Mortgage rates have shifted since last week and last month – some rates are a little lower while others are a little higher. Overall, it’s a good day to secure a low price.
When you’re ready to make a purchase or refinance, you’ll likely want a fixed-rate mortgage rather than an adjustable-rate mortgage. ARM tariffs currently start higher than fixed tariffs, and you risk your tariff rising even further in a few years. It’s safer to secure an all-time low rate while you can.
A mortgage rate is the interest rate you pay on the money you borrow from a lender to buy or refinance your home. It’s basically the fee you pay to borrow, expressed as a percentage. For example, you could take out a $ 200,000 mortgage plus a 2.75% interest rate.
There are two types of mortgage rates: fixed and adjustable.
A Fixed-rate mortgage locks your interest rate for the life of your mortgage. Even if interest rates go up or down in the US market, your rate will stay the same. This is particularly good at the moment as interest rates are at all-time lows.
A adjustable rate mortgage retains your tariff for a set period of time and then changes it regularly. A 10/1 ARM locks your rate for the first 10 years, then the rate fluctuates once a year. This is a riskier approach these days as the ARM rates are higher than the fixed rates and you risk your rate going up later.
Mortgage rates are determined by a combination of factors – some you can control and some you can’t.
The main external factor is the economy. Interest rates tend to be higher when the US economy is flourishing and lower when the US economy is in trouble. The two main economic factors that affect mortgage rates are employment and inflation. When employment and inflation rise, mortgage rates tend to rise.
you can control yours Finances, but. The better your credit rating, debt-to-income ratio, and down payment, the lower your interest rate should be.
After all, your mortgage rate depends on what Type of mortgage you get. Government-supported mortgages (such as FHA, VA, and USDA loans) charge the lowest interest rates, while jumbo mortgages charge the highest interest rates. You also get a lower interest rate with a shorter mortgage term.
Each type of mortgage has different minimum creditworthiness requirements. This is how it usually breaks down:
However, these are just the general rules of thumb. Every lender has the right to ask for a higher or lower credit rating. (Although the FHA minimums listed here are the lowest any lender will allow.)
If your credit score is higher than the minimum required by a lender, you can get a better mortgage rate.
Find out more and receive quotes from multiple lenders »
Mortgage rates last week and month
Mortgage rate trends
Refinancing rate trends
Mortgage and refinance rates by state
Check the current prices in your state at the links below.
About the authors
Laura Grace Tarpley is an editor at Personal Finance Insider, specializing in mortgages, refinancing and lending. She is also a certified trainer for personal finance (CEPF). In her five years covering personal finance, she has written extensively on credit management options.
Ryan Wangman is a Review Fellow at Personal Finance Insider reporting on mortgages, refinances, bank accounts, bank reviews, and loans. In his previous personal finance writing experience, he wrote about creditworthiness, financial literacy, and home ownership.