Mortgage Calculator

While experts initially predicted rates were going to drop in 2024, it’s now likely that rates will not decline significantly until later this year or early 2025. At the Federal Reserve meeting earlier this month, officials stated that it could take longer than previously expected for inflation to cool, which will delay the reduction of interest rates (currently at a 23-year high).

Between the high interest rates, low inventory, and high home prices – which CoreLogic reported rose 5.5% over the past year – prospective homebuyers are experiencing several financial obstacles that could make it nearly impossible for their housing dreams to become a reality. Additionally, many current homeowners are choosing to hold off on selling their properties because of high interest rates and home prices, a phenomenon dubbed “lock-in effect,” according to a Fannie Mae study.

Interest rates tend to change daily, and sometimes rates even change during the day. You can compare current mortgage rates from our partner lenders at any time. You will get an idea of the interest rate, APR, closing costs, and monthly payment, but you should bear in mind that these numbers will change depending on your credit score and other financial details.
 

Daily changes can usually be measured in hundredths of a percentage point. For example, average rates might be 7.12% on Tuesday and 7.06% on Wednesday. However, sudden and unexpected major events like a public health crisis or bank failure can make rates more volatile.

You can get the best mortgage rate by making yourself a low-risk borrower and submitting applications with multiple lenders. Here are a few tips:
 

• Don’t miss payments: If you have credit cards, student loans, auto loans, or other debts, make sure you’re never more than 30 days late. Late payments can knock you down into a lower credit score tier.
   
• Pay down debt: Reducing the total debt you owe can help in two ways. First, lowering your credit utilization ratio can boost your credit score. Second, it can lower your debt-to-income ratio (DTI).
   
• Choose a shorter term: The interest rate is often at least 0.5 percentage points lower on a 15-year mortgage than a 30-year mortgage.
   
• Increase your down payment: Investing more of your own money upfront makes you less likely to walk away from your home and your mortgage.
   
• Shop around: You won’t know if you’re getting the lowest rate unless you submit applications and get loan estimates from multiple lenders.
   
• Negotiate: You may be able to use competing loan estimates to secure a better deal.

A fixed-rate mortgage has the same interest rate for the entire loan term. On a 30-year mortgage with a fixed rate of 6%, your interest rate will be 6% for all 30 years.
 

An adjustable-rate mortgage (ARM) has a fixed interest rate at the beginning of the loan term. After that, the rate adjusts periodically.
 

For example, a 5/1 ARM would have the same interest rate every year for the first five years. After that, the rate would adjust once per year for the remaining 25 years of the 30-year term. An ARM’s changes are subject to a floor and a ceiling as well as caps on annual increases.
 

Fixed-rate mortgages, which tend to be more popular than ARMs, provide predictability and peace of mind. For the average person buying a house, it’s easier to budget for a monthly payment that never changes.
 

An ARM may be more attractive if you’re taking out a jumbo loan. The initial interest rate on an ARM is often lower than the rate on a 30-year fixed-rate mortgage. Interest rate differences have a bigger impact on your monthly payment the larger your loan is.
 

On a $1 million 30-year home loan with a $200,000 down payment, the monthly payment would be $6,181 if the interest rate was 7.25%. If an ARM offered a 6.75% interest rate, you could lower your monthly payment to $5,912, a savings of $269 per month or $16,140 over five years.

The interest rate is the percentage of your loan balance you pay annually to borrow money. For example, if your interest rate is 7% and your loan balance is $100,000, you’ll pay $7,000 in interest for one year.
 

The APR, or annual percentage rate, combines the interest rate and all the other costs associated with the loan. For a mortgage with closing costs, the APR will be higher than the interest rate. Adding to the example above, if your closing costs are $5,000, your APR will be 7.537%.

Read more about the differences in APR and interest rates.

Paying discount points allows you to lower your mortgage rate by prepaying interest as a lump sum of cash at closing.
 

For example, you might be able to get an interest rate of 5.875% by paying 3.035 discount points, which would cost $10,623 on a $350,000 loan. On the same loan, your interest rate might be 6.375% if you paid 1.158 discount points, which would cost $4,053.
 

"With a 15-year mortgage, the monthly payment would be $2,930 on the first loan and $3,025 on the second, a difference of $95."