Today, the mortgage interest rate on a 30-year fixed mortgage is 7.40%, according to Curinos, while the average rate on a 15-year mortgage is 6.57%. On a 30-year jumbo mortgage, the average rate is 7.38%.
Current Mortgage Rates for June 5, 2024
30-Year Mortgage Rates
Borrowers will pay less in interest this week as the average rate on a 30-year mortgage is 7.40% compared to a rate of 7.61% a week ago.
The annual percentage rate (APR), which includes the interest and all of the lender fees, on a 30-year, fixed-rate mortgage is 7.42%.
If your mortgage is $100,000 and you have a 30-year, fixed-rate mortgage with the current rate of 7.40%, you will pay about $692 per month in principal and interest (taxes and fees not included), the Forbes Advisor mortgage calculator shows. That’s around $149,159 in total interest over the life of the loan.
15-Year Mortgage Rates
The average interest rate on a 15-year mortgage (fixed-rate) sits at 6.57%. This same time last week, the 15-year fixed-rate mortgage was at 6.88%.
On a 15-year fixed, the APR is 6.61%. Last week it was 6.61%.
At today’s interest rate of 6.57%, a 15-year fixed-rate mortgage would cost approximately $875 per month in principal and interest per $100,000. You would pay around $57,523 in total interest over the life of the loan.
Jumbo Mortgage Rates
Today’s average interest rate on a 30-year fixed-rate jumbo mortgage fell 0.18 point from last week to 7.38%.
Borrowers with a 30-year, fixed-rate jumbo mortgage with today’s interest rate of 7.38% will pay approximately $691 per month in principal and interest per $100,000. On a $750,000 jumbo mortgage, the monthly principal and interest payment would be approximately $5,183.
How Much House Can I Afford?
Everyone’s budget and financial goals vary. How much house you can afford comes down to a number of factors, including what you earn and what you owe. You’ll also want to consider how much you want to save for retirement, school and other expenses down the road.
Here are a few basic factors that go into what you can afford:
- Income
- Debt
- Debt-to-income ratio (DTI)
- Down payment
- Credit score
How Are Mortgage Rates Determined?
Home loan borrowers can qualify for better mortgage rates by having good or excellent credit, maintaining a low debt-to-income (DTI) ratio and pursuing loan programs that don’t charge mortgage insurance premiums or similar ongoing charges that increase the loan’s annual percentage rate (APR).
Comparing rates from different mortgage lenders is an excellent starting point. You may also compare conventional, first-time homebuyer and government-backed programs like FHA and VA loans, which have different rates and fees.
For the most part, several economic factors influence the trajectory of rates for new home loans. The recent Federal Reserve rate hikes don’t directly cause mortgage rates to rise but have indirectly caused the interest rates for many long-term loans to increase. Rates are more likely to decrease when the Fed pauses or decreases its benchmark Federal Funds Rate.
Further, the inflation rate and the general state of the economy directly impact interest rates. High inflation and a strong economy typically signal higher rates. Cooling consumer demand or inflation may help rates decrease.
What Is the Best Type of Mortgage Loan?
Many home buyers are eligible for several mortgage loan types. Each program can have its own advantages:
- Conventional mortgage. A conventional home loan is ideal for borrowers with good or excellent credit to qualify for competitive rates. Additionally, making a minimum 20% down payment helps you waive private mortgage insurance premiums.
- FHA loan. An FHA home loan is best when applying with imperfect credit or a low down payment. You can put as little as 3.5% down with a credit score above 580. A minimum 10% down payment is necessary for credit scores ranging from 500 to 579.
- VA loan. Borrowers with a qualifying military background may prefer a VA loan for its flexibility. A down payment may not be required. While you pay a one-time funding fee, there are no ongoing mortgage insurance premiums or service fees.
- USDA loan. Applicants in eligible rural areas can buy or build a home with no down payment, although an upfront and annual guarantee fee applies. Additionally, income requirements apply and this program requires a moderate income or lower.
- Jumbo loan. Homebuyers in a high-cost-of-living area will need to apply for a jumbo loan when the loan amount exceeds the Federal Housing Finance Agency’s conforming loan limits. The limit in most municipalities is $726,200 in 2023.
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