Compare Current 30-Year Mortgage Rates

Compare 30-Year Fixed Mortgage Rates

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30-Year Mortgage Rate Trends

Like all interest rates, mortgage rates have been relatively high over the past year. For more context, here’s how the average 30-year fixed mortgage rate has fluctuated over the past two decades, according to data from Freddie Mac:

• 2002: The last time the rate hit 7% before the pandemic
• 2010-2019: Fluctuated between 3% and 5%
• 2020-2021: Fluctuated between 2% and 4% after Fed rate cuts
• 2022: Spiked from 3% to 7% in tandem with Fed rate hikes
• 2023-2024: Fluctuated between 6% and 8%
• End of September 2024: 6.08%

In September 2024, the Federal Reserve cut rates for the first time in four years. The Federal Rate tends to indicate the direction rates are trending, and with recent cuts, we may start to see 30-year mortgage rates come down. These rates may not see lows of 2% and 3% anytime soon, but rate cuts may offer some relief from the recent high-rate environment.

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How Does a 30-Year Mortgage Work?

A 30-year mortgage is a secured installment loan. Upon approval, the mortgage lender lets you borrow a lump sum to buy a qualifying home. In exchange, you repay the amount, plus interest and fees, through regular payments over 30 years. 

Costs

The cost of a mortgage includes interest and closing costs. Lenders set their interest rate ranges based on the market. Then, you get assigned a rate within the range based on factors like your income, debt and credit. On the other hand, closing costs often range from 2% to 6% of the loan amount and include charges such as title fees, underwriting fees, real estate commissions, discount points and real estate appraisals. The median total loan costs for mortgages was $5,954 in 2022, according to the latest data from the Consumer Financial Protection Bureau. 

Down Payment

To get approved for a mortgage, lenders typically require you to make a down payment equal to a percentage of the home’s purchase price. While conventional loans traditionally required 20% down, loan programs with smaller down payment requirements have become more common.  For example, Fannie Mae’s Conventional 97 loan program allows down payments of just 3%. However, if you opt for a down payment under 20%, the lender typically requires you to carry private mortgage insurance (PMI). 

Monthly Payments

Monthly mortgage payments are calculated based on your loan amount, loan term and interest rate. If you get a fixed mortgage rate, your payment amount will be the same throughout the loan term. However, you won’t pay an equal amount of interest on each payment. The loans are typically structured so that your payments are more interest-heavy at the outset and gradually switch to being more principal-heavy as the loan term progresses. 

Collateral

If you make all your mortgage payments on time, you’ll own your house free and clear when the 30-year loan term ends. However, if you miss payments and go into default, your lender can seize and sell your home to recover the outstanding balance. As a result, if you foresee missing a payment, it’s best to contact your lender right away and try to avoid foreclosure.

30-Year or 15-Year Mortgage: Which Is Better for You?

Many lenders offer mortgages with 15- and 30-year terms, but which is better? It depends. A 30-year mortgage spreads out the cost of your home over a longer period, which results in a lower monthly payment amount. However, all things equal, a longer loan term presents more risk for the lender, which means a higher interest rate. Further, you’ll pay interest twice as long with a 30-year mortgage, which means a much higher overall loan cost.

Here’s an example of how the costs would vary between a 15- and 30-year loan if you bought a $430,000 home and made a 20% down payment of $86,000. 

	15-Year Mortgage	30-Year Mortgage	Difference
Financed amount	$344,000	$344,000	$0
Interest rate	6.13%	6.87%	+0.74%
Monthly payment amount	$3,658.85	$2,823.36	-$835.49
Interest cost	$228,594.22	$586,406.33	+$357,812.11
Overall cost	$658,594.22	$1,016,406.33	+$357.812.11

In this scenario, the 15-year mortgage would cost $835.49 more per month but would save you more than $357,812.11 over the loan term. Whether you prefer the lower upfront cost or lower overall cost is something you’ll have to weigh. 

Despite the sizeable overall savings 15-year mortgages offer, Freddie Mac estimates that 90% of homebuyers opt for a 30-year fixed-rate mortgage due to its affordability and flexibility. 

How To Prepare To Get a Mortgage

Once you decide to buy a home, you'll need to organize a few things. The most important are your credit, income, debt-to-income (DTI) ratio and assets. 

Credit

When you apply for a mortgage, one of the first things lenders do is check your credit. A higher credit score will help you get approved and land a lower interest rate. Additionally, lenders review the details on your credit reports to see how you’ve managed credit accounts in the past. It can help if you: 

• Make all of your credit payments on time
• Boost your score with Experian Boost
• Wait for derogatory marks to drop off before applying
• Dispute any errors in your reports
• Pay down revolving credit lines as much as possible
• Consider paying down installment loans to reduce your DTI ratio
• Don’t apply for or take on any new credit in the months leading up to your mortgage applications

You can check your credit scores and reports for free with these companies:

• Free credit reports: AnnualCreditReport.com
• Free FICO scores: Experian
• Free VantageScores: Many providers, such as Chase and Capital One (you don’t need to be a customer to use their tools)

If you find that you have credit issues, buying a home isn’t necessarily off the table. Various programs exist that may still be able to help you buy a home with bad credit. 

Income 

Mortgage lenders will also be very interested in your income. They often require proof of two years of stable income history. Additionally, they’ll look at the average amount you make to determine how much you can borrow. 

The general rule of thumb is that the monthly cost for a home’s principal, interest, taxes and insurance can’t exceed 28% of your monthly income. For example, if you make $10,000 per month, your housing costs can’t exceed $2,800. 

By calculating your average income, you can estimate the amount of house you’ll likely be able to afford. 

DTI Ratio

Your DTI ratio is the percentage of your monthly gross income that goes to debt payments. You can find it by dividing your monthly debt expenses by your monthly gross income. Lenders generally require that your DTI ratio, including your mortgage and housing expenses, is less than or equal to 36%. 

As you prepare to buy a house, figuring out where your DTI ratio stands can further help you understand how much house you can afford. For example, if you have a monthly income of $6,000 and pay $1,400 per month toward debts, your DTI ratio would be 23%. To stay at or below a 36% DTI, your house payment and expenses couldn’t exceed $760. If you wanted to increase that, you’d need to either increase your income or pay off debts. 

Savings and Other Assets

Lastly, you’ll need to plan for the upfront costs. Mortgages require down payments of up to 20%, closing costs of up to 6% and possibly upfront mortgage insurance. As a result, lenders often require a Proof of Funds (POF) document from your bank that shows you have sufficient funds to cover the estimated costs. If you can’t afford the upfront costs, you can also look into assistance programs like homebuyer grants. 

Additionally, many lenders will ask if you have other assets such as vehicles, savings accounts, investment accounts or retirement accounts. While these aren’t required, they can reduce the risk you present as a borrower and help you get a lower interest rate. 

How To Get 30-Year Mortgage Quotes

Getting mortgage quotes has become much easier over the past decade. You no longer have to visit your local bank and sit through a painstaking process that takes hours. Instead, you can apply online from home within a few minutes. 

To get started, make a list of reputable mortgage lenders that offer online quotes. The list above can be a good starting point. From there, visit each site and go through the prequalification process. You’ll often be asked questions about your income, employment, expenses and assets. 

If you prequalify, the lender will present you with an estimate of the loan you can get based on the information you provided. If it sounds like a good fit, you can proceed with the preapproval process.

What Is the Difference Between Mortgage Prequalification and Preapproval

Mortgage prequalifications are typically based on self-reported information and a soft credit check. They can give you an idea of what you qualify for but won’t hold ground for any official purpose. 

A preapproval is often issued once you’ve allowed a lender to perform a hard credit check and submitted proof to back up your claims. For example, lenders may request bank statements, pay stubs or tax returns to prove your income. 

Once you get preapproved, you can request a preapproval letter, which serves as proof that you have the means to purchase a home. You can then use the letter to make an offer.

How To Compare Mortgage Quotes

While getting preapproved with at least one lender is required, it’s better to get multiple preapprovals. Shop around and compare the quotes to see which is the best for your situation. When doing so, consider the following key factors:

• Purchase price: The maximum purchase price you can afford using the lender
• Loan amount: The maximum amount you can borrow
• Loan type: The type of loan you can get
• Down payment: The minimum down payment amount
• Interest rate: The current interest rate on offer
• Closing costs: The closing costs you’ll owe 
• Customer service: The quality of the customer service

Ideally, you’ll find the loan amount you need, high-quality customer service, low costs and a loan program that works with your budget and situation. 

Tip: While getting multiple mortgage preapprovals will result in multiple hard credit checks, they’ll only count as one if you rate shop within a 45-day window.