March 8, 2024—Rates Move Down – Forbes Advisor – Technologist

Today, the current average mortgage rate on a 30-year fixed mortgage is 7.34%, according to Curinos, while the average rate on a 15-year mortgage is 6.58%. On a 30-year jumbo mortgage, the average rate is 7.30%.

Current Mortgage Rates for March 8, 2024

30-Year Mortgage Rates

Today’s 30-year mortgage—the most popular mortgage product—is 7.34%, down 0.22 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 7.24%. Last week, the APR was the same.

Let’s say your home loan is $100,000 and you have a 30-year, fixed-rate mortgage with the current rate of 7.34%, your monthly payment will be about $688, including principal and interest (taxes and fees not included), the Forbes Advisor mortgage calculator shows. That’s around $147,809 in total interest over the life of the loan.

15-Year Mortgage Rates

Today, the 15-year mortgage rate sits at 6.58%, lower than it was at this time yesterday. Last week, it was 6.73%.

On a 15-year fixed, the APR is 6.54%. Last week it was 6.54%.

With an interest rate of 6.58%, you would pay $875 per month in principal and interest for every $100,000 borrowed. Over the life of the loan, you would pay $57,572 in total interest.

Jumbo Mortgage Rates

The current average interest rate on a 30-year fixed-rate jumbo mortgage is 7.30%. Last week, the average rate was 7.42%.

If you lock in today’s rate of 7.30% on a 30-year, fixed-rate jumbo mortgage, you will pay $685 per month in principal and interest per $100,000 in financing. That means that on a $750,000 loan, the monthly principal and interest payment would be around $5,139, and you’d pay around $1.10 million in total interest over the life of the loan

How To Calculate Mortgage Payments

Mortgages and mortgage lenders are often a part of purchasing a home, but it can be tricky to understand what you’re paying for—and what you can actually afford.

Using a mortgage calculator can help you estimate your monthly mortgage payment based on your interest rate, purchase price, down payment and other expenses.

Here’s what you’ll need in order to calculate your monthly mortgage payment:

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

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?

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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