April 18, 2024—30-Year Mortgage Rates Increase, 15-Year Rates Steady – Forbes Advisor – Technologist

Currently, the average interest rate on a 30-year fixed mortgage is 7.66%, compared to 7.55% a week ago.

For borrowers who want to pay off their home faster, the average rate on a 15-year fixed mortgage is 6.93%, up 0.09 percentage point from the previous week.

If you’re thinking about refinancing to lock in a lower rate, compare your existing mortgage rate with current market rates to make sure it’s worth the cost to refinance.

Current Mortgage Rates for April 18, 2024

30-Year Mortgage Rates

Today’s 30-year mortgage—the most popular mortgage product—is 7.66%, up 0.11 percentage point from a week earlier.

The interest rate is just one fee included in your mortgage. You’ll also pay lender fees, which differ from lender to lender. Both interest rate and lender fees are captured in the annual percentage rate, or the APR. This week the APR on a 30-year fixed-rate mortgage is 7.68%. Last week, the APR was 7.53%.

Let’s say your home loan is $100,000 and you have a 30-year, fixed-rate mortgage with the current rate of 7.66%, your monthly payment will be about $710, including principal and interest (taxes and fees not included), the Forbes Advisor mortgage calculator shows. That’s around $155,574 in total interest over the life of the loan.

15-Year Mortgage Rates

Today’s 15-year mortgage (fixed-rate) is 6.93%, up 0.09 percentage point from the previous week. The same time last week, the 15-year, fixed-rate mortgage was at 6.84%.

The APR on a 15-year fixed is 6.96%. It was 6.82% a week earlier.

A 15-year, fixed-rate mortgage with today’s interest rate of 6.93% will cost $895 per month in principal and interest on a $100,000 mortgage (not including taxes and insurance). In this scenario, borrowers would pay approximately $61,055 in total interest.

Jumbo Mortgage Rates

On a 30-year jumbo, the average interest rate is 7.61%, higher than it was at this time last week. The average rate was 7.53% at this time last week.

Borrowers with a 30-year fixed-rate jumbo mortgage with today’s interest rate of 7.61% will pay $707 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 $5,302 and you’d pay roughly $1.16 million in total interest over the life of the loan.

What’s an APR, and Why Is It Important?

The annual percentage rate, or APR, encompasses the mortgage interest rate and lender fees over the total life of the loan. It’s important because it can give homebuyers a more complete picture of total costs, not just the interest rate.

Comparing APR among lenders is a better way to see overall costs because it will show you everything from interest rate to fees.

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)