Compare Mortgage Rates and Find the Best Deal

Comparing mortgage rates can be a daunting task, but it's essential to find the best deal for your home loan. The average 30-year mortgage rate is around 3.5%, but rates can vary depending on factors like credit score and loan amount.

To get started, you'll want to shop around and compare rates from multiple lenders. In our article, we found that some lenders offer rates as low as 2.75% for borrowers with excellent credit. This can save you thousands of dollars over the life of the loan.

Your credit score plays a significant role in determining your mortgage rate. A good credit score can help you qualify for lower rates, while a poor credit score may result in higher rates. For example, a borrower with a 700 credit score may qualify for a 3.25% rate, while a borrower with a 600 credit score may qualify for a 3.75% rate.

By understanding the factors that influence mortgage rates, you can make an informed decision and find the best deal for your home loan.

Mortgage rates have been on the rise over the last couple of months, with 30-year mortgage rates averaging around 6.56% in November 2024, according to Zillow data.

The good news is that most forecasts believe mortgage rates will drop in 2025 as inflation slows and the Fed continues to lower the federal funds rate.

In recent weeks, mortgage rates have been holding relatively steady, with 30-year mortgage rates averaging around 6.56% in November 2024, and 15-year mortgage rates averaging 5.92%.

The current national average 30-year fixed mortgage APR is 7.05%, as of Saturday, January 04, 2025, according to Bankrate's latest survey of the nation's largest mortgage lenders.

If you're looking to refinance your current mortgage, you can consider a 30-Year VA Cash-Out Refinance, which has an interest rate of 6.990% and an APR of 7.324%.

Here are some current mortgage rates to consider:

Your credit score is a major factor in determining your mortgage rate, with higher scores resulting in lower interest rates. A good credit score can save you thousands of dollars over the life of your loan.

Your loan amount can also impact your rate, with some lenders offering better rates for higher loan amounts. However, this can vary depending on the lender and the specific loan program.

The type of loan you choose can also affect your rate, with FHA and VA loans often offering lower rates than conventional loans. Additionally, the length of your loan term can impact your rate, with shorter terms usually resulting in lower interest rates.

Here are the top 9 factors that determine your mortgage rate:

Your mortgage rate is determined by a combination of factors that can be influenced by you, and others that are outside of your control. The good news is that by understanding these factors, you can make informed decisions to get the best rate possible.

Your credit score is a major factor in determining your mortgage rate, with higher scores resulting in lower interest rates. In fact, a good credit score can save you thousands of dollars over the life of your loan.

The size of your down payment also plays a role in determining your mortgage rate, with larger down payments often resulting in lower rates. This is because lenders view larger down payments as a lower risk.

The type of loan you get can also impact your mortgage rate, with Federal Housing Administration (FHA) loans and U.S. Department of Veterans Affairs (VA) loans often having lower rates than conventional loans.

Economic factors such as inflation, the Federal Reserve's monetary policy, and U.S. Treasury bond yields can also influence your mortgage rate. These factors can cause rates to rise or fall, so it's essential to stay informed about market trends.

Here are the primary factors that determine your mortgage rate:

Additionally, the lender you work with can also impact your mortgage rate, as they set rates based on their own supply and demand.

A 30-year mortgage might seem like a great idea, but there are some downsides to consider. You'll end up paying more in interest overall compared to a shorter-term loan.

Higher interest rates are often charged for 30-year loans because lenders take on more risk with longer repayment periods. This means you'll pay more in interest over the life of the loan.

Becoming "house poor" is a real concern – just because you can afford a bigger house with a 30-year loan doesn't mean you should stretch your budget too thin. Give yourself some breathing room for other financial goals and unexpected expenses.

It'll take longer to build equity in your home with a 30-year loan, as most of your initial payments will go towards interest rather than paying down the principal amount.

ARM rates differ from traditional fixed mortgage rates, so it's essential to understand the difference before making a decision.

If you're considering an FHA loan, make sure to look at annual percentage rates (APRs), not just interest rates, when comparing FHA and conventional loans.

A 15-year loan can offer lower rates, but it may require higher monthly payments.

The interest rate of a 30-year loan is often higher than a 15-year loan, but the monthly payments are lower.

ARM rates can be lower than traditional fixed mortgage rates, but they can also increase over time.

FHA loans may have lower interest rates than conventional loans, but you should compare annual percentage rates (APRs) to get a full picture.

Conventional loans often have higher interest rates than FHA loans, but their APRs may be comparable.

Your credit score plays a significant role in determining the price you'll pay to borrow a mortgage. A higher credit score can result in a lower mortgage rate, which can save you money in the long run.

The minimum credit score required to buy a house is 620, but some government-backed loans may have exceptions. This means that if your credit score is 620 or above, you may qualify for a mortgage.

Making a larger down payment is crucial in reducing your total loan amount, which in turn lowers the amount of interest you'll pay. Plus, if you put down at least 20%, you can avoid private mortgage insurance (PMI).

Here are some key down payment facts:

Improving your credit score or saving for a larger down payment can unlock a better mortgage rate. This might be a good option if you're having trouble getting a good rate.

If mortgage rates today are lower than the rate on your mortgage, you could lower your monthly payment by refinancing. Refinancing costs money, so you'll want to make sure your monthly savings make it worthwhile.

You can refinance to take cash out of your home, which can be beneficial if you need to pay for a big home repair or upgrade. However, if it means taking on a higher interest rate, it might not be worth it.

Mortgage rate locks usually last between 30 and 60 days, giving you a guarantee that the rate your lender offered you will still be available when you actually close on the loan. If your loan doesn't close before your rate lock expires, you should expect to pay a rate lock extension fee.

To lock in a mortgage rate, you should ask your loan officer about the options you have to lock in a rate. Mortgage rate locks usually last between 30 and 60 days.

You'll need to be under contract to be eligible for a rate lock on a VA loan. The timeline can vary depending on factors like the type of loan and the economic environment.

Mortgage rate locks give you a guarantee that the rate your lender offered you will still be available when you close on the loan. If your loan doesn't close before your rate lock expires, you may need to pay a rate lock extension fee.

You can contact a home loan specialist at 1-800-884-5560 or start your VA Home Loan quote online to learn more about locking in rates. There's no obligation, and you'll be one step closer to owning your home.

Refinancing your mortgage can be a smart move if you can lower your monthly payment by refinancing to a lower rate. If mortgage rates today are lower than the rate on your mortgage, refinancing might be a good option.

You'll need to consider the costs of refinancing, which can add up. But if your monthly savings make it worthwhile, refinancing could be a great choice.

To refinance your current mortgage, you'll go through a process similar to your original mortgage application. You'll likely pay less in closing costs this time around compared to when you first bought a home.

Refinancing can also give you the opportunity to take cash out of your home, which can be beneficial for big home repairs or upgrades. However, be careful not to take on a higher interest rate in the process.

Mortgage rates have been influenced by the Federal Reserve's rate cuts, which helped rates fall in September, but they've since ticked back up due to strong economic data.

The current national average 30-year fixed mortgage APR is 7.05%, according to Bankrate's latest survey of the nation's largest mortgage lenders, as of January 4, 2025.

VA loan rates are typically lower than both FHA and conventional mortgage rates, and are generally lower due to the VA backing a portion of each loan.

Here's a comparison of the current national mortgage interest rates:

The economy's strength may impact future rate drops, but it's essential to stay informed about current trends and outlook to make informed decisions about your mortgage.

As we look at the current mortgage rate trends, it's interesting to see how they've changed over the past few years.

In 2020, mortgage rates fell drastically due to the economic impact of the COVID-19 pandemic, with thirty-year fixed mortgage rates hitting a historic low of 2.65% in January 2021.

This is a significant drop from the current average 30-year fixed mortgage APR of 7.05%, which is the national average as of January 4, 2025.

The average 15-year fixed mortgage APR is 6.38%, according to Bankrate's latest survey of the nation's largest mortgage lenders.

Mortgage rates have increased over the last couple of months, with 30-year mortgage rates averaging around 6.56% in November 2024, and 15-year mortgage rates averaging 5.92%.

Fortunately, most major forecasts believe that mortgage rates will go down somewhat in 2025 as inflation slows and the Fed continues lowering the federal funds rate.

Here's a rough idea of how mortgage rates have trended over the last five years:

Most major forecasts expect rates to start dropping throughout the next few years, and they could end up closer to 6% by the end of next year.

The market outlook is looking a bit uncertain, with mortgage rates having ticked back up in recent weeks after a brief dip in September.

Inflation has slowed significantly in the last couple of years, which has helped the Federal Reserve cut rates, but strong economic data has caused rates to rise again.

The national average 30-year fixed mortgage APR is currently at 7.05%, according to Bankrate's latest survey of the nation's largest mortgage lenders.

Mortgage rates have increased over the last couple of months, and they've been holding relatively steady in recent weeks, with 30-year mortgage rates averaging around 6.56% in November 2024.

Most major forecasts believe that mortgage rates will go down somewhat in 2025 as inflation slows and the Fed continues lowering the federal funds rate.

Here's a breakdown of the current mortgage rates:

Economic trends and government policies play a significant role in determining mortgage rates.

High economic growth typically leads to higher mortgage rates, while slower growth often results in lower rates. For instance, high inflation has pushed mortgage rates up in recent years.

Mortgage rates are sensitive to inflation and labor market data, causing them to fluctuate as economic data shifts market expectations around Fed rate cuts.

The Federal Reserve's policy directly affects adjustable-rate mortgages, since their interest rates are calculated using a broader economic index.

Federal Reserve decisions indirectly impact fixed-rate mortgages, which can move more independently and sometimes in the opposite direction of the federal funds rate.

A Fed rate cut doesn't guarantee that mortgage rates will immediately decrease, as mortgage rates are also shaped by factors like global economic conditions and housing market trends.

The Federal Reserve's policies set the tone for what banks and other lenders charge for loans, but it doesn't set specific mortgage rates.

Comparing mortgage rates is a crucial step in securing a good deal on a home loan. You have two options: use an online rate-comparison site or reach out to lenders yourself.

Using an online rate-comparison site like LendingTree can be a convenient option, as it allows you to enter your information into one form and send it off to multiple lenders. This can be especially important because mortgage rates change daily, and you'll need rates gathered on the same day to make a good comparison.

To get the best deal, it's essential to comparison shop by getting quotes from at least three to five lenders. You can find a list of mortgage lenders reviewed by LendingTree in the article, which includes companies like Alliant Credit Union, Ally Bank, and Bank of America.

As you start your homebuying journey, you'll need to choose a lender to work with. This is a crucial step, and you should take the time to shop around for the best mortgage rate.

You can compare mortgage rates by using an online rate-comparison site, such as LendingTree. These sites allow you to enter your information into one form and send it off to multiple lenders, which is important because mortgage rates change daily.

Alternatively, you can reach out to lenders yourself by calling them, visiting a bank near you, or getting rates online at many lenders' websites. If you're a first-time homebuyer with a lot of questions, or you have a complicated or unique financial situation, it may make sense to speak to someone.

By shopping around, you can learn about special deals that mortgage lenders may be offering on specific loan programs. You can also use the knowledge to negotiate for a better mortgage rate, and use your offers as leverage to ask lenders about matching the lowest mortgage rate you were quoted.

Here are the two options for comparing mortgage rates:

Choosing a lender is a crucial step in the homebuying process. It may sound like a hassle, but comparison shopping can save you tens of thousands of dollars.

To choose the best mortgage lender for you, you should get quotes from at least three to five lenders on the same day, since mortgage interest rates change daily. The annual percentage rate (APR) for each offer will show you the true cost of a loan, including interest and fees.

You can find a list of mortgage lenders reviewed by LendingTree in the article. Some of the lenders listed include Alliant Credit Union, Ally Bank, and Bank of America.

After selecting your top options, connect with lenders online or on the phone to finalize your details and lock in your rate. On Monday, January 06, 2025, the national average 30-year fixed mortgage APR is 7.05%, according to Bankrate's latest survey.

Here are some of the lenders listed by LendingTree:

Some lenders offer more flexibility for borrowers with lower credit scores or no credit history. This is a big deal, especially for first-time homebuyers who may not have established credit yet.

Government-backed mortgages can be a great option for those with lower credit scores, often offering more lenient credit requirements. For example, FHA loans have lower credit score requirements compared to conventional loans.

First-time homebuyers should look for lenders that offer down payment assistance or affordable mortgage programs specifically designed for these types of buyers. Some lenders, like Navy Federal Credit Union and Penfed Credit Union, offer such programs.

ARMs can be beneficial if you want to keep your monthly payment low and plan to refinance or sell before the rate starts adjusting in a few years. However, if you plan to keep your home long-term, a fixed-rate mortgage might be a better option.

Some lenders, like Guaranteed Rate and PennyMac, offer flexible mortgage options for borrowers with lower credit scores or no credit history. It's essential to shop around and find a lender that fits your needs.

Here are some lenders that offer beneficial features for borrowers:

Choosing a Lender and Home can be a daunting task, but understanding the benefits of a mortgage can help you make an informed decision.

Lower monthly payments are a significant advantage of a 30-year mortgage, allowing you to spread out your payments over time and have more money in your budget for other expenses.

Having a consistent principal and interest payment helps you better map out your housing expenses for the long term, making it easier to plan and budget.

A 30-year mortgage can also give you the opportunity to buy a more expensive home, since you'll be able to qualify for a larger loan amount with lower payments.

Lower monthly payments can provide more financial flexibility, allowing you to save for emergencies, retirement, college tuition, or home repairs and maintenance.

Here are some of the key benefits of a 30-year mortgage at a glance: