed-rate mortgage is 7.17% today, down-0.21 percentage points from last week.
With mortgage rates above 7% and home prices showing no signs of dropping, home affordability has continued to decline, according to the Mortgage Bankers Association (MBA). An MBA report published last week showed that the median monthly payment for new home purchases in the U.S. increased to $2,134 in January – up 4% from the month before.
Prospective home buyers may see rates drop more substantially this year, however. The Federal Reserve board previously indicated that it expects three rate cuts throughout 2024 and their next meeting is scheduled for March 19-20.
Here are today’s average mortgage rates:
30-year fixed mortgage rate: 7.17%
15-year fixed mortgage rate: 6.53%
5/6 ARM mortgage rate: 6.93%
Jumbo mortgage rate: 7.02%
Current Mortgage Rates
Product
Rate
Last Week
Change
30-Year Fixed Rate
7.17%
7.38%
-0.21
15-Year Fixed Rate
6.53%
6.72%
-0.19
5/6 ARM
6.93%
7.02%
-0.09
7/6 ARM
7.09%
7.23%
-0.14
10/6 ARM
7.24%
7.35%
-0.11
30-Year Fixed Rate Jumbo
7.02%
7.17%
-0.15
30-Year Fixed Rate FHA
6.96%
7.17%
-0.21
30-Year Fixed Rate VA
6.98%
7.16%
-0.18
Disclaimer: The rates above are based on data from Curinos, LLC. All rate data is accurate as of Friday, March 08, 2024. Actual rates may vary.
>> View historical mortgage rate trends
Mortgage Rates for Home Purchase
30-year fixed-rate mortgages are down, -0.21
The average 30-year fixed-mortgage rate is 7.17%. Since the same time last week, the rate is down, changing -0.21 percentage points.
At the current average rate, you’ll pay $676.76 per month in principal and interest for every $100,000 you borrow. You’re paying less compared to last week when the average rate was 7.38%.
15-year fixed-rate mortgages are down, -0.19
The average rate you’ll pay for a 15-year fixed-mortgage is 6.53%, a decrease of-0.19 percentage points compared to last week.
Monthly payments on a 15-year fixed-mortgage at a rate of 6.53% will cost approximately $872.76 per $100,000 borrowed. With the rate of 6.72% last week, you would’ve paid $883.25 per month.
5/6 adjustable-rate mortgages are down, -0.09
The average rate on a 5/6 adjustable rate mortgage is 6.93%, a decrease of-0.09 percentage points over the last seven days.
Adjustable-rate mortgages, commonly referred to as ARMs, are mortgages with a fixed interest rate for a set period of time followed by a rate that adjusts on a regular basis. With a 5/6 ARM, the rate is fixed for the first 5 years and then adjusts every six months over the next 25 years.
Monthly payments on a 5/6 ARM at a rate of 6.93% will cost approximately $660.61 per $100,000 borrowed over the first 5 years of the loan.
Jumbo loan interest rates are down, -0.15
The average jumbo mortgage rate today is 7.02%, a decrease of-0.15 percentage points over the past week.
Jumbo loans are mortgages that exceed loan limits set by the Federal Housing Finance Agency (FHFA) and funding criteria of Freddie Mac and Fannie Mae. This generally means that the amount of money borrowed is higher than $726,200.
Product
Monthly P&I per $100,000
Last Week
Change
30-Year Fixed Rate
$676.76
$691.02
-$14.26
15-Year Fixed Rate
$872.76
$883.25
-$10.49
5/6 ARM
$660.61
$666.65
-$6.04
7/6 ARM
$671.36
$680.82
-$9.46
10/6 ARM
$681.50
$688.97
-$7.47
30-Year Fixed Rate Jumbo
$666.65
$676.76
-$10.11
30-Year Fixed Rate FHA
$662.62
$676.76
-$14.14
30-Year Fixed Rate VA
$663.96
$676.08
-$12.12
Note: Monthly payments on adjustable-rate mortgages are shown for the first five, seven and 10 years of the loan, respectively.
Factors That Affect Your Mortgage Rate
Mortgage rates change frequently based on the economic environment. Inflation, the federal funds rate, housing market conditions and other factors all play into how rates move from week-to-week and month-to-month.
But outside of macroeconomic trends, several other factors specific to the borrower will affect the mortgage interest rate. They include:
Financial situation: Mortgage lenders use past financial decisions of borrowers as a way to evaluate the risk of loaning money.
Loan amount and structure: The amount of money that bank or mortgage lender loans and its structure (including both the term and whether its a fixed-rate or adjustable-rate).
Location: Mortgage rates vary by where you are buying a home. Areas with more lenders, and thus more competition, may have lower rates. Foreclosure laws can also impact a lender’s risk, affecting rates.
Whether borrowers are first-time homebuyers: Oftentimes first-time homebuyer programs will offer new homeowners lower rates.
Lenders: Banks, credit unions and online lenders all may offer slightly different rates depending on their internal determination.
How To Shop for the Best Mortgage Rate
Comparison shopping for a mortgage can be overwhelming, but it’s shown to be worth the effort. Homeowners may be able to save between $600 and $1,200 annually by shopping around for the best rate, researchers found in a recent study by Freddie Mac. That’s why we put together steps on how to shop for the best mortgage rate.
1. Check credit scores and credit reports
A borrower’s credit situation will likely determine the type of mortgage they can pursue, as well as their rate. Conventional loans are typically only offered to borrowers with a credit score of 620 or higher, while FHA loans may be the best option for borrowers with a FICO score between 500 and 619. Additionally, individuals with higher credit scores are more likely to be offered a lower mortgage interest rate.
Mortgage lenders often review scores from the three major credit bureaus: Equifax, Experian and TransUnion. By viewing your scores ahead of lenders considering you for a loan, you can check for errors and even work to improve your score by paying down balances and limiting new credit cards and loans.
2. Know the options
There are four standard mortgage programs: conventional, FHA, VA and USDA. To get the best mortgage rate and increase your odds of approval, it’s important for potential borrowers to do their research and apply for the mortgage program that best fits their financial situation.
The table below describes each program, highlighting minimum credit score and down payment requirements.
Though conventional mortgages are most common, borrowers will also need to consider their repayment plan and term. Rates can be either fixed or adjustable and terms can range from 10 to 30 years, though most homeowners opt for a 15- or 30-year mortgage.
3. Compare quotes across multiple lenders
Shopping around for a mortgage goes beyond comparing rates online. We recommend reaching out to lenders directly to see the “real” rate as figures listed online may not be representative of a borrower’s particular situation. While most experts recommend getting quotes from three to five lenders, there is no limit on the number of mortgage companies you can apply with. In many cases, lenders will allow borrowers to prequalify for a mortgage and receive a tentative loan offer with no impact to their credit score.
After gathering your loan documents – including proof of income, assets and credit – borrowers may also apply for pre-approval. Pre-approval will let them know where they stand with lenders and may also improve negotiating power with home sellers.
4. Review loan estimates
To fully understand which lender is offering the cheapest loan overall, take a look at the loan estimate provided by each lender. A loan estimate will list not only the mortgage rate, but also a borrower’s annual percentage rate (APR), which includes the interest rate and other lender fees such as closing costs and discount points.
By comparing loan estimates across lenders, borrowers can see the full breakdown of their possible costs. One lender may offer lower interest rates, but higher fees and vice versa. Looking at the loan’s APR can give you a good apples-to-apples comparison between lenders that takes into account both rates and fees.
5. Consider negotiating with lenders on rates
Mortgage lenders want to do business. This means that borrowers may use competing offers as leverage to adjust fees and interest rates. Many lenders may not lower their offered rate by much, but even a few basis points may save borrowers more than they might think in the long run. For instance, the difference between 6.8% and 7.0% on a 30-year, fixed-rate $100,000 mortgage is roughly $5,000 over the life of the loan.
Expert Forecasts for Mortgage Rates
Mortgage rates have cooled significantly over the past several months. After the 30-year fixed-rate mortgage hit 8% last October, it ended 2023 closer to 7%. In fact, the average for Q4 2023 was 7.3%.
Analysts with Fannie Mae and the Mortgage Bankers Association (MBA) both project that rates will fall going into 2024 and throughout next year.
Fannie Mae economists expect rates to drop more quickly, falling below 6% by Q4 2024. Meanwhile, the MBA’s forecast for Q4 2024 is 6.1% and 5.9% for Q1 2025.
More Mortgage Resources
Methodology
Every weekday, MarketWatch Guides provides readers with the latest rates on 11 different types of mortgages. Data for these daily averages comes from Curinos, LLC, a leading provider of mortgage research that collects data from more than 250 lenders. For more details on how we compile daily mortgage data, check out our comprehensive methodology here. Editor’s Note: Before making significant financial decisions, consider reviewing your options with someone you trust, such as a financial adviser, credit counselor or financial professional, since every person’s situation and needs are different.
If you’re like most people embarking on a home-buying journey, one of your first steps will be finding a mortgage lender. There’s a lot to consider when it comes to choosing the right one — everything from interest rates, loan types and fees to service and experience.
When comparing lenders, it’s worth taking your time and choosing carefully. Purchasing a home is a big step, and you want a knowledgeable lending partner by your side as you weigh your financing options and navigate the paperwork involved. A good mortgage lender is a valuable resource and can make the home-buying process easier and less stressful. Let’s take a look at the steps you can take to find the right lender fit for you.
How to Find a Mortgage Lender
There are several types of lenders you can look to for securing your home loan, with the most popular being direct lenders and mortgage brokers.
Direct lenders. Banks, credit unions and mortgage companies are considered direct lenders and handle the entire mortgage process from origination to closing.
Mortgage brokers. Mortgage brokers work independently with a variety of loan originators, including direct lenders, to help clients find a mortgage that fits their needs.
Which type of mortgage lender you choose depends on your personal preference, the type of loan you’re looking for and your financial situation. There are many factors to consider when comparing your options. While interest rates are certainly a big one, there are other things to think about, such as fees, loan products, the process and the lender’s experience and reputation.
Here are some tips for choosing the right lender and how to best set yourself up for mortgage success.
Starting the Loan Certification Process
When choosing a lender, look for one that offers a written letter or certification you can provide to sellers to let them know you are qualified. This gives you a clear picture of your buying power and can help you make a stronger offer on a home. When you work with a lender that provides this, you’re doing much of the legwork involved in obtaining a mortgage contract without actually finalizing it.
Choosing Pennymac as your lender gives you access to our unique BuyerReady Certification process. This certification gets you even closer to your new home by confirming precisely how much of a mortgage you will qualify for.
While a BuyerReady Certification does not guarantee a closing, it is a conditional approval based on the information you provide us through the formal loan process. You’ll have peace of mind knowing your borrowing limit and be able to show realtors and sellers that you’re serious about purchasing. To receive a Pennymac BuyerReady Certification, you’ll submit a mortgage application and financial documents, which a Pennymac Loan Expert will review.
Here are some of the benefits of having a BuyerReady Certification:
Shows sellers, realtors and lenders that you’re a serious homebuyer
Helps inform your decision-making in terms of how much you can spend on a home and the types of financing you’ll be able to qualify for
Gives you a competitive advantage over homebuyers who don’t have it
Important Mortgage Considerations
Whether you begin your hunt for the perfect lender and loan by visiting your local bank, searching online or surveying your family and friends, here are some key factors you’ll want to consider.
Interest Rates
Interest rates are among the most important factors to consider when comparing lenders. Your interest rate will determine how much you have to pay for your home loan, so take time to do the math when examining your options. Even a seemingly small difference between rates, such as an additional .5%, can add up to a considerable increase in your monthly payment. Over a 30-year term, you could be paying tens of thousands of dollars more in interest.
While interest rates aren’t the only factor to look at when choosing a lender, they are a significant one. Select a lender that offers a range of competitive rates and terms and will quickly lock in a rate when you find the one that works best for your budget.
Down Payment and Mortgage Insurance
Most, but not all, home loans will require a down payment. A home down payment is money paid upfront for the home at closing and is a percentage of the home’s purchase price.
A conventional fixed-rate mortgage may require a down payment of as little as 3%. A Federal Housing Administration (FHA) mortgage has a minimum down payment of 3.5%, while the U.S. Department of Veterans Affairs offers loans with 0% down.
When comparing mortgage lenders, be sure to inquire about which loans they offer, especially if you’re interested in a non-conventional loan, such as a FHA or VA loan.
Keep Mortgage Insurance in Mind
While there is flexibility in how much of a down payment you make, if you have a conventional loan and do not put at least 20% down, you’ll have to pay for private mortgage insurance (PMI). This is a policy that protects your lender if you fall behind on your payments or end up in foreclosure. It is paid monthly on top of your regular mortgage payment.
Lenders partner with certain PMI providers and may use different calculations to determine your PMI premium. If you anticipate that you’ll be paying PMI, be sure to factor those premium charges into your cost comparisons. Conventional mortgage insurance can be priced quite aggressively, especially if the borrower has a solid credit score. It’s a great option for those who want to keep cash in the bank for investing and/or reserves.
If you opt for an FHA loan, mortgage insurance — similar to PMI — is always required at first. How much and how long you’ll have to pay the extra monthly premium depends on the amount of your down payment. VA loans do not require any type of mortgage insurance but may have other mandatory fees.
Fees
When comparing lenders, you’ll want to specifically evaluate rates, as well as origination fees and discount points, which can vary depending on who you choose. The homebuyer usually pays the fees, although sometimes a seller will agree to a concession and pay for some. Don’t be afraid to negotiate any closing costs. See if the lender you’re considering will work with you to reduce some fees or make other favorable compromises.
Prepare for Meeting with a Loan Officer
Once you find a prospective lender, you’ll meet with a loan officer or expert in person, through email or over the phone to discuss your mortgage options. Your loan officer will help determine your short and long-term goals with your home purchase and offer options to tailor your loan to your current financial situation. This meeting will provide a foundation for your loan officer to match you with a home loan that meets your needs.
Being prepared will help you make the most of your meeting and facilitate the mortgage process. Before meeting with your loan officer, here are some things you can do.
Improve Your Credit Score
Your credit score is a major factor in determining what kind of loans you may qualify for and your interest rate. A lender will want to be confident that you’ll be able to repay your loan. Your credit score is based on the data in your credit report and is a numerical rating based on your credit history. It takes the following into account:
Your bill-paying history
Total amount of current unpaid secured and unsecured debt
Your open loan accounts
How long you have had your loan accounts open
Credit account limits
Collections, charge-offs and any derogatory debt
Typically, the higher your credit score, the more loan options you will have. A lower credit score can mean that mortgage choices may be limited to non-conventional loans with broader qualification requirements.
The following are three steps you can take to help boost your credit score:
Check your credit report. Request free credit reports from each major credit bureau (Equifax, TransUnion and Experian) and review them for accuracy.
Pay bills on time. Late payments for credit cards and personal or auto loans can negatively impact your credit score. Making consistent on-time payments is one of the most influential credit score factors. If this is an area of concern, consider setting up automatic payments and commit to paying at least the minimum amount due each month.
Reduce credit utilization ratio (CUR). Demonstrate responsible credit management by lowering your credit card balances as much as possible. Try to keep your credit utilization ratio below 30%, which indicates that you are using a smaller portion of your available credit. Calculate your CUR as follows: Credit Utilization Ratio = (Total Outstanding Balances on Credit Accounts/Available Credit/Total Credit Limit on Accounts) x 100.
Organize Your Finances and Documents
To prepare for your loan officer meeting, determine how much money you have for a down payment, as this will be important when evaluating your loan options and monthly payments. You will also be required to submit numerous financial documents, including:
Photo ID
Pay stubs
Tax returns and W-2s and/or 1099s
Bank statements
All the paperwork may not be necessary during your initial meeting. Still, a jumpstart on document-gathering can help streamline the mortgage application process when your loan officer is ready to review them.
Understand Which Loan Is Right for You
While your lender will look at your complete financial picture before presenting — and explaining — your mortgage options, it is a good idea to have a basic understanding of the choices available. The following are the most common types of home purchase loans:
Each type of loan has its benefits and qualification requirements. When comparing home loans, you’ll want to think about:
How long you intend to stay in the loan
Your down payment and credit score
Your income stability
How much you intend to borrow
How long you plan to stay in and/or own the home
Your future plans, e.g., will you need more space for children or aging parents?
Your budget
Assess Your Budget
After you apply for your mortgage, you’ll go through the underwriting process, whereby all your financial documents will be examined and verified. Because the loan officer will ultimately determine how much you can borrow based on your budget, it’s crucial to provide them with the most accurate information upfront during the application process. Providing inaccurate information before going into processing can impact your qualification on the back end. Taking these steps before your loan officer meeting may help improve your chances that you’ll receive a loan approval:
Review your debt-to-income ratio (DTI) with a licensed loan officer. Your DTI is determined by how much recurring monthly debt you have compared to your monthly gross income. Look at your credit card and loan payments. Having less of your monthly income allocated to debt is a positive indicator of being able to qualify for a loan.
Establish how much you can put down on a home. The higher your down payment, the less you’ll have to borrow.
Determine how much you can afford to pay every month. Your new home expenses are not limited to your mortgage. Consider other costs such as:
Closing costs
Insurance
Property taxes
Potentially higher utility expenses
Any applicable mortgage insurance
Homeowners association fees
You’ll also want to think about how your new mortgage will affect your long-term savings goals, such as saving for retirement or your child’s education.
Questions to Ask the Loan Officer
Whether you’re a first-time homebuyer or a seasoned homeowner, the mortgage process may seem a bit overwhelming. Meeting with a licensed loan officer is an opportunity to get your questions answered so you can better understand the process, the loans available and the fees involved.
The following questions are a starting point for gathering information from your loan officer:
What types of home loans do you offer? Which do you think would best fit my needs?
What are the loan rates, terms and eligibility requirements?
What is the required minimum down payment amount for the different loan options?
Will my loan require mortgage insurance?
Is there a prepayment penalty if I want to pay off my loan early?
Do you offer a letter, certification, pre-approval or something similar I can provide sellers to validate my qualifications?
What will my closing costs be?
Can I lock in my interest rate?
Who will be my primary contact? Will it be you or someone else once the loan moves to underwriting?
Can I buy discount mortgage points? How long will it take to recoup them?
These are fees paid at closing that can help you lower your monthly mortgage payment.
How long is the mortgage process? When can I expect to close?
Will the loan closing take place in person or online?
Take your time to ask all the questions you need. A mortgage is a significant financial commitment, and you want to be confident that you’re making the most informed decision. If your loan officer is impatient or reluctant to answer your questions, that may be a sign that they’re not the right lender for you. A loan officer should be a borrower’s advocate and take the time to educate them throughout the process.
Interest Rate Lock
Mortgage rates constantly fluctuate, so asking for an interest rate lock is a smart idea if you find a good rate. An interest rate lock, also known as a locked-in rate, is a guarantee from a lender to give you a set interest rate when you apply for a mortgage. It protects borrowers against potential interest rate increases during the mortgage underwriting process.
Rates can generally be locked for an option of 30, 45, 60 or even 90 days. They are usually locked after the loan application has been reviewed and before underwriting. Lenders have different policies regarding rate locks, including fees, so inquire about policies when comparing lenders.
How Long Is the Process?
The mortgage loan timeline, consisting of a BuyerReady Certification, applying for the loan and underwriting, varies from 30 to 60 days or longer. Some factors that hinder the mortgage process include:
When borrowers do not have all their documents in order or provide inaccurate or incomplete information
When borrowers have more complex situations, such as credit issues
When lenders experience delays obtaining verifications, such as your credit history from the credit bureaus, rental records from a landlord or employment information
Stricter regulations that require lenders to accommodate more compliance checks
While some delays may be beyond your control, here are a few tips that could help expedite the loan process:
Gather as many financial documents as possible before applying for the loan
Do not omit any required information
Respond promptly to your lender’s questions or documentation requests
Stay in frequent communication with your lender and address any issues quickly
Try to avoid making any major financial changes during this time, such as changing jobs or taking on significant new debt
Get a List of All Paperwork Needed
Submitting documents is a requisite part of the home loan application and approval process. All lenders require certain documents to verify your financial and personal information to assess your creditworthiness and ability to repay your loan. The documentation will give your lender insight into your financial situation, income, assets and liabilities. While you should check with your lender to see what specific documentation they will need, at a minimum, lenders will typically ask for:
Employment verification, including pay stubs
Social Security, pension or retirement income, if retired
Evidence of any other forms of income, such as child support
Tax returns for the past two years
Bank statements for your checking and savings accounts
Statements for other assets like your investment and retirement accounts
Student loan details
Information on any debt you have, such as auto or student loans
Gift letter, if family members are contributing funds toward the down payment
Rental payment history, if applicable
There’s a lot that goes into choosing the right lender. But finding one that offers a loan that aligns with your financial goals and provides a positive borrowing experience is essential. With some due diligence, you’ll find a reputable lender to guide and support you through the mortgage process as you make the move toward your next home.
As a top national mortgage lender, Pennymac has loan experts who specialize in purchase loans to help homebuyers through the mortgage process and ensure a seamless home-buying experience. Plus, they can help you get BuyerReady Certified so you’ll know how exactly much money you can borrow and be more confident when looking for a home. Interested to learn more about what Pennymac can do for you? Get a custom instant rate quote today.