The average mortgage interest rates had slight fluctuations this week across three main loan types — 30-year fixed rose slightly (3.68% to 3.73%), as did 15-year fixed (3.14% to 3.19%), while 5/1 ARM dropped (3.39% to 3.36%).
Weekly Rate Recap
Mortgage Rates Today
The Federal Reserve indicated no plans to raise interest rates for the time being, according to USA Today. This could be a great opportunity for first-time homebuyers, whose purchasing power is stronger while rates stay low. Credit bureau TransUnion anticipates between 8.3 million and 9.2 million first-time homebuyers will purchase between 2020 and 2022.
The interest rates reported below are from a weekly survey of 100+ lenders by Freddie Mac PMMS. These average rates are intended to give you a snapshot of overall market trends and may not reflect specific rates available for you.
Shop and compare your personalized rates from multiple lenders.
| Weekly Rate Trends | 30-Year Fixed | 15-Year Fixed | 5/1 ARM |
| 12/12/19 | 3.73%↑ | 3.19%↑ | 3.36%↓ |
| 12/5/19 | 3.68% | 3.14% | 3.39% |
| 11/28/19 | 3.68% | 3.15% | 3.43% |
| 11/21/19 | 3.66% | 3.15% | 3.39% |
| 11/14/19 | 3.75% | 3.2% | 3.44% |
| 11/7/19 | 3.69% | 3.13% | 3.39% |
| 10/31/19 | 3.79% | 3.19% | 3.43% |
| 10/24/19 | 3.75% | 3.18% | 3.4% |
Copyright 2018 Freddie Mac. Averages are based on conforming mortgages with 20% down.
How do I get the best mortgage rate?
To get the best mortgage interest rate for your unique situation, it’s best to shop around with multiple lenders. According to research from the Consumer Financial Protection Bureau (CFPB), almost half of consumers do not compare quotes when shopping for a home loan, which means losing out on substantial savings. Interest rates help determine your monthly mortgage payment as well as the total amount of interest you’ll pay over the life of the loan. While it may not seem like much, even a half of a percentage point decrease can amount to a significant amount of money.
Comparing quotes from three to four lenders ensures that you’re getting the most competitive mortgage rate for you. And, if lenders know you’re shopping around, they may even be more willing to waive certain fees or offer better terms for some buyers. Either way, you reap the benefits.
What determines my mortgage interest rate?
There are seven things that lenders consider when determining mortgage interest rates. Any change to one of these things can directly impact the specific interest rate you’ll qualify for.
Credit Score
Your credit score has one of the biggest impacts on your mortgage rate as it’s a measure of how likely you’ll repay the loan on time. The higher your score, the lower your rates. If you haven’t pulled your credit score and addressed any issues, then start there before reaching out to lenders.
Down Payment
In general, the higher your down payment the lower your interest rate, because you’re viewed as a less risky borrower than someone who finances the entire purchase. If you’re unable to put at least 20 percent down, then most lenders require Private Mortgage Insurance (PMI), which will be added to the cost of your overall monthly mortgage payment.
Loan Type
There are different types of mortgage loans on the market with different eligibility requirements. Not all lenders offer all loan types, and rates can vary significantly depending on the loan type you choose. Some common mortgage loan products are conventional, FHA, USDA, and VA loans.
Loan Terms
Your loan term indicates how long you have to repay the loan. Shorter term loans tend to have lower interest rates, but higher monthly payments. Exactly how much lower your interest rate and how much higher the monthly payment will depend a lot on the specific loan term and interest rate type you choose.
Interest Rate Type
There are two basic types of interest rates: fixed and adjustable. Fixed interest rates stay the same for the entire loan term. Adjustable rates have an initial fixed period (five or seven years is common), but will fluctuate after that period based on the current market rates for the remainder of the loan.
Loan Amount
Your loan amount is not just the price of the home, but the total amount you’ll need to borrow. This amount is calculated by the home price plus closing costs minus your down payment. If you roll the closing costs and other borrowing fees into your loan, you may pay a higher interest rate than someone who pays those fees upfront. Loans that are smaller or larger than the limits for conforming loans may pay higher interest rates too.
Location
Interest rates vary slightly depending on the state you live as well as whether you’re looking to purchase in a rural versus urban area. Some loan products like USDA loans offer generally lower rates than conventional mortgage options for eligible borrowers.
Why does my mortgage interest rate matter?
Your mortgage interest rate impacts the amount you’ll pay monthly as well as the total interest costs you’ll pay over the life of your loan. While it may not seem like a lot, a lower interest rate even by half of a percent can add up to significant savings for you.
For example, a borrower with a good credit score and a 20 percent down payment who takes out a 30-year fixed-rate loan for $200,000 with an interest rate of 4.25% instead of 4.75% translates to almost $60 per month in savings — in the first five years, that’s a savings of $3,500. Just as important is looking at the total interest costs too. In the same scenario, a half percent decrease in interest rate means a savings of almost $21,400 in total interest owed over the life of the loan.
The Cost Savings of Different Interest Rates for a $200K 30-Year Fixed Loan
| Interest Rate* | Monthly Mortgage Payment** | Total Interest Costs |
| 4.25% | $984 | $154,200 |
| 4.75% | $1,043 | $175,592 |
*Interest rates assume a good credit rating and 20% down payment.
**Amount doesn’t include property taxes, homeowners insurance, or HOA dues (if applicable).
Current Mortgage Interest Rates
Freddie Mac’s weekly report covers mortgage rates from the previous week, but interest rates change daily — mortgage rates today may be different than reported. To find out what rates are currently available, compare quotes from multiple lenders.
