Mortgage Rates: Compare Today’s Rates
Mortgage industry insights
Mortgage rates surge to 6 percent
Most expected mortgage rates to rise this year, but it happened faster than predicted, with rates breaking through 6 percent on some 30-year fixed loan offers in June — a figure not seen since 2008.
Although the Federal Reserve doesn’t influence rates on fixed mortgages, its recent move to raise the federal funds rate due to inflation — and the indication it’ll continue to raise that rate this year — does have some impact on mortgages.
That means it’s more important than ever to compare rates before selecting a lender.
“Conducting an online search can save thousands of dollars by finding lenders offering a lower rate and more competitive fees,” says Greg McBride, Bankrate’s chief financial analyst.
He adds that now is not a good time to agree to an adjustable-rate mortgage (ARM), even if the initial interest rate seems low.
While rising rates are likely to have a few knock-on effects in the housing market, they probably won’t cause housing prices to decline significantly.
“More than a decade of chronic underbuilding and millions of millennials moving into the homebuying stage of life has created a significant imbalance between housing supply and demand,” says McBride. “While rapidly rising mortgage rates may temper the demand somewhat, don’t expect home price appreciation to come to a halt. A more modest pace of appreciation is the likelier outcome.”
Read more: This week’s latest mortgage news
How to get a mortgage
Because a home is usually the biggest purchase a person makes, a mortgage is usually a household’s largest chunk of debt. Getting the best possible terms on your loan can mean a difference of hundreds of extra dollars in or out of your budget each month, and tens of thousands of dollars in or out of your pocket over the life of the loan. It’s important to prepare for the mortgage application process to ensure you get the best rate and monthly payments within your budget.
Here are quick steps to prepare for a mortgage:
- Build your credit
- Make a budget
- Set savings aside for both down payment and expected monthly payments
- Research the best type of mortgage for you
- Compare current mortgage rates
- Choose the right lender
- Get preapproved
- See multiple houses within your budget
- Apply and get approved for a mortgage
- Close on your new house
>> Read more: How to get a mortgage guide
Why compare mortgage rates?
Shopping around for quotes from multiple lenders is one of Bankrate’s most crucial pieces of advice for every mortgage applicant. When you shop, it’s important to think about not just the interest rate you’re being quoted, but also all the other terms of the loan. Be sure to compare APRs, which include many additional costs of the mortgage not shown in the interest rate. Keep in mind that some institutions may have lower closing costs than others, or your current bank may extend you a special offer. There’s always some variability between lenders on both rates and terms, so make sure you understand the full picture of each offer, and think about what will suit your situation best. Comparison-shopping on Bankrate is especially smart, because our relationships with lenders can help you get special low rates.
What factors determine my mortgage rate?
Lenders consider these factors when pricing your interest rate:
- Credit score
- Down payment
- Property location
- Loan amount/closing costs
- Loan type
- Loan term
- Interest rate type
Your credit score is the most important driver of your mortgage rate. Lenders have settled on this three-digit score as the most reliable predictor of whether you’ll make prompt payments. The higher your score, the less risk you pose in the lender’s view — and the lower rate you’ll pay.
Lenders also consider how much you’re putting down. The greater share of the home’s total value you pay upfront, the more favorably they view your application. The kind of mortgage you choose can affect your rate, too, with shorter-term loans like 15-year mortgages typically having lower rates compared to 30-year ones.
FAQs about mortgage interest rates
Looking to refinance?
Refinancing your mortgage can be a good financial move if you lock in a lower rate. However, there are upfront costs associated with refinancing, such as appraisals, underwriting fees and taxes, so you’ll want to be sure the savings outpace the refinance price tag in a reasonable amount of time — most experts say the ideal breakeven timeline is 18 to 24 months.
As mortgage rates rise, fewer homeowners will stand to benefit from refinancing, but even at their current level, millions of borrowers could still save.
Reducing your rate isn’t the only reason to refinance. It’s also possible to tap your home equity to pay for home renovation, or, if you want to pay down your mortgage more quickly, you can shorten your term to 20, 15 or even 10 years. Because home values have risen sharply in the last few years, it’s also possible that a refinance could free you from paying for private mortgage insurance.
>> Compare refinance rates
>> Read more: Information on mortgage refinancing
Written by: Jeff Ostrowski, senior mortgage reporter for Bankrate
Jeff Ostrowski covers mortgages and the housing market. Before joining Bankrate in 2020, he wrote about real estate and the economy for the Palm Beach Post and the South Florida Business Journal.
Reviewed by: Greg McBride, chief financial analyst for Bankrate
Greg McBride, CFA, is Senior Vice President, Chief Financial Analyst, for Bankrate.com. He leads a team responsible for researching financial products, providing analysis, and advice on personal finance to a vast consumer audience.