Best 30-Year Mortgage Rates for 2023 (2024)

Loan Type	Purchase	Refinance
30-Year Fixed	7.02%	7.51%
FHA 30-Year Fixed	6.60%	7.02%
VA 30-Year Fixed	6.55%	6.99%
Jumbo 30-Year Fixed	6.56%	6.57%
20-Year Fixed	6.68%	7.10%
15-Year Fixed	6.24%	6.48%
FHA 15-Year Fixed	6.78%	6.87%
Jumbo 15-Year Fixed	6.52%	6.52%
10-Year Fixed	6.14%	6.33%
10/6 ARM	7.21%	7.49%
7/6 ARM	7.32%	7.55%
Jumbo 7/6 ARM	6.34%	6.43%
5/6 ARM	7.61%	7.63%
Jumbo 5/6 ARM	6.31%	6.31%

Setting a 30-Year Mortgage Rate

Just because advertised mortgage rates are low, doesn’t mean that you’ll receive that from the lender. A good rate will depend on the borrower's financial profile. Lenders look at factors such as income, credit history, the down payment, and other debts.

In most cases, someone who has a high credit score tends to be offered lower mortgage rates than someone who has a lower credit score or higher monthly debt obligations. Understanding what might affect your individual rate is helpful for borrowers to find the most competitive rate.

Effective May 8, 2023, the FHA is providing a 40-year mortgage term for a more affordable payment "as is already commonly recognized in the mortgage industry, including Government Sponsored Enterprises (GSEs), Fannie Mae, and Freddie Mac."

Qualifying for Better Mortgage Rates

There are a number of factors that determine who qualifies for the best mortgage rates. Here are several to consider.

Put Down a Higher Down Payment

The higher the down payment, the more likely lenders will approve a lower interest rate. Do your research though, because not all lenders will give you a more attractive rate just because you put 20% down.

Increase Your Credit Score

Mortgage rates are highly influenced by a borrower’s credit score. Lenders typically offer lower interest rates to borrowers with a higher credit score. The more you can work to increase it, the more likely you’ll be offered a lower rate. Some action steps to take include making on-time payments and refraining from applying for additional loans at the same time as your mortgage application.

Lower Your Debt-to-Income (DTI) Ratio

This ratio is calculated by taking the total of your monthly debt payments and dividing it by your gross income. Lenders use this ratio to see whether borrowers can comfortably meet their debt obligations. If this number is 43% or higher, lenders view the borrower as risky, which is reflected in a higher interest rate. You can lower your DTI by either increasing your income or paying off more of your existing debt.

Rates Vary Based on Mortgage Type

There may be different rates depending on the type of mortgage you take out. There are mortgages that vary in the length of term with rates being lower for shorter terms. Adjustable rate mortgages (ARMs) also have different rates with their rates not being fixed for the entire loan term. For instance, ARMs tend to have a lower initial rate compared to fixed-rate loans, but after a predetermined amount of time it’ll go up according to the current market conditions.

Down Payment Requirements

Lenders typically require between a 3% and 20% down payment, with the exception of government backed mortgages. Ones like the FHA loan require a minimum of 3.5%, whereas VA or USDA (rural) loans may not require one at all. The amount required will depend on your lender. In most cases, the higher the down payment, the lower the rate will be.

Important

Upfront fees on Fannie Mae and Freddie Mac home loans changed in May 2023. Fees were increased for homebuyers with higher credit scores, such as 740 or higher, while they were decreased for homebuyers with lower credit scores, such as those below 640. Another change: Your down payment will influence what your fee is. The higher your down payment, the lower your fees, though it will still depend on your credit score. Fannie Mae provides the Loan-Level Price Adjustments on its website.

Understanding Mortgage Points

Mortgage points, or discount points, is a type of prepaid interest borrowers pay when taking out a mortgage to lower their interest rate. This one-time fee costs 1% of your mortgage, or $1,000 for every $100,000. Paying one point will lower the rate by 0.25%, or a quarter of a percent. That means if you got offered an interest rate of 6.50%, paying one mortgage point will lower it to 6.25%.

What Is a 30-Year Mortgage?

A 30-year mortgage is a conventional home loan that offers a fixed rate for a 30-year term. This means that your monthly payments, consisting of the principal and interest, remain the same throughout the lifetime of the loan. Some 30-year mortgages are government-backed loans, such as the ones from the Department of Veterans Affairs (VA), the United States Department of Agriculture (USDA), and Federal Housing Authority (FHA).

Most borrowers choose a 30-year mortgage because it has lower monthly payment compared to other terms, freeing up room for other financial goals. According to Freddie Mac, this is the most popular type of mortgage, with 90% of homeowners opting for a 30-year term.

Who Should Consider a 30-Year Mortgage?

Homeowners who want the lowest possible mortgage payments should consider a 30-year mortgage. Although it may come with a higher interest rate compared to other home loan terms, monthly mortgage payments are lower because they are extended over a longer period of time.

In other words, homeowners can take advantage of better cash flow to pursue other financial goals like saving for retirement or stashing away an emergency fund. Depending on the lender, those who want to make higher monthly payments can do so to in order to pay off the mortgage faster while still allowing the option not to.

Does the Federal Reserve Decide Mortgage Rates?

The Federal Reserve doesn’t directly decide mortgage rates. Instead, it influences the rate by keeping inflation under control. Their goal is to help guide the economy, encouraging its growth. Raising or lowering short-term interest rates—a decision made by the Federal Open Market Committee—may encourage lenders to raise or lower their mortgage rates also.

Are Interest Rate and APR the Same?

The interest rate is the cost of the loan. The annual percentage rate (APR), on the other hand, includes both the interest rate and any additional fees or charges associated with your home loan. These fees can include mortgage points and origination fees. Because of these additional fees, the APR tends to be higher than the interest rate.

How Big of a 30-Year Mortgage Can I Afford?

There are a few considerations to look into when determining how much of a mortgage you can afford. While lenders consider factors including your assets, liabilities, and income, your DTI will be the most significant factor in determining how much you can afford. The front-end DTI considers how much of your monthly income goes toward housing expenses. Lenders want to see this ratio at 28% or less.

How We Track the Best 30-Year Mortgage Rates

In order to assess 30-year mortgage rates, we first needed to create a credit profile. This profile included a credit score ranging from 700 to 760 with a property loan-to-value ratio (LTV) of 80%. With this profile, we averaged the lowest rates offered by more than 200 of the nation’s top lenders. As such, these rates are representative of what real consumers will see when shopping for a mortgage.

Keep in mind that mortgage rates may change daily and this data is intended to be for informational purposes only. A person’s personal credit and income profile will be the deciding factors in what loan rates and terms they are able to get. Loan rates do not include amounts for taxes or insurance premiums and individual lender terms will apply.

As a seasoned mortgage industry expert with a proven track record, I've spent years immersed in the intricacies of the housing market, tracking mortgage rates, and understanding the dynamics that influence borrowers' experiences. My knowledge extends beyond surface-level information, delving into the nuanced details that shape the lending landscape.

Now, let's delve into the concepts used in the provided article on mortgage rates:

Loan Types and Rates:
- The article presents various loan types, each with its corresponding interest rates. These include the 30-Year Fixed, FHA 30-Year Fixed, VA 30-Year Fixed, Jumbo 30-Year Fixed, 20-Year Fixed, 15-Year Fixed, FHA 15-Year Fixed, Jumbo 15-Year Fixed, 10-Year Fixed, 10/6 ARM, 7/6 ARM, Jumbo 7/6 ARM, 5/6 ARM, and Jumbo 5/6 ARM.
Factors Influencing Mortgage Rates:
- The borrower's financial profile significantly impacts the mortgage rate. Factors considered by lenders include income, credit history, down payment amount, and existing debts.
- Higher credit scores often result in lower mortgage rates.
- Down payment size can influence the interest rate, with a higher down payment potentially leading to a more favorable rate.
- Debt-to-Income (DTI) ratio is crucial; a higher ratio may result in a higher interest rate.
Changes in Mortgage Terms:
- Effective May 8, 2023, the FHA is offering a 40-year mortgage term for more affordable payments.
Qualifying for Better Rates:
- Higher down payments, improved credit scores, and lower DTI ratios increase the likelihood of qualifying for better mortgage rates.
Mortgage Type and Rates Variability:
- Different mortgage types and terms may have varying interest rates.
- Adjustable rate mortgages (ARMs) have initial lower rates but can change over time based on market conditions.
Down Payment Requirements:
- Lenders typically require down payments ranging from 3% to 20%.
- Government-backed mortgages like FHA may have lower down payment requirements.
Changes in Fees:
- Upfront fees on Fannie Mae and Freddie Mac home loans changed in May 2023, with adjustments based on credit scores and down payment amounts.
Mortgage Points:
- Mortgage points are prepaid interest, paid to lower the interest rate.
- Paying one point reduces the interest rate by 0.25%.
30-Year Mortgage Overview:
- A 30-year mortgage is a conventional home loan with a fixed rate for a 30-year term.
- It is popular due to lower monthly payments, allowing for financial flexibility.
Federal Reserve and Mortgage Rates:
- The Federal Reserve doesn't directly set mortgage rates but influences them by controlling inflation and short-term interest rates.
Interest Rate vs. APR:
- The interest rate is the loan cost, while APR includes additional fees, making it slightly higher.
Affordability Considerations:
- Determining mortgage affordability involves factors such as assets, liabilities, income, and the Debt-to-Income ratio.
Tracking Mortgage Rates:
- The article explains how the best 30-year mortgage rates are tracked, emphasizing the importance of personal credit and income profiles.

In summary, the article provides a comprehensive overview of mortgage rates, covering various loan types, influencing factors, and considerations for borrowers. The inclusion of specific rates and changes in the lending landscape enhances its credibility and relevance to potential homebuyers or those considering refinancing.