October 2, 2024—Rates Remain Fairly Steady – Forbes Advisor – Technologist

Today, the mortgage interest rate on a 30-year fixed mortgage is 6.70%, according to Curinos, while the average rate on a 15-year mortgage is 5.74%. On a 30-year jumbo mortgage, the average rate is 6.73%.

Current Mortgage Rates for October 2, 2024

Today’s average rate on a 30-year mortgage (fixed-rate) inched up to 6.70% from 6.65% yesterday. One week ago, the 30-year fixed was 6.68%.

The APR on a 30-year fixed is 6.71%. This time last week, it was 6.67%. APR is the all-in cost of your loan.

At today’s interest rate of 6.70%, borrowers with a 30-year fixed-rate mortgage of $100,000 will pay $645 per month in principal and interest (taxes and fees not included), the Forbes Advisor mortgage calculator shows. In total interest, you’d pay $132,181 over the life of the loan.

15-Year Mortgage Rates

Today’s 15-year mortgage (fixed-rate) is 5.74%, up 0.03 percentage point from the previous week. The same time last week, the 15-year, fixed-rate mortgage was at 5.71%.

The APR on a 15-year fixed is 5.77%. It was 5.72% a week earlier.

A 15-year, fixed-rate mortgage with today’s interest rate of 5.74% will cost $830 per month in principal and interest on a $100,000 mortgage (not including taxes and insurance). In this scenario, borrowers would pay approximately $49,368 in total interest.

Jumbo Mortgage Rates

On a 30-year jumbo, the average interest rate is 6.73%, lower than it was at this time last week. The average rate was 6.74% at this time last week.

Borrowers with a 30-year fixed-rate jumbo mortgage with today’s interest rate of 6.73% will pay $647 per month in principal and interest per $100,000. That means that on a $750,000 loan, the monthly principal and interest payment would be around $4,855 and you’d pay around $997,627 in total interest over the life of the loan.

What Affects Mortgage Rates?

The Federal Reserve’s restrictive monetary policy—including its interest rate hikes, which it’s using to restrain inflation—is the primary factor that’s pushing long-term mortgage rates higher. The state of the economy and housing market also affects mortgage rates. As for what interest rate the lender might offer you, this depends on your debt-to-income (DTI) ratio and credit score, both of which indicate your risk as a borrower.

Related: Mortgage Rate Forecast & Trends For 2024

How To Compare Mortgage Rates

Shop around and talk to various lenders to get a sense of each company’s mortgage loan offerings and services. Don’t go with the first lender quote you receive; instead, compare the best mortgage rate quotes to get a deal. In particular, consider what fees they charge, what fees they’re willing to waive and what closing assistance they might provide. Make sure any special offers or discounts don’t come at the cost of a higher mortgage rate.

Be sure to apply with each lender within a 45-day window. During this window, you can have multiple lenders pull your credit history without additional impact on your credit score.

Is This a Good Time To Buy a House?

Mortgage rates remain elevated, and the nation’s housing supply remains limited. The low inventory is preventing house prices from dropping. Meanwhile, the combination of high mortgage rates and appreciated home values will continue to present an obstacle for many prospective homebuyers seeking affordable housing.

How Are Mortgage Rates Determined?

Multiple factors affect the interest rate for a mortgage, including the economy’s overall health, benchmark interest rates and borrower-specific factors.

The Federal Reserve’s rate decisions and inflation can influence rates to move higher or lower. Although the Fed raising rates doesn’t directly cause mortgage rates to rise, an increase to its benchmark interest rate makes it more expensive for banks to lend money to consumers. Conversely, rates tend to decrease during periods of rate cuts and cooling inflation.

Home buyers can make several moves to improve their finances and qualify for competitive rates. One is having a good or excellent credit score, which ranges from 670 to 850. Another is maintaining a debt-to-income (DTI) ratio below 43%, which implies less risk of being unable to afford the monthly mortgage payment.

Further, making a minimum 20% down payment can help you avoid private mortgage insurance (PMI) on conventional home loans. If you can afford the larger monthly payment, 15-year home loans have lower rates than a 30-year term.

What Is the Best Type of Mortgage Loan?

Many home buyers are eligible for several mortgage loan types. Each program can have its own advantages:

• Conventional mortgage. A conventional home loan is ideal for borrowers with good or excellent credit to qualify for competitive rates. Additionally, making a minimum 20% down payment helps you waive private mortgage insurance premiums.
• FHA loan. An FHA home loan is best when applying with imperfect credit or a low down payment. You can put as little as 3.5% down with a credit score above 580. A minimum 10% down payment is necessary for credit scores ranging from 500 to 579.
• VA loan. Borrowers with a qualifying military background may prefer a VA loan for its flexibility. A down payment may not be required. While you pay a one-time funding fee, there are no ongoing mortgage insurance premiums or service fees.
• USDA loan. Applicants in eligible rural areas can buy or build a home with no down payment, although an upfront and annual guarantee fee applies. Additionally, income requirements apply and this program requires a moderate income or lower.
• Jumbo loan. Homebuyers in a high-cost-of-living area will need to apply for a jumbo loan when the loan amount exceeds the Federal Housing Finance Agency’s conforming loan limits. The limit in most municipalities is $726,200 in 2023.

Frequently Asked Questions (FAQs)