Mortgage Rates Today: February 27, 2024—Rates Remain Fairly Steady

The current average mortgage rate on a 30-year fixed mortgage is 7.53%, according to Curinos. The average rate on a 15-year mortgage is 6.78%, while the average rate on a 30-year jumbo mortgage is 7.42%.

Current Mortgage Rates for February 27, 2024

30-Year Mortgage Rates

Borrowers paid an average rate of 7.53% on a 30-year mortgage.

Currently, the average annual percentage rate (APR) on a 30-year fixed-rate mortgage is 7.44%. This is lower than last week when the APR was 7.49%. The APR contains both mortgage interest and the lender fees to help give a more complete picture of loan costs.

To get an idea of how much you’ll pay: a $100,000 mortgage with a 30-year fixed-rate loan at the current average interest rate of 7.53% will cost you about $701 including principal and interest (taxes and fees not included) each month, the Forbes Advisor mortgage calculator shows. That’s around $152,408 in total interest over the life of the loan.

15-Year Mortgage Rates

Today, the 15-year mortgage rate sits at 6.78%, higher than it was yesterday. Last week, it was 6.76%.

The APR on a 15-year fixed is 6.73%. It was 6.68% this time last week.

With an interest rate of 6.78%, you would pay $887 per month in principal and interest for every $100,000 borrowed. Over the life of the loan, you would pay $59,593 in total interest.

Jumbo Mortgage Rates

On a 30-year jumbo, the average interest rate sits at 7.42%, lower than it was at this time last week. The average rate was 7.43% at this time last week.

Borrowers with a 30-year fixed-rate jumbo mortgage with today’s interest rate of 7.42% will pay $694 per month in principal and interest per $100,000. That means that on a $750,000 loan, the monthly principal and interest payment would be around $5,203 and you’d pay roughly $1.12 million in total interest over the life of the loan.

How Much House Can I Afford?

The first step on your homebuying journey should be to calculate affordability. You’ll want to find out how much you can afford based on things like income, debt and savings.

Here are a few important factors that go into home affordability:

  • Income
  • Debt
  • Debt-to-income ratio (DTI)
  • Down payment
  • Credit score

What’s an APR, and Why Is It Important?

The annual percentage rate, or APR, encompasses the mortgage interest rate and lender fees over the total life of the loan. It’s important because it can give homebuyers a more complete picture of total costs, not just the interest rate.

Comparing APR among lenders is a better way to see overall costs because it will show you everything from interest rate to fees.

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?

As you compare lenders, consider getting rate quotes for several loan programs. In addition to comparing rates and fees, these programs can have flexible down payment and credit requirements that make qualifying easier.

Conventional mortgages are likely to offer competitive rates when you have a credit score between 670 and 850, although it’s possible to qualify with a minimum score of 620. This home loan type also doesn’t require annual fees when you have at least 20% equity and waive PMI.

Several government-backed programs are better when you want to make little or no down payment:

  • FHA loans. Borrowers with a credit score above 580 only need to put 3.5% down and applicants with credit scores ranging from 500 to 579 are only required to make a 10% down payment with FHA loans.
  • VA loans. Servicemembers, veterans and qualifying spouses don’t need to make a down payment when the sales price is less than the home’s appraisal value. VA loan credit requirements vary by lender.
  • USDA loans. Applicants in eligible rural areas can buy or build a home with no money down using a USDA loan. Moderate-income borrowers can qualify for a 30-year fixed-rate term through the Guaranteed Loan Program. Further, buyers with a very low or low income can receive a 33-year term and payment assistance is available through the agency’s Direct Loans program. Credit requirements differ by lender.

Frequently Asked Questions (FAQs)

What is a good mortgage rate?

A competitive mortgage rate currently ranges from 6% to 8% for a 30-year fixed loan. Several factors impact mortgage rates, including the repayment term, loan type and borrower’s credit score.

How to get a lower mortgage interest rate?

Comparing lenders and loan programs is an excellent start. Borrowers should also strive for a good or excellent credit score between 670 and 850 and a debt-to-income ratio of 43% or less.

Further, making a minimum down payment of 20% on conventional mortgages can help you automatically waive private mortgage insurance premiums, which increases your borrowing costs. Buying discount points or lender credits can also reduce your interest rate.

How long can you lock in a mortgage rate?

Most rate locks last 30 to 60 days and your lender may not charge a fee for this initial period. However, extending the rate lock period up to 90 or 120 days is possible, depending on your lender, but additional costs may apply.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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