Today’s 30-Year Mortgage Rates

A 30-year fixed mortgage is a home loan with a repayment term of 30 years and an interest rate which stays the same for the life of the loan.

When you take out a mortgage, your monthly payment will generally have four main parts:

With a 30-year fixed mortgage, your monthly principal and interest payment remains the same for the entire loan term. However, the tax and insurance payments, which may be stored in an escrow account, can fluctuate based on your homeowner’s insurance premiums and property tax rates.

With rates around 7% for a 30-year fixed-rate mortgage, there’s no denying that financing a home is more expensive in 2023 than it was over the previous few years – average rates on 30-year fixed mortgages didn’t even crack 4% between June 2019 and March 2022.

However, those low rates had some unwelcome side effects for many homebuyers. The low-rate frenzy of 2020 and 2021 favored cash buyers and left those buying with mortgages out in the cold, says Scott Bridges, senior managing director of consumer direct lending at Pennymac.

“We worked with thousands of buyers who had to bid on more than 10, 20 or 30 homes before they got into a contract,” Bridges says. Buyers at that time often paid thousands over the home’s list price and waived important buyer protections like appraisal and inspection contingencies just to score the winning bid. But Bridges says that today’s higher rates put buyers back in a more competitive position when shopping for a home.

“A buyer today can be picky and not just accept any house,” he says. “They can negotiate on price, offer less than the listed price, and wait for their inspection, appraisal and financing contingencies to clear before signing on the dotted line.”

Another unexpected upside to the current mortgage rate environment? Buyers in some markets may also be able to capture promotional rate incentives from new home builders, says Todd Johnson, senior vice president of Wells Fargo Home Lending.

“As a preferred lender for many builders, Wells Fargo sees that builders are offering permanent interest rate buydowns as well as paying for extended interest rate locks,” Johnson says. Those rate locks can let buyers lock in today’s best 30-year fixed mortgage rates and insulate themselves against future rate hikes.

A good 30-year fixed mortgage rate depends on your definition of “good.” The best rate for you will be one that makes your monthly mortgage payment affordable. You can use the 28/36 rule to help determine affordability: Spend no more than 28% of your gross income on housing, and no more than 36% of your gross income on all your debt.

Take a look at your credit score, then consider available interest rates and other loan-related expenses as you work to secure an affordable loan.

Mortgage rates depend, in part, on applicants’ credit scores. Typically, those with top-notch credit will be rewarded with the best rates, while those with less-than-stellar credit will pay higher rates. In general, a borrower will need a score of at least 620 to qualify for a conventional mortgage.

To qualify for the most competitive mortgage rates, Scott Lindner, national sales director for mortgage lending at TD Bank, encourages buyers to check in on their credit before they start shopping – ideally months in advance.

“Building in additional time for this can also account for any reporting errors that may have been made on a credit report and allow borrowers to fix it before seeking a loan,” he says.

A head start can also help you find other ways to improve your credit score, such as lowering your credit utilization. This can generate substantial long-term savings.

If your definition of a “good” rate is the lowest possible one, you don’t necessarily have to settle for the rates lenders initially offer. Instead, lenders may let you or the home seller bring down your interest rate by paying an additional fee at closing. This is called buying mortgage points, also known as discount points.

A point costs 1% of your mortgage, and every point you buy typically reduces your interest rate by 0.25 percentage point. For example, if you’re taking out a $300,000 mortgage and the interest rate is 6.75%, your monthly payment would be $1,946. But if you paid $6,000 to buy two points up front, your interest rate would be 6.25% with a monthly payment of $1,847. In just over five years, you’d recoup the cost of the points you bought. And for $6,000, you’d save more than $35,000 in interest over the full 30-year fixed mortgage term.

Points make the most sense if you plan on staying in your home for a significant time. “If you’re buying your forever home, you might want to consider paying points because you will pay far less interest over time,” Lindner says

If you’re looking for a mortgage with the lowest total cost, you’ll want to look beyond the interest rate to the annual percentage rate, which is the total annual cost of borrowing. The charges that contribute to the APR can include closing costs such as origination fees and private mortgage insurance. Discount points will also be included in your APR.

Say two lenders offer the same interest rate on a 30-year fixed mortgage, but one has no origination fee and the other has a $3,000 origination fee. In this instance, the better APR comes from the lender without the origination fee, which keeps more money in your pocket at the closing table.

When shopping for a home, you might compare a 15- vs. 30-year fixed mortgage. How do you decide which one is right for you? The answer comes down to which repayment term makes you the most comfortable and fits best within your financial plan. These criteria can help you decide.

A 15-year fixed mortgage might be better if: 

A 30-year fixed mortgage might be better if:

If you’re still on the fence about which loan suits you best, Lindner says there’s always the “cake and eat it too” option: Get a 30-year mortgage but make additional payments whenever your finances allow. If you plan to do this, you’ll want to make sure to avoid a loan with a prepayment penalty.

Johnson says the 30-year fixed-rate mortgage is “still turning heads after more than 70 years” for several reasons. Beyond the regular monthly payment, the longer term allows buyers to qualify for higher purchase prices while keeping payments low, he says. And those lower payments help buyers free up cash for other expenses and investments each month.

But if you’re concerned about locking in a long-term interest rate amid a rising rate environment, Bridges says to consider how long you plan on keeping your home. Many buyers don’t hold a 30-year mortgage for the entire term.

“The 30-year fixed is a beacon of safety and has tremendous value,” Bridges says. “But like most homeowners, you might have the loan for only five to 10 years before you refinance to a lower rate or transition to another home.”

Therefore, by taking out a 30-year fixed-rate mortgage at current rates, you can get into the home you want today and keep options open for relocating or refinancing if there are lower rates available in the future.