Home loan rates drop: current mortgage rates August 13, 2024 – Surge Radio

The average for a 30-year fixed mortgage today is 6.59%, a decrease of -0.10% compared to seven days ago. The average rate for a 15-year fixed mortgage is 5.99%, which represents a decrease of -0.15% compared to a week ago. To see the trend in mortgage rates, see the chart below.

With inflation slowing, the Federal Reserve is positioning itself to cut its first interest rate later this year. The housing market will not recover overnight, but mortgage rates are expected to fall in the coming months.

As mortgage rates begin to fall, be ready to take advantage. Experts recommend shopping around and comparing several offers to get the lowest rate. Enter your information here to receive a personalized quote from one of CNET’s partner lenders.

About these rates: Like CNET, Bankrate is owned by Red Ventures. This tool shows rates from lender partners that you can use when comparing different mortgage rates.

How do I choose a mortgage term?

Every mortgage has a loan term or payment schedule. The most common mortgage terms are 15 and 30 years, although there are also 10, 20 and 40 year mortgages. In a fixed rate mortgage, the interest rate is fixed for the life of the loan, providing stability. With an adjustable rate mortgage, the interest rate is only fixed for a certain period of time (usually five, seven, or 10 years), after which the rate changes annually based on the market. Fixed rate mortgages are a better option if you plan to stay in a home for the long term, but adjustable rate mortgages can offer lower interest rates up front.

30-year fixed rate mortgage

For a 30-year fixed-rate mortgage, the average rate you’ll pay today is 6.59%. The most common loan term is a 30-year fixed mortgage. You will often have a higher interest rate than a 15-year mortgage, but a lower monthly payment.

15-year fixed rate mortgage

Today, the average rate for a 15-year fixed mortgage is 5.99%. Although you will have a larger monthly payment than a 30-year fixed mortgage, a 15-year loan usually has a lower interest rate, allowing you to pay less interest in the long run and your pay off mortgage faster.

5/1 Adjustable Rate Mortgage

A 5/1 adjustable rate mortgage has an average rate of 6.33% today. You can usually get a lower initial interest rate with a 5/1 ARM for the first five years of the mortgage. But you could pay more after that time, depending on how the rate changes each year. If you plan to sell or refinance your home within five years, an ARM may be a good option.

Current Mortgage Rate Trends

Homebuyers face an uphill battle with high mortgage rates, inflated home prices and limited housing inventory. Although mortgage rates have seen some improvements recently, they are still more than double the average rates we saw in 2020 and 2021.

Mortgage rates respond to a number of factors, including the bond market, investor expectations, inflation, and the Federal Reserve’s monetary policy decisions.

When inflation is high, the Federal Reserve raises short-term interest rates to slow the economy and relieve price pressures. Higher interest rates make it more expensive for banks to borrow money, so banks raise rates on consumer loans, such as mortgages, to compensate.

In recent years, the Federal Reserve raised its short-term interest rate from near zero to a target range of 5.25% to 5.5%, and mortgage rates rose in response.

Will mortgage rates go down this year?

Most experts predict that average mortgage rates will fall by around 6.5% in the coming months. We are unlikely to see rates below 6% until later in 2025.

A sustained decline in home loan rates will depend on a number of factors, including upcoming labor and inflation data. If economic growth continues to slow, investors and market watchers are certain the Federal Reserve will cut interest rates.

“As history shows, once the recession starts, it starts a series of restrictions over a long period of time,” he said. Greg Shergeneral manager of NFM loans. “That first cut will allow those who are connected to housing or who are interested in buying to breathe. “

Most experts are betting on a rate cut in September, although some believe the Federal Reserve could wait until the end of the year to act. The central bank usually refrains from making major policy decisions too close to elections, so a cut in November is largely off the table.

One thing is certain: a return to the 2-3% mortgage rates of just a few years ago is unlikely.

Here’s a look at where some major housing authorities expect average mortgage rates to go.

Calculate your monthly mortgage payment

Getting a mortgage should always depend on your financial situation and your long-term goals. The most important thing is to make a budget and try to adjust it according to your possibilities. CNET’s mortgage calculator below will help homebuyers prepare for monthly mortgage payments.

How can I get the lowest mortgage rates?

Although mortgage rates and home prices are high, the housing market will never be unaffordable. It’s always a good time to save for a down payment and improve your credit score to help you get a competitive mortgage rate when the time is right.

1. Save for a bigger down payment: Although a 20% down payment is not required, a larger down payment means you can get a smaller mortgage, which helps you save on interest.
2. Increase your credit score: You can qualify for a conventional mortgage with a credit score of 620, but a higher score of 740 will at least get you better rates.
3. Pay off the debt: Experts recommend a debt-to-income ratio of 36% or less to help you qualify for the best rates. Having no other debt will put you in a better position to manage your monthly payments.
4. Loans and research support: Government-backed loans have more flexible lending requirements than conventional loans. Some private or government-sponsored programs can help you with your down payment and closing costs.
5. Find lenders: Researching and comparing multiple loan offers from different lenders will help you get the lowest mortgage rate for your situation.