Mortgage rates continue to fall for 15- and 30-year terms

The interest rate on a 30-year fixed-rate mortgage is 6.125% as of August 5, down 0.250 percentage points from Friday. Additionally, the interest rate on a 15-year fixed-rate mortgage is 5.490%, down 0.135 percentage points from Friday.

Mortgage rates change daily, so it’s a good idea to check today’s rate before applying for a loan. It’s also important to compare current interest rates, terms and fees from different lenders to make sure you’re getting the best deal.

Rates were last updated on August 5, 2024. Rates are based on assumptions presented here. Actual rates may vary. Credible, a personal finance marketplace, has 5,000 Trustpilot reviews with an average rating of 4.7 stars (out of 5.0).

When you take out a mortgage to buy a home, you are borrowing money from a lender. To make a profit and reduce their risk, they will charge interest on the principal, which is the amount you borrowed.

Expressed as a percentage, a mortgage interest rate is essentially the cost of borrowing money. It can vary based on several factors, such as your credit score, debt-to-income (DTI) ratio, down payment, loan amount, and repayment term.

After you get a mortgage, you’ll typically receive an amortization schedule, which shows your payment schedule over the life of the loan. It also shows how much of each payment goes toward principal versus interest.

At the beginning of the loan term, you will spend more money on interest and less on principal. As you get closer to the end of the repayment term, you will pay more on principal and less on interest.

Your mortgage interest rate can be fixed or variable. With a fixed-rate mortgage, the rate will remain constant throughout the life of the loan. With an adjustable-rate mortgage (ARM), the interest rate can fluctuate based on the market.

Keep in mind that a mortgage interest rate is not the same as its annual percentage rate (APR). That’s because the APR includes both the interest rate and any other lender fees or charges.

Mortgage rates change frequently, sometimes daily. Inflation plays a big role in these fluctuations. Interest rates tend to rise during periods of high inflation, while they tend to fall or stay about the same during periods of low inflation. Other factors, such as economic sentiment, demand and inventory, can also impact current average mortgage rates.

To find great mortgage rates, start by using Credible’s secure website, which can show you current mortgage rates from multiple lenders without affecting your credit score. You can also use Credible’s mortgage calculator to estimate your monthly mortgage payments.

Mortgage lenders typically determine interest rates on a case-by-case basis. They typically reserve the lowest rates for low-risk borrowers, meaning those with higher credit scores, income and down payments. Here are some other personal factors that can determine your mortgage rate:

Other indirect factors that can determine the mortgage rate include:

In addition to economic and personal factors, the lender you choose can also affect your mortgage rate. Some lenders have higher average mortgage rates than others, regardless of your financial or credit situation. That’s why it’s important to compare lenders and loan offers.

Here are some of the best ways to compare mortgage rates and make sure you get the best one:

Another way to compare mortgage rates is to use a mortgage calculator. Use it to determine your monthly payment amount and the total cost of the loan. Keep in mind that some fees, such as homeowners insurance or taxes, may not be included in the calculations.

Here’s a simple example of what a 15-year fixed-rate mortgage might look like versus a 30-year fixed-rate mortgage:

If you’re considering getting a mortgage, here are some benefits to consider:

And here are some of the major disadvantages of getting a mortgage:

Requirements vary by lender, but here are the typical steps to qualify for a mortgage:

Here are the basic steps to applying for a mortgage and what you can typically expect during the process:

Refinancing your mortgage allows you to exchange your current loan for a new loan. It is not a second loan. You will also still be responsible for the payments on the refinanced loan.

You may want to refinance your mortgage if you:

The refinancing process is similar to the one you follow for the original loan. Here are the basic steps:

If you need to tap into your home equity to pay off debt, finance a renovation, or cover an emergency expense, you have two popular options: a home equity loan and a home equity line of credit (HELOC). Both a home equity loan and a HELOC allow you to borrow against the equity in your home, but a home equity loan comes in the form of a lump sum payment and a HELOC is a revolving line of credit.

These two types of loans have other important similarities and differences in how they work:

Mortgage interest rates fluctuate all the time, but a fixed rate allows you to lock in your current rate for a set amount of time. This allows you to lock in your desired rate when you complete the home buying process.

Mortgage points are a type of prepaid interest that you can pay up front (often as part of your closing costs) to get a lower overall interest rate. This can lower your APR and your monthly payments.

Closing costs are the fees you, as a buyer, must pay before you get a loan. Common costs include attorney fees, appraisal fees, origination fees, and processing fees.

If you’re looking to find the right mortgage rate for you, consider using Credible. You can use Credible’s free online tool to easily compare multiple lenders and see prequalified rates in just minutes.