| National Averages of Lenders' Best Rates - Refinance |
|---|
| Loan Type | Refinance Rates | Daily Change |
|---|
| 30-Year Fixed | 7.71% | +0.06 |
| FHA 30-Year Fixed | 7.60% | -0.05 |
| VA 30-Year Fixed | 7.54% | -0.01 |
| Jumbo 30-Year Fixed | 6.83% | +0.13 |
| 20-Year Fixed | 7.25% | +0.06 |
| 15-Year Fixed | 6.77% | +0.03 |
| FHA 15-Year Fixed | 6.95% | No Change |
| Jumbo 15-Year Fixed | 6.66% | No Change |
| 10-Year Fixed | 6.70% | +0.04 |
| 10/6 ARM | 7.66% | +0.02 |
| 7/6 ARM | 7.68% | -0.02 |
| Jumbo 7/6 ARM | 6.55% | +0.12 |
| 5/6 ARM | 7.71% | +0.01 |
| Jumbo 5/6 ARM | 6.55% | +0.12 |
Calculate monthly payments for different loan scenarios with our Mortgage Calculator.
The rates you see here generally won’t compare directly with teaser rates you see advertised online, since those rates are cherry-picked as the most attractive,while these rates are averages. Teaser ratesmay involve paying points in advance, or they may be selected based on a hypothetical borrower with an ultra-high credit score or taking a smaller-than-typical loan.The mortgage rate you ultimately secure will be based on factors like your credit score, income, and more, so it may be higher or lower than the averages you see here.
Lowest Mortgage Rates by State
The lowest mortgage rates available vary depending on the state where originations occur. Mortgage rates can be influenced by state-level variations in credit score, average mortgage loan type, and size, in addition to individual lenders' varying risk management strategies.
The states with the cheapest 30-year new purchase rates were Mississippi, Hawaii, Louisiana, and Vermont, while the states with the most expensive rates were Minnesota, Oregon, Montana, Nevada, and New York.
What Causes Mortgage Rates to Rise or Fall?
Mortgage rates are determined by a complex interaction of macroeconomic and industry factors, such as:
- The level and direction of the bond market, especially 10-year Treasury yields
- The Federal Reserve's current monetary policy, especially as it relates to bond buying and funding government-backed mortgages
- Competition between mortgage lenders and across loan types
Because fluctuations can be caused by any number of these at once, it's generally difficult to attribute the change to any one factor.
Macroeconomic factors kept the mortgage market relatively low for much of 2021. In particular, the Federal Reserve had been buying billions of dollars of bonds in response to the pandemic's economic pressures. This bond-buying policy is a major influencer of mortgage rates.
But starting in November 2021, the Fed began tapering its bond purchases downward, making sizable reductions each month until reaching net zero in March 2022.
Between that time and July 2023, the Fed aggressively raised the federal funds rate to fight decades-high inflation. While the fed funds rate can influence mortgage rates, it does not directly do so. In fact, the fed funds rate and mortgage rates can move in opposite directions.
But given the historic speed and magnitude of the Fed's 2022 and 2023 rate increases—raising the benchmark rate 5.25 percentage points over 16 months—even the indirect influence of the fed funds rate has resulted in a dramatic upward impact on mortgage rates over the last two years.
The Fed has opted to hold rates steady at its last four meetings, the last of which concluded Jan. 31. Though the central bank's statement signaled that we have almost certainly reached the end of Fed rate hikes in this campaign, Fed Chair Jerome Powell stated that inflation is still too high, and they will therefore proceed cautiously on deciding when to make the first rate cut. Specifically, he indicated it's unlikely they will be ready for any rate reduction by the time of their next meeting, which is scheduled for March 19–20.
After its December meeting, the Fed released quarterly data that showed almost 80% of Fed members expect there to be two to four rate cuts in 2024, with the median expectation being three rate decreases totaling 0.75%. But when in 2024 these will begin—and ultimately how many are implemented this year—is an open question at this time.
How We Track Mortgage Rates
The national averages cited above were calculated based on the lowest rate offered by more than 200 of the country's top lenders, assuming a loan-to-value ratio (LTV) of 80% and an applicant with a FICO credit score in the 700–760 range. The resulting rates are representative of what customers should expect to see when receiving actual quotes from lenders based on their qualifications, which may vary from advertised teaser rates.
For our map of the best state rates, the lowest rate currently offered by a surveyed lender in that state is listed, assuming the same parameters of an 80% LTV and a credit score between 700–760.
FAQs
There are no sources for officially projected interest rates in five years, but the Mortgage Bankers Association does predict rates on 30-year mortgages will drop to 6% by the end of 2025. Fannie Mae predicts a 6.2% rate.
How long will it take for mortgage rates to drop? ›
Predictions and future outlook for mortgage rates
The MBA forecast suggests that 30-year mortgage rates will fall to the 6.6% by the end of 2024, while Fannie Mae and NAR predict rates will end the year around 6.7%.
Why did mortgage rates drop so low? ›
While today's mortgage rates aren't as low as we saw during the early years of the pandemic, they're already down from their recent highs. Those drops have been due, in large part, to the anticipated Fed rate cuts on the horizon.
Why is my mortgage company offering me a lower rate? ›
Some lenders offer two different rates for the same mortgage loan depending on whether they plan to service your loan or sell your loan. They will actually offer you a lower rate if you are willing to have your loan transferred to another company after it closes.
Should I lock my mortgage rate today? ›
Once you find a rate that is an ideal fit for your budget, lock in the rate as soon as possible. There is no way to predict with certainty whether a rate will go up or down in the weeks or even months it sometimes takes to close your loan.
Will home loan interest rates go down in 2024? ›
Rates also increased dramatically last year, though they trended back down toward the end of 2023. As inflation comes down, mortgage rates will recede as well. Most major forecasts expect rates to go down later in 2024.
Will mortgage rates ever be 3 again? ›
Will mortgage rates ever be 3% again? A few years ago, homebuyers could take out home loans with rates between 2% and 3%. Mortgage rates will fall over the next year, but they won't reach those levels. Housing market experts say it would take a significant economic crisis for mortgage rates to drop below 3%.
What are interest rates today? ›
Current mortgage and refinance interest rates
| Product | Interest Rate | APR |
|---|
| 30-Year Fixed Rate | 6.83% | 6.88% |
| 20-Year Fixed Rate | 6.61% | 6.67% |
| 15-Year Fixed Rate | 6.27% | 6.35% |
| 10-Year Fixed Rate | 6.19% | 6.27% |
5 more rowsWhat is the current Fed interest rate? Right now, the Fed interest rate is 5.25% to 5.50%. The FOMC established that rate in late July 2023. At its most recent meeting in July, the committee decided to leave the rate unchanged.
When should interest rates drop? ›
Yun expects the 30-year rate to fall to 6.5% by the end of 2024, and 6% by the end of next year. Realtor.com's Hale expects rates to go down to the mid-6% range by the end of this year.
Mortgage rates have been historic in their own right during the past few years. The average 30-year fixed rate reached an all-time record low of 2.65% in January 2021 before surging to 7.79% in October 2023, according to Freddie Mac.
Will the Feds lower interest rates? ›
In June, the consumer price index fell to 3%, the lowest it's been in over three years. At that point, the Fed projected the fed funds rate would be cut to 5.1% by the end of 2024. The CME Group's FedWatch tool, which measures the probability of a rate adjustment, has predicted the first cut will come in September.
What not to say to a mortgage lender? ›
Here are some crazy things would-be home buyers have said to lenders, and why they're cause for concern.
- 'I need to get an extra insurance quote due to … ...
- 'I can't believe how much work the house needs before we move in' ...
- 'Please don't tell my spouse what's on my credit report'
Mortgage interest rates are not set in stone, and research confirms that those who get multiple quotes often secure lower rates. A surprising number of home buyers and homeowners, however, forego negotiations and settle with the very first lender they encounter.
What happens if the mortgage rate drops before closing? ›
Taking Advantage of a Decrease: If interest rates drop after you've locked in your rate, but before your closing, you can request a Mortgage rate float down. This means you can ask to adjust your locked rate to match the current, lower market rate.
Will mortgage rates go down in five years? ›
The mortgage rate forecast for 2024 is that rates are expected to go down, although it may take longer than had previously been hoped. In June 2024, we're seeing a mixed picture with the best mortgage rates on fixed rate mortgages; some are nudging up while others are being trimmed.
What is the interest rate forecast for the next 5 years? ›
Projected Interest Rates In The Next Five Years
ING's interest rate predictions indicate 2024 rates starting at 4%, with subsequent cuts to 3.75% in the second quarter. Then, 3.5% in the third, and 3.25% in the final quarter of 2024. In 2025, ING predicts a further decline to 3%.
What will the interest rate be in 2026? ›
While 2026 is expected to be on a par with 2025, at 1.0%. The interest rate peaked at 5.25% in 2023 and is expected to be cut to 4.75% by the end of 2024. It is expected to be cut to 4.35% by the end of 2025 and then to 3.95% at the end of 2026.
Will mortgage rates go down in 2027? ›
Will mortgage rates come down in the next 5 years? Lord: “For the rest of 2023, I predict rates for the 30-year fixed-rate mortgage will average 7.3%, followed by 6.1% in 2024, 5.5% in 2025, 5% in 2026, 4.5% in 2027, and 4.5% in 2028.
