Mortgage rates can change weekly, daily, and even hourly, and are affected by both factors outside your control and those within your control.
External factors that affect mortgage rates include the Federal Reserve and U.S. Treasury. As the bonds and securities markets fluctuate, mortgage rates can also rise and fall, although the outlook is much longer-term than the basic interest rate at any given time.
The economy can also affect the housing market and the interest rate. When the economy is thriving, or the purchasing power of your dollar decreases due to inflation, it can drive mortgage rates up. A depressed economy typically sees mortgage rates going down.
How many homes are available in any given market may affect mortgage rates. As supply and demand flow and ebb, mortgage rates will go up and down as well.
Your own financial situation, the types of loans you apply for and qualify for, your credit score, and your debt-to-income (DTI) ratio also affect your mortgage rate. These are factors you can examine ahead of time, and work on. If you can raise your credit score and drop your DTI ratio, you can often qualify for a better interest rate and more favorable terms on your mortgage loan.
| Loan Program | Mortgage Rate | APR* | 1 Day Change |
|---|---|---|---|
| Conventional 30 year fixed | 6.632% | 6.704% | -0.08% |
| Conventional 20 year fixed | 6.515% | 6.616% | -0.02% |
| Conventional 15 year fixed | 6.008% | 6.125% | -0.03% |
| Conventional 10 year fixed | 6.015% | 6.176% | +0.26% |
| Conventional 7 year ARM | 6.656% | 7.254% | -0.03% |
| Conventional 5 year ARM | 6.677% | 7.368% | -0.04% |
| VA 30 year fixed | 6.111% | 6.35% | +0.02% |
| VA 15 year fixed | 5.706% | 6.109% | +0.1% |
| VA 5 year ARM | 6.338% | 6.649% | +0.08% |
Data source: ©Zillow, Inc. Use is subject to the Terms of Use
Most home buyers are better served by a fixed rate mortgage, which means the interest rate won’t fluctuate based on central bank rates. If interest rates drop sharply during the term of your loan, you can always refinance to take advantage of the lower rate. Adjustable rate mortgages are tied to fluctuating interest rates, and can lead to unexpectedly high mortgage payments
Mortgage rates don’t just include interest, but extra costs like loan origination fees, which can rise when lenders aren’t driven to be highly competitive. You may also find other fees being attached to your mortgage, which makes the annual percentage rate, or APR, much higher. It’s important to go over the entire projected costs of your mortgage and try to negotiate fees down or get them waived by your lender.
Getting the best mortgage rate means carefully choosing your lender and being aware of current economic conditions as well as your own financials and credit. By getting the lowest possible mortgage rate, you can reduce what you pay over the term of your loan.
Use our free mortgage calculator tools to estimate your monthly mortgage payments based on your unique loan scenario. See how your monthly payment changes by making updates to your home price, down payment, interest rate, and loan term.
Wondering what your monthly mortgage payment might be? Plug in your data to get an instant mortgage payment estimate.
Military service can mean eligibility for a no-down payment mortgage. Find out if you qualify for a VA home loan.
Designed for first-time and low-income homebuyers, an FHA loan could put you on the path to home ownership fast.
Seeking to refinance? Find out how much you can save in interest over the term of your home loan by refinancing now.
Each step-by-step guide is designed to shepherd you through a process from start to finish. Know what to expect and how to proceed, no matter where you are in your home buying journey.