April 12, 2024—15-Year and 30-Year Mortgage Rates Move Up – Forbes Advisor – Technologist

The current mortgage rates on a 30-year fixed mortgage rose by 0.14 percentage point in the last week to 7.58%.

Meanwhile, the APR on a 15-year fixed mortgage climbed 0.26 percentage point during the same period to 6.83%.

For existing homeowners, compare your current mortgage rates with today’s refinance rates.

Current Mortgage Rates for April 12, 2024

30-Year Mortgage Rates

Today’s 30-year mortgage—the most popular mortgage product—is 7.58%, up 0.14 percentage point from a week earlier.

The interest rate is just one fee included in your mortgage. You’ll also pay lender fees, which differ from lender to lender. Both interest rate and lender fees are captured in the annual percentage rate, or the APR. This week the APR on a 30-year fixed-rate mortgage is 7.60%. Last week, the APR was 7.35%.

Let’s say your home loan is $100,000 and you have a 30-year, fixed-rate mortgage with the current rate of 7.58%, your monthly payment will be about $705, including principal and interest (taxes and fees not included), the Forbes Advisor mortgage calculator shows. That’s around $153,692 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 6.83%. This same time last week, the 15-year fixed-rate mortgage was at 6.57%.

The APR on a 15-year fixed is 6.86%. It was 6.52% this time last week.

At today’s interest rate of 6.83%, a 15-year fixed-rate mortgage would cost approximately $889 per month in principal and interest per $100,000. You would pay around $60,043 in total interest over the life of the loan.

Jumbo Mortgage Rates

The current average interest rate on a 30-year, fixed-rate jumbo mortgage is 7.56%— 0.08 percentage point up from last week. The 30-year jumbo mortgage rate had a 52-week APR low of 5.00% and a 52-week high of 10.50%.

A 30-year jumbo mortgage at today’s fixed interest rate of 7.56% will cost you $703 per month in principal and interest per $100,000. On a $750,000 jumbo mortgage, the monthly principal and interest payment would be approximately $5,273.

How To Calculate Mortgage Payments

To get an estimate of your mortgage costs, using a mortgage calculator can help.

Simply input the following information:

• Home price
• Down payment amount
• Interest rate
• Loan term
• Taxes, insurance and any HOA fees

How Are Mortgage Rates Determined?

Mortgage interest rates are determined by several factors, including some that borrowers can’t control:

• Federal Reserve.The Fed rate hikes and decreases adjust the federal funds rate, which helps determine the benchmark interest rate that banks lend money at. As a result, mortgage rates tend to move in the same direction with the Fed’s rate decision.
• Bond market. Mortgages are also loosely connected to long-term bond yields as investors look for income-producing assets—specifically, the 10-year U.S. Treasury Bond. Home loan rates tend to increase as bond prices decrease, and vice versa.
• Economic health. Rates can increase during a strong economy when consumer demand is higher and unemployment levels are lower. Anticipate lower rates as the economy weakens and there is less demand for mortgages.
• Inflation. Banks and lenders may increase rates during inflationary periods to slow the rate of inflation. Additionally, inflation makes goods and services more expensive, reducing the dollar’s purchasing power.

While the above factors set the base interest rate for new mortgages, there are several areas that borrowers can focus on to get a lower rate:

• Credit score. Applicants with a credit score of 670 or above tend to have an easier time qualifying for a better interest rate. Typically, most lenders require a minimum score of 620 to qualify for a conventional mortgage.
• Debt-to-income (DTI) ratio. Lenders may issue mortgages to borrowers with a DTI of 50% or less. However, applying with a DTI below 43% is recommended.
• Loan-to-value (LTV) ratio. Conventional home loans charge private mortgage insurance when your LTV exceeds 80% of the appraisal value, meaning you need to put at least 20% down to avoid higher rates. Additionally, FHA mortgage insurance premiums expire after the first 11 years when you put at least 10% down.
• Loan term. Longer-term loans such as a 30-year or 20-year mortgage tend to charge higher rates than a 15-year loan term. However, your monthly payment can be more affordable over a longer term.
• Residence type. Interest rates for a primary residence can be lower than a second home or an investment property. This is because the lender of your primary mortgage receives compensation first in the event of foreclosure.

What Is the Best Type of Mortgage Loan?

Conventional home loans are issued by private lenders and typically require good or excellent credit and a minimum 20% down payment to get the best rates. Some lenders offer first-time home buyer loans and grants with relaxed down payment requirements as low as 3%.

For buyers with limited credit or finances, a government-backed loan is usually the better option as the minimum loan requirements are easier to satisfy.

For example, FHA loans can require 3.5% down with a minimum credit score of 580 or at least 10% down with a credit score between 500 and 579. However, upfront and annual mortgage insurance premiums can apply for the life of the loan.

Buyers in eligible rural areas with a moderate income or lower may also consider USDA loans. This program doesn’t require a down payment, but you pay an upfront and annual guarantee fee for the life of the loan.

If you come from a qualifying military background, VA loans can be your best option. First, you don’t need to make a down payment in most situations. Second, borrowers pay a one-time funding fee but don’t pay an annual fee as the FHA and USDA loan programs require.

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