A 30-year fixed-rate mortgage is the most common type of mortgage today. Because you can pay back your home loan over 30 years and don’t have to worry about your monthly payment going up, it’s an affordable and secure option for the vast majority of homebuyers.
Still, mortgage rates are expensive right now. Average mortgage rates are well above 7% and aren’t expected to come down dramatically any time soon.
It’s always important to compare loan offers from different lenders to find the best rate and loan terms for you. Here’s what you need to know about how 30-year mortgage rates work, what factors affect them and how to find the best rates for your specific financial situation.
Current 30-year mortgage rate trends
Since the Federal Reserve kicked off its battle to curb inflation by hiking interest rates last year, mortgage rates have continued on an upward trend. Today’s homebuyers are looking at average 30-year fixed mortgage rates above 7.5%, essentially doubling from the sub-3% rates during the pandemic.
In the broader context of historical interest rates, 30-year fixed-rate mortgages are still relatively favorable. Over the past 50 years, mortgage rates have hit both high points and low points, depending on economic conditions.
So, when will mortgage rates go down? Probably not until mid-2024, according to most financial and housing market experts.
That’s because until inflation is completely under control and other economic indicators are pointing in a positive direction, the Fed isn’t expected to cut rates.
If you want to buy a home in the short term, don’t expect mortgage rates to move much. But if price growth continues to slow and the Fed can hold rates steady (and eventually cut them), mortgage rates could ease a bit.
Fannie Mae predicts the average rate for a 30-year fixed mortgage will end the year at 7.1%. That’s not a big move from where we are today, but even a decline of a few tenths of a percentage point can shave tens of thousands of dollars from your home loan over time.
Pros of a 30-year mortgage
- Lower monthly payments: Your monthly mortgage payments will be significantly lower than with a 15-year loan, offering more breathing room in your household budget.
- You can take out a larger loan: Lower monthly payments could allow the lender to approve you for a larger loan, meaning you can buy a bigger or more expensive house. Just make sure the home you buy fits into your household budget.
- Less expensive path to homeownership: A lower monthly payment will give you a better chance to find and buy a home. A conventional, 30-year mortgage term can be easier on your budget and widen the circle of potential homes to buy. You also have the option to pay more toward your principal every month to shorten the length of your loan term and help you build equity faster.
Cons of a 30-year mortgage
- Higher interest rate: Generally, the longer the term, the higher the interest rate. Because it will take you longer to pay off your loan, the bank will have you pay more in interest.
- It costs more in the long run: You will ultimately pay tens of thousands more dollars over the life of a 30-year loan than over a 15-year loan. Part of the cost is the interest you must pay for a longer period. You’ll pay 15 years of additional interest with a 30-year mortgage compared to a 15-year mortgage.
How to compare 30-year mortgage rates
In short, look at multiple lenders. It’s OK to submit multiple mortgage applications in a short period of time. The credit rating bureaus will recognize that you’re rate shopping, and though your credit score may absorb the impact of one hard credit check, it should be relatively minor.
Comparison shopping should eventually lead you to a 30-year mortgage with a competitive interest rate, though the specifics will depend on your credit score and financial situation. One important note: When comparing quotes, make apples-to-apples comparisons. You’ll need to make sure all the criteria matches, including loan term, lender fees, points and interest rate. For example, you shouldn’t compare one quote that only provides an interest rate with another that includes an APR, which incorporates a different set of fees and costs.
Different types of 30-year mortgages
There are many different types of 30-year mortgages. Here are the most common ones:
- Conventional: These loans are offered by private insurers.
- Government: These loans, which may be granted by the USDA, VA and FHA, are backed by the US government.
- Fixed-rate: Loans with an interest rate that won’t change over the life of the loan. Your payment amount will be the same every month.
- Adjustable-rate: Though your interest rate might start low at an initial fixed rate, it can change periodically based on market conditions.
- Jumbo loan: These loans accommodate amounts above the maximum allowed for a conventional loan.
How to qualify for a mortgage
Different types of mortgages have various eligibility criteria. In general, you’ll have a better chance of being approved if you meet the following requirements:
- A decent credit score. To be approved for a conventional loan, you’ll need at least a good credit score. To get the lowest interest rate, you’ll need an excellent credit score.
- An income. Showing stable employment or a regular income source will be a vital proof point required by lenders.
- A down payment. An upfront payment of 20% of the total home’s cost is widely recommended, but most lenders will require you to have a minimum down payment of just 3%. Some lenders will allow you to put even less, or nothing, down.
How to get the best 30-year mortgage rate
Developing a strong financial profile will help you get the best mortgage rate and term. It helps to have an excellent credit score, a substantial credit history and a regular source of income.
Current mortgage rates
| Product | Interest rate | APR |
|---|---|---|
| 30-year fixed-rate | 7.88% | 7.90% |
| 30-year fixed-rate FHA | 6.86% | 7.80% |
| 30-year fixed-rate VA | 7.18% | 7.30% |
| 30-year fixed-rate jumbo | 7.92% | 7.93% |
| 20-year fixed-rate | 7.80% | 7.82% |
| 15-year fixed-rate | 7.09% | 7.13% |
| 15-year fixed-rate jumbo | 7.13% | 7.15% |
| 5/1 ARM | 6.98% | 8.07% |
| 5/1 ARM jumbo | 6.92% | 7.98% |
| 7/1 ARM | 7.27% | 8.15% |
| 7/1 ARM jumbo | 7.18% | 8.01% |
| 10/1 ARM | 7.73% | 8.15% |
| 30-year fixed-rate refinance | 8.01% | 8.02% |
| 30-year fixed-rate FHA refinance | 6.95% | 7.90% |
| 30-year fixed-rate VA refinance | 7.17% | 7.38% |
| 30-year fixed-rate jumbo refinance | 8.06% | 8.07% |
| 20-year fixed-rate refinance | 8.00% | 8.02% |
| 15-year fixed-rate refinance | 7.38% | 7.40% |
| 15-year fixed-rate jumbo refinance | 7.45% | 7.47% |
| 5/1 ARM refinance | 6.93% | 7.91% |
| 5/1 ARM jumbo refinance | 7.08% | 7.72% |
| 7/1 ARM refinance | 7.23% | 8.10% |
| 7/1 ARM jumbo refinance | 7.14% | 7.96% |
| 10/1 ARM refinance | 7.81% | 8.16% |
Updated on November 14, 2023.
We use information collected by Bankrate, which is owned by the same parent company as CNET, to track daily mortgage rate trends. The above table summarizes the average rates offered by lenders across the country.
FAQs
It’s a loan you take out to buy a house that you pay back over 30 years. Most 30-year mortgages have a fixed rate that never changes, so you’ll have the same monthly payment over the life of the loan. That’s why it’s important to lock in the best rate possible when you apply for a mortgage.
Though sometimes used interchangeably, these two terms are different. The interest rate is the percentage of a loan you’ll pay to the lender in exchange for borrowing money. With a mortgage, your monthly payment includes interest due.
The annual percentage rate, however, is typically higher than an interest rate because it includes all the costs of borrowing money including fees, discount points and private mortgage insurance (if applicable). Learn more about the difference between interest rate and APR.
Mortgage rates fluctuate, so the lowest rate you see today might change by tomorrow. By comparing the rates of different lenders, you should be able to find a competitive rate based on your credit score and financial situation.
Your credit score, debts, loan-to-value ratio and economic factors all play a role in determining your mortgage rate.
Your credit score is one of the first things mortgage lenders will look at. You usually need a credit score of at least 740 to secure the lowest mortgage rates. Lenders will also scrutinize your debts and monthly expenses to make sure you can afford to pay your mortgage every month. Try to pay down any high-interest debt, like credit cards, before applying for a home loan. Another factor is your loan-to-value ratio, which is calculated by dividing how much of the loan you still need to pay off by your home’s value.
In addition, 30-year mortgage rates are determined by a number of economic factors outside a homebuyer’s control, such as Federal Reserve policy, inflation and the job market.
The best way to find a low rate is to shop around with different mortgage lenders and see who offers you the best rate. You should talk to at least two or three lenders before making a decision. With online lending, you have more options to compare rates and find a lender you feel comfortable with.
Refinancing is an option for people who have built up equity in their home by making consistent mortgage payments over the years. When you refinance your home loan, you’re taking out a new loan at a better interest rate to replace your old mortgage.
If you’ve only had your mortgage for a few years and have less than 20% equity in your home, the numbers may not work out in your favor. That’s because if your loan-to-value ratio is too high, you’ll only end up paying more interest over a longer period of time, defeating the purpose of refinancing to begin with.
You can use CNET’s mortgage calculator to help you determine how much house you can afford. CNET’s mortgage calculator considers things like your monthly income, expenses and debt payments to give you an idea of what you can manage financially. Your mortgage rate will depend on those factors, as well as your credit score and the ZIP code where you’re looking to buy a house.
