As of Oct. 21, according to Credible data gathered from more than 500 U.S. lenders*, the median interest rate on a 30-year fixed-rate mortgage is 6.63%, which is unchanged from Friday. Additionally, the median interest rate on a 15-year fixed-rate mortgage is 5.75%, which is 0.13 percentage points lower than Friday.
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*Data used to calculate the median mortgage interest rates is based on rates from 300 mortgage purchase lenders and 250 refinance lenders and includes lenders in all 50 states. The data is collected daily by Credible based on a $400,000 purchase price, $80,000 down payment, single-family primary residence, and a 740+ FICO score.
The real estate market’s challenges are showing signs of easing. Low housing inventory and high home prices, combined with interest rates above 7%, created a tough landscape for prospective homebuyers. However, the number of newly listed homes is starting to climb as mortgage rates dip to a lower level than last year. While rates rose slightly at the start of October, they now hover around 6.5% — a percentage point lower than this time last year, according to Freddie Mac. A boost in buying power could draw more homebuyers off the sidelines and into the market, especially since the Federal Reserve is likely to consider more interest rate cuts before the end of 2024.
30-year mortgage interest rate, 6.63%
Today’s mortgage interest rate for a 30-year fixed-rate loan is 6.63%, which is unchanged from Friday.
While rates can fluctuate, it’s important to understand how they impact your monthly payment. For example, the monthly payment for a $250,000 mortgage with a 30-year term and a fixed interest rate of 5.50% would be $1,419.47. The principal and interest for the same mortgage with a 6.50% fixed rate would be $1,580.17 per month.
20-year mortgage interest rate, 6.38%
The mortgage interest rate for a 20-year fixed-rate loan is 6.38%, which is unchanged from Friday.
Here’s how slight variations can influence your payment. The monthly principal and interest for a $250,000 mortgage with a 20-year term and fixed interest rate of 5.00% would be $1,649.89, while the monthly payment for the same loan with a 6.00% interest rate would be $1,791.08.
15-year mortgage interest rate, 5.75%
Today’s interest rate for a 15-year fixed-rate mortgage is 5.75%, which is 0.13 percentage points lower than Friday.
The monthly payment for a $250,000 mortgage with a 15-year term and a fixed interest rate of 4.75% would be $1,944.48. The payment for the same loan with a 5.75% interest rate would be $2,076.03.
10-year mortgage interest rate, 5.75%
The interest rate for a 10-year fixed-rate mortgage is 5.75%, which is unchanged from Friday.
Small changes in interest rates can impact your monthly payment. For example, the monthly payment for a $250,000 mortgage with a 10-year term and a fixed interest rate of 4.50% would be $2,590.96. The monthly payment for the same loan with a 5.50% interest rate would be $2,713.16.
How to lock in a mortgage rate
The mortgage rate on your loan estimate is not guaranteed unless you’ve locked in your rate. Some lenders lock your rate upfront, but you might have to request it from other lenders — or you might want to let your rate float for now if you think rates will drop.
“If you think the Fed is likely to lower the federal funds rate, then you would want to wait a bit after the meeting to lock in your rate,” said Shang Saavedra, personal finance educator and founder of Save My Cents, Inc. “This gives financial institutions time to integrate the changes into their pricing and issue newer, likely lower mortgage rates, from which you can then benefit, resulting in lower monthly payments and less interest paid to your lender over time.”
Once you tell your loan officer you want to lock in your rate, you’ll usually have 30, 45, or 60 days to complete the transaction. If you lock your rate, you won’t have to worry about interest rates going up.
Before you lock your rate, ask your lender about its rate lock extension and rate float-down policies. Find out if there’s an option to lower your rate if rates drop after you lock and, if so, what that would cost.
When you ask your loan officer for a rate lock, find out whether you’ll be able to extend your rate, for how long and what it will cost if your loan doesn’t close on time—or whether you’ll have to lock again at a new rate.
How to compare mortgage rates
You have some control over your mortgage rate when you choose your lender. Some lenders might offer you a lower rate than others, making it important to compare offers before committing to a loan. Here are some tips to consider when comparing lenders:
- Create a list of potential lenders: Ask people in your network who they worked with and if they’d recommend them. Check out credit unions and local banks in your neighborhood. Read reviews of the best large nationwide lenders. You can also have the research done for you by using a comparison website, mortgage broker, or correspondent lender, who will originate the loan and may sell it later to investors on the secondary market.
- Submit multiple applications: Don’t just go by a lender’s advertised rates or a quick pre-approval to decide whether to proceed with that company. Submit a complete mortgage application with your most current and accurate financial information so you can get a personalized loan estimate if you’re approved.
- Compare loan estimates: The government requires lenders to use a standardized form called a loan estimate to give you the details about the mortgage rate, fees, and terms they’re willing to offer. This way, you can easily compare offers.
- Analyze rates and fees: You’ll likely find that one lender offers a lower rate but higher fees, while another offers lower fees and a higher rate, and so on. If there’s no clear winner, you might consider choosing the mortgage with higher fees and a lower rate if you plan to keep the loan in the long term, and vice versa if you plan on moving sooner.
- Know which costs to focus on and which to ignore: When comparing loan estimates, you might see different prices for property taxes and homeowners insurance. These will be the same no matter which lender you choose, so don’t factor them into your decision. The most important fees are the lender fees, also called origination fees. These might be negotiable, especially if you can show one lender a better offer you have from another lender.
If you plan to apply with several lenders, make sure you submit applications at the same time, on the same day. This will help give you the most direct comparison between lenders.
What factors influence mortgage rates?
Mortgage rates largely rely on economic factors out of your control, but are also based on a few personal factors you can influence.
Personal factors
Before you apply for a mortgage, examine your finances from a lender’s perspective to understand how your rate will be determined:
- Credit score: The highest credit score you can have is 850, but your score doesn’t need to be quite that high to get a lender’s best rates. In today’s market, a score of around 780 will do. The minimum score for most loans is 620.
- Credit history: Lenders want to see a track record of on-time payments. Avoid making any payment more than 30 days late: That’s when late payments are reported on your credit history. Late payments can hurt your credit score and deter lenders, as can a high credit utilization ratio, which means that you’re using a lot of your available credit.
- Debt-to-income ratio (DTI): The maximum DTI to get a mortgage is typically 50% if you have compensating factors in other areas, such as excellent credit and a substantial down payment. To improve your chances of getting approved — and getting a lower rate — it’s best to keep your DTI below 45%.
- Loan term: A shorter repayment term will typically have a lower interest rate. For example, if a 30-year mortgage has an interest rate of 6.50%, a 15-year mortgage might have a rate of 6.00%.
- Loan type: Your rate will also depend on whether you’re getting a conventional, FHA, VA, jumbo, or other type of mortgage. Each has a different risk profile from the lender’s perspective.
- Property type: Your rate might be lower on a single-family detached home compared to a condo. Single-family homes usually hold value well and are easier for a lender to sell in the event of foreclosure. Condos tend to have slightly higher rates because of additional risks associated with being part of a larger complex, such as how well the homeowners association manages building maintenance and repairs. You can also expect to pay more for a loan on a manufactured home or a two- to four-unit residence.
- Occupancy: If you’re buying a home to use as your primary residence, you’ll typically get a lower interest rate and have an easier time qualifying than if you’re buying a vacation home or investment property.
- Banking relationship: If you have a checking account with the same company you get your mortgage from, you may get a small interest rate discount, such as 0.25 percentage points if your loan payments are automatically deducted from that account. (That said, you might find an even better rate from a lender you don’t bank with.)
Economic factors
These are the economic factors to pay attention to if you want to understand what affects interest rates:
- Inflation: The Federal Reserve tries to keep inflation in check by influencing interest rates. When yearly inflation exceeds the Fed’s 2.00% target, the Fed raises the federal funds rate to slow spending and curb inflation. When inflation dips below 2.00%, the Fed tries to nudge rates down to stimulate borrowing and spending.
- Unemployment: Low unemployment can contribute to inflation as it gives workers more power to command higher wages. Higher wages can drive prices up, causing the Fed to respond with actions meant to raise interest rates.
- Global events: Instability caused by disease outbreaks, political unrest, and extreme weather can impact the availability of goods and labor. If the supply of goods is limited, prices will rise and interest rates may follow suit.
- Loan demand: High demand for mortgages can overwhelm lenders. If they can’t meet the additional demand profitably or secure enough funds to lend, they may need to increase their interest rates.
- Property state: Interest rates can vary by state due to differences in regulations (such as how difficult it is to foreclose) and business costs. Lenders might charge more in certain states to offset higher expenses.
While you can’t control these factors, understanding how they impact your rate can be helpful if you’re exploring mortgage financing. If you have time to spare before borrowing, you might be able to get a better rate by waiting until the conditions are right. That said, timing the market can be challenging and may not work out in your favor.
Today’s mortgage rates FAQ
How often do mortgage rates change?
Mortgage rates tend to change daily, but they only change on days when the mortgage bond markets are open (weekdays, excluding holidays). When the economy is especially volatile, rates might change several times a day. Lenders are constantly repricing their mortgages to account for changes in inflation, unemployment, and other economic factors that affect investor demand for mortgage-backed securities.
Can I negotiate my mortgage rate?
Some lenders may be willing to negotiate a mortgage rate with you, especially if you have a competing offer from another lender and you have top-notch credit, a solid down payment, and a low DTI.
What’s the difference between a 30-year and 15-year mortgage rate?
A 15-year mortgage will usually have an interest rate up to 1 percentage point lower than a 30-year mortgage. You can compare 15- and 30-year interest rates over time using data compiled by Freddie Mac. However, your monthly payment will be significantly higher on a 15-year loan despite the lower rate because you’re repaying the loan principal in half the time.