FAQ

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What are the current mortgage rates today?

Mortgage rates move from week to week, and the rate you are offered also depends on your credit score: borrowers with higher scores are quoted preferential rates, while a thinner credit file usually means paying more. Rates also differ by loan type, term, and how many points you are willing to pay up front. A national average therefore tells you very little about your own deal — use the filters above to compare quotes for your state, credit band and loan type, then run the rate you are actually offered through the calculator to see the monthly payment and total interest it implies.

How low will mortgage rates go?

Nobody can reliably predict where rates go next, and forecasts published even a few months earlier are frequently wrong — so treat any specific number you read, including this page, as commentary rather than guidance. What is worth understanding is the mechanism. There's a common misconception that mortgage rates follow the Federal Reserve benchmark interest rate; in practice they track the yield on the 10-year Treasury note far more closely. Mortgages are a little riskier than Treasury notes, so lenders price them at a spread above that yield — historically around two percentage points, though the spread widens when lenders see more risk or less liquidity in the market. If you want a sense of direction, watch the 10-year yield rather than Fed announcements.

How to shop for mortgage rates?

The best way to shop around for better mortgage and refinance rates is to use an online calculator to show you various mortgage options. These options will usually have three components of interest to you. The first will be the duration (and type of mortgage). You'll want to ensure that the offer you're looking at is for the time that you want. The second component is the interest rate. Of course, it would be best if the interest rate were as low as possible. Finally, you may see an entry about points. Points are a form of prepaid interest due at closing.

Therefore, when looking for a mortgage, look for a mortgage with the term you want that has the lowest interest rate and the fewest points. That will be your best deal!

Definitions

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Purchase Price

Enter the full purchase price for your home in this field. If you haven't found your property yet and are using this calculator to explore various mortgage and refinance rates, enter your best guess. You can look at some homes within the area to see what they're going for and put in a ballpark figure based on that initial research. When in doubt, choose a purchase price that's on the higher side. That way, you'll plan for a higher mortgage payment, and if it so happens that you find something less expensive, that will be a bonus!

Down Payment

Enter the amount of money that you plan on putting down. You'll receive the best rates and offers if you put at least 20% down. While you can get a mortgage with as little as 0% down (VA loans don't require anything down, for example), your options are frequently much more limited. Additionally, if you're looking at getting a jumbo loan, most banks will mandate that you have at least 20% down, and they won't extend credit to people with less than that amount.

If your purchase price would result in having less than 20% down, you can use this calculator to see if any lenders would still give you a loan. If not, consider reducing your purchase price so that you'll have 20% down.

Credit Score

Using the dropdown, select the approximate bucket under which your credit score falls. If you're unsure what your credit score is, consider getting a copy of it from freecreditscore.com or creditkarma.com. Many credit cards and banks are now providing your score for free, as well, so check to see if one of your credit cards is offering this benefit. Please remember that you don't need your precise score. Simply selecting the right bucket will let you see your best offers!

If you don't have access to your credit score, consider that the average US credit score is around 690, so selecting the Average or Above Average option from the dropdown would result in offers that you could likely get once you apply. Before applying, though, it's best to check your credit score first. Every time you apply for a loan, you get a hard inquiry, which hurts your score a little. Therefore, you'll want to be sure you'll get approved before you apply!

Loan Purpose

Select either purchase or refinance from the dropdown menu. If you're buying a new home and obtaining a new mortgage, you'll want to select the purchase option. If you already have a mortgage and want to adjust the terms of your existing mortgage or take some cash out, then you'll want to select the refinance option. Choosing the right selection for what you want is vital to ensure that you see the best offers available to you in your area!

Loan Type

There are multiple types of mortgages. Most people buy homes using a conventional 30-year fixed mortgage. With this loan, you'll make equal monthly payments over 30 years until the balance is zero. You can get fixed terms for ten years, 15 years, and 20 years as well. The shorter the period, the lower your interest rate will be.

You can also get adjustable-rate mortgages (ARM). With these loans, you'll lock in an interest rate for a specific duration (the most common is five years). During this term, your monthly payment will be the same. At the end of the five years, you'll need to obtain a new loan for the remaining balance on your home. If the interest rates are lower, you'll receive that lower rate with the new loan. If they're higher, however, you'll pay more.

Using the dropdown, select which loan types are most appealing to you. Most people choose the 30-year fixed for its simplicity and its fixed monthly payment.

Points

From the dropdown, select the number of points that you're willing to pay. As a reference, one point will reduce your interest rate by 0.25%. That point will also cost 1% of the property's value at closing. Therefore, points are a form of prepaid interest. You pay money upfront to spend less over time. A quick example would be a mortgage for $500,000 at 3.5%. If you spent two points, you'd pay an extra $10,000 at closing, but your interest rate would only be 3%.

If you plan on spending a while in your new home (typically over five years), points are worth it. However, if you might sell your home sooner, choose a loan with 0.5 points or 0 points.

Mortgage Rates Explained

Live lender quotes aren't shown here at the moment. To work out what a given rate would cost you, put it into the mortgage calculator and compare the monthly payment and total interest side by side.

Mortgage rates move every day, and the rate you lock has a bigger effect on your total cost than almost any other number in the deal. The headline average you see quoted in the news is close to meaningless for any individual borrower: your state, credit score, loan type, down payment and the points you are willing to pay up front all move the number you will actually be offered.

When comparing offers, look past the headline rate: points change the math (paying two points up front for a lower rate only pays off if you keep the loan for years), and the same rate can come with very different closing costs. Once you have a realistic rate, run it through the mortgage calculator to see the monthly payment and the full amortization schedule it implies — that's the number your budget will actually feel.