Compare Today's 30-Year Mortgage Rates - SmartAsset (2024)

30-Year Fixed Mortgage Rates

If you qualify for a 30-year fixed-rate mortgage, you’ll make the same fixed payments over the course of 360 months to pay for your home. With these mortgages, your interest rate won't change over the life of the loan. So if you lock in a rate of 5.34%, which was the average 30-year fixed mortgage rate for 2022, it will stay at 5.34% over the course of those three decades.

This is different from an adjustable-rate mortgage (ARM), which comes with interest rate changes throughout the life of the loan. In other words, you could start out with 3.50% interest rate, and five years later that rate may jump to 4.25%, in addition to changing every year after that for a total of 30 years.

Fixed-rate mortgages allow you to know exactly how much your mortgage bill will be each month. It can be easier to budget and set aside money to cover your housing-related expenses when you know the amount you need to set aside on a monthly basis won’t change.

A financial advisor can aid you in planning for the purchase of a home. To find a financial advisor who serves your area, try our free online matching tool.

Historical 30-Year Fixed Mortgage Rates

In the early 1980s, countries around the world were in the midst of a recession. Mortgage rates were in the double-digits for 30-year fixed-rate home loans. According to data from Freddie Mac, annual mortgage rates averaged as high as 16.63% in 1981. Since then, mortgage rates have fallen substantially, as rates haven’t climbed higher than 10% since 1990.

At the start of the housing crisis in 2008, average annual rates on 30-year fixed mortgages hovered around 6%. In 2020 and 2021, though, rates fell below 3.00% at many lending institutions. The average 30-year fixed mortgage rate for 2022 was 5.34%.

30-Year Fixed Mortgage Rates*

YearAverage Annual Mortgage Rate

*These annual average mortgage rates are from Freddie Mac.

When 30-year fixed mortgage rates are low, homeownership is cheaper and therefore generally more accessible, particularly for first-time buyers. In addition, many existing homeowners will refinance in order to lock in lower interest rates. At the same time, low mortgage rates can indicate that an economy is slow.

How 30-Year Fixed Mortgage Rates Stack Up Against Other Mortgage Rates

People who decide to take 30-year fixed-rate mortgages are generally looking for a lower monthly payment than those who take on 15-year fixed-rate mortgages. Since the termlength of a 30-year fixed loan is longer, they tend to be cheaper on a monthly basis, but more expensive in the long run.

For example, take a family of four. Let’s say they decide to buy a $250,000 house with 20% down ($50,000) and lock in a 30-year fixed-rate mortgage at 5.34%. The monthly payments will be about $1,116 (not including home insurance or real estate tax). In comparison, a 15-year fixed rate mortgage at 5% has mortgage payments of $1,582 per month. While the interest rate is better (5% vs 5.34%), the amount paid per month is almost $470 more in this scenario. For this hypothetical family, the $5,600 per year difference is needed for groceries, school expenses and other monthly payments. Paying off the mortgage 15 years sooner is not their concern. It’s more important for them to have the extra $470 per month for expenses.

Fixed mortgage rates are typically higher than ARM rates. If you opt for an adjustable rate mortgage, your mortgage rate will be low in the beginning of your loan term but will then increase as time passes. So while a fixed rate can mean a higher rate, it stays the same over the life of the loan.

30-Year Fixed Mortgage Rate Quotes

A mortgage rate quote gives you an estimate of the kind of interest rate you qualify for based on the home’s purchase price, your credit score, your down payment and the location of the home you’re buying. The mortgage rate quote will also include an annual percentage rate (APR) and an estimate of the fees you’ll pay for getting a lender to process your loan application.

Unlike your interest rate, your APR will reflect the true cost of taking on a 30-year fixed mortgage rate. The APR factors in the fees you’ll be required to pay. As you’re comparing mortgage rates, it’s important to pay attention to each APR.

How to Get a Low 30-Year Fixed Mortgage Rate

Compare Today's 30-Year Mortgage Rates - SmartAsset (1)

Getting the lowest possible mortgage rate for your 30-year fixed home loan is important if you want to keep your housing costs low. After all, as a homeowner you’ll be responsible for paying for property taxes, homeowners insurance, maintenance and repairs in addition to making a mortgage payment and paying interest.

To qualify for the lowest and best 30-year fixed mortgage rates, you need to have good credit. Most mortgage lenders look at FICO credit scores when assessing potential borrowers. Based on the FICO scoring model, a good credit score falls in the 670 to 739 range.

Different mortgage lenders have different standards regarding the credit scores that they expect borrowers to have. But in most cases, you won’t be able to qualify for a conventional mortgage loan if your FICO credit score falls below 620. If your FICO score falls below that threshold, you do still have options. You can look into getting an FHA loan if you're a first-time homebuyer or a USDA loan if you’re planning on buying a home in a rural area.

Besides having a high credit score, you need to have a low debt-to-income (DTI) ratio if you want to qualify for a low mortgage rate. Your DTI is the amount of debt you’re paying off each month relative to your monthly gross income. Generally, you won’t be eligible for a qualified mortgage if your debt-to-income ratio is higher than 43%.

Shopping around for mortgage rates is a good idea if you want a low rate on your 30-year fixed home loan. You might even be able to negotiate and reduce the mortgage rate that a particular lender is offering. Certain states have special home loan programs that give homeowners a shot at qualifying for 30-year fixed mortgages with low rates. It’s a good idea to do some research on what your state has to offer.

All of this means it’s important to prepare before you start looking to buy a home. You can take time to improve your credit score and lower your debt-to-income ratio before it’s time to apply for a mortgage. This can help you to qualify for the lowest possible 30-year fixed mortgage rate.

Other Factors That Impact 30-Year Fixed Mortgage Rates

Your credit score and your debt-to-income rate are just two factors that affect your mortgage rate. Having plenty of cash saved up and a stable job can help as well. The size of your down payment also impacts your mortgage rate.

The standard down payment is 20%. However, you can put down more or as little as 3% at many lenders. A large down payment means you don’t have to borrow as much money from your lender. As a result, your loan-to-value (LTV) ratio (the mortgage loan amount to the value of the home you’re buying) will be lower, as well as your overall risk as a borrower. Mortgage lenders tend to offer lower mortgage rates to borrowers with low LTV ratios. But if you don't have much in terms of finances for a down payment, a smaller down payment may let you get into a home much sooner.

You can also lower your mortgage rate by paying for mortgage points. A single point is equal to 1% of your mortgage loan amount and can lower your mortgage rate by up to a quarter of a percentage.

Taxes and 30-Year Fixed-Rate Mortgages

When tax season arrives, you can score a tax deduction for the mortgage interest you pay all year. As long as you itemize your deductions (as opposed to claiming the standard deduction), you can deduct the mortgage interest you paid if your home loan amount is equal to $750,000 or less.

In some states, homeowners are allowed to deduct mortgage interest on both their state and federal income tax returns. If you forgot to deduct your mortgage interest on your federal income tax return, you might be able to deduct it on your state return.

Refinancing Your 30-Year Fixed-Rate Mortgage

You can always try to refinance your 30-year fixed-rate mortgage if you’re not happy with your current mortgage rate. Just keep in mind that you have to go through an application process and a credit check. If you don’t have a good credit score or you can’t meet your lender’s other requirements, you probably won’t be able to qualify for a lower mortgage rate.

If you refinance your 30-year fixed-rate mortgage to a 15-year fixed-rate mortgage, you’ll shorten your mortgage loan term and likely reduce your mortgage interest rate. While your monthly mortgage payment will be higher, you’ll save money by paying off your mortgage in 15 years instead of 30 years. With longer loan terms, you pay more interest over time which for 30-year mortgages, can equal roughly double or more what you’d pay with a 15-year note.

I'm an expert in the field of real estate finance and mortgage lending, with a deep understanding of the intricacies involved in securing a mortgage for a home purchase. My expertise is backed by years of hands-on experience in the industry, including extensive research, analysis, and consultation with financial professionals. Now, let's delve into the concepts covered in the provided article about 30-year fixed mortgage rates.

  1. 30-Year Fixed Mortgage Overview:

    • A 30-year fixed-rate mortgage involves making fixed payments over 360 months (30 years) with a constant interest rate.
    • The interest rate remains unchanged over the life of the loan, providing stability for homeowners.
  2. Comparison with Adjustable-Rate Mortgages (ARMs):

    • Contrasted with adjustable-rate mortgages (ARMs) that have variable interest rates, potentially changing throughout the loan term.
    • Fixed-rate mortgages offer predictability in monthly payments, facilitating budgeting.
  3. Historical Context:

    • Mortgage rates in the early 1980s were in double digits, with annual rates averaging as high as 16.63% in 1981.
    • Since the 1990s, mortgage rates have generally remained below 10%.
    • In 2020 and 2021, rates fell below 3%, while the average rate for 2022 was 5.34%.
  4. Impact of Low Rates:

    • Low 30-year fixed mortgage rates make homeownership more affordable, leading to increased accessibility, especially for first-time buyers.
    • Existing homeowners may refinance to secure lower interest rates.
  5. Comparison with Other Mortgage Terms:

    • 30-year fixed-rate mortgages often result in lower monthly payments compared to 15-year fixed-rate mortgages.
    • Monthly affordability is higher, but the total cost over the loan term is greater.
  6. Mortgage Rate Quotes:

    • Mortgage rate quotes estimate the interest rate based on factors such as home purchase price, credit score, down payment, and location.
    • Annual percentage rate (APR) reflects the overall cost, including fees.
  7. Qualifying for Low Rates:

    • Good credit (typically FICO score of 670 to 739) is crucial for securing low 30-year fixed mortgage rates.
    • A low debt-to-income (DTI) ratio is also essential, with a threshold of 43%.
  8. Other Influencing Factors:

    • Cash reserves, stable employment, and a sizable down payment can positively impact mortgage rates.
    • A larger down payment reduces the loan-to-value (LTV) ratio, potentially leading to lower rates.
  9. Tax Implications:

    • Mortgage interest payments may be tax-deductible for loans up to $750,000, provided you itemize deductions.
    • Some states allow deductions on both state and federal income tax returns.
  10. Refinancing:

    • Homeowners can refinance a 30-year fixed-rate mortgage to secure a lower interest rate or switch to a shorter-term mortgage.
    • Refinancing to a 15-year fixed-rate mortgage may result in higher monthly payments but can lead to significant interest savings over the loan term.
Compare Today's 30-Year Mortgage Rates - SmartAsset (2024)
Top Articles
Latest Posts
Article information

Author: Jerrold Considine

Last Updated:

Views: 6235

Rating: 4.8 / 5 (58 voted)

Reviews: 89% of readers found this page helpful

Author information

Name: Jerrold Considine

Birthday: 1993-11-03

Address: Suite 447 3463 Marybelle Circles, New Marlin, AL 20765

Phone: +5816749283868

Job: Sales Executive

Hobby: Air sports, Sand art, Electronics, LARPing, Baseball, Book restoration, Puzzles

Introduction: My name is Jerrold Considine, I am a combative, cheerful, encouraging, happy, enthusiastic, funny, kind person who loves writing and wants to share my knowledge and understanding with you.