With mortgage rates headed down this year, be ready to take advantage. Compare loan offers from different lenders to get the best deal.
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Written byKatherine Watt
Katherine Watt is a CNET Money writer focusing on mortgages, home equity and banking. She previously wrote about personal finance for NextAdvisor. Based in New York, Katherine graduated summa cum laude from Colgate University with a bachelor's degree in English literature.
Marc Wojno
Marc is senior editor at CNET Money, overseeing such topics as banking and home equity. He’s been a writer and editor in the financial field for more than two decades, including for such media organizations as The Kiplinger Washington Editors, U.S. News & World Report, Bankrate and Dow Jones. Before joining CNET Money, Wojno was Senior Editor of Finance for ZDNet, writing on blockchain, cryptocurrency, finserv, investing and taxes. Outside the digital world, Marc can be found spinning vinyl, threading reel-to-reel tapes, shooting film with his Bolex and hosting an occasional pub quiz.
Laura Michelle Davis
Laura Michelle Davis
Laura is a professional nitpicker and good-humored troubleshooter with over 10 years of experience in print and digital publishing. Before becoming an editor with CNET, she worked as an English teacher, Spanish medical interpreter, copy editor and proofreader. She is a fearless but flexible defender of both grammar and weightlifting, and firmly believes that technology should serve the people. Her first computer was a Macintosh Plus.
Reviewed byMelissa Cohn
Melissa Cohn has been in the mortgage industry for over 35 years. She began her career with CitiMortgage before launching her own mortgage company, The Manhattan Mortgage Company, in 1985. As one of the very first independent mortgage brokers, Cohn exponentially grew her business into the #1 residential mortgage broker on the East Coast with more than $5 billion in annual volume. In 2020, she joined William Raveis Mortgage, where she is currently a top originator in the company. Her insights are regularly featured in the press -- including The Wall Street Journal, Forbes and Bloomberg.
Article updated on Aug 16, 2024 Our Experts Written by Katherine WattKatherine Watt is a CNET Money writer focusing on mortgages, home equity and banking. She previously wrote about personal finance for NextAdvisor. Based in New York, Katherine graduated summa cum laude from Colgate University with a bachelor's degree in English literature.
Edited by Marc WojnoMarc is senior editor at CNET Money, overseeing such topics as banking and home equity. He’s been a writer and editor in the financial field for more than two decades, including for such media organizations as The Kiplinger Washington Editors, U.S. News & World Report, Bankrate and Dow Jones. Before joining CNET Money, Wojno was Senior Editor of Finance for ZDNet, writing on blockchain, cryptocurrency, finserv, investing and taxes. Outside the digital world, Marc can be found spinning vinyl, threading reel-to-reel tapes, shooting film with his Bolex and hosting an occasional pub quiz.
See full bio , Laura Michelle Davis
Laura Michelle Davis
Laura is a professional nitpicker and good-humored troubleshooter with over 10 years of experience in print and digital publishing. Before becoming an editor with CNET, she worked as an English teacher, Spanish medical interpreter, copy editor and proofreader. She is a fearless but flexible defender of both grammar and weightlifting, and firmly believes that technology should serve the people. Her first computer was a Macintosh Plus.
Reviewed by Melissa CohnMelissa Cohn has been in the mortgage industry for over 35 years. She began her career with CitiMortgage before launching her own mortgage company, The Manhattan Mortgage Company, in 1985. As one of the very first independent mortgage brokers, Cohn exponentially grew her business into the #1 residential mortgage broker on the East Coast with more than $5 billion in annual volume. In 2020, she joined William Raveis Mortgage, where she is currently a top originator in the company. Her insights are regularly featured in the press -- including The Wall Street Journal, Forbes and Bloomberg.
CNET staff -- not advertisers, partners or business interests -- determine how we review the products and services we cover. If you buy through our links, we may get paid.
Advertiser DisclosureCNET editors independently choose every product and service we cover. Though we can’t review every available financial company or offer, we strive to make comprehensive, rigorous comparisons in order to highlight the best of them. For many of these products and services, we earn a commission. The compensation we receive may impact how products and links appear on our site.
Our Experts Written by Katherine WattKatherine Watt is a CNET Money writer focusing on mortgages, home equity and banking. She previously wrote about personal finance for NextAdvisor. Based in New York, Katherine graduated summa cum laude from Colgate University with a bachelor's degree in English literature.
Edited by Marc WojnoMarc is senior editor at CNET Money, overseeing such topics as banking and home equity. He’s been a writer and editor in the financial field for more than two decades, including for such media organizations as The Kiplinger Washington Editors, U.S. News & World Report, Bankrate and Dow Jones. Before joining CNET Money, Wojno was Senior Editor of Finance for ZDNet, writing on blockchain, cryptocurrency, finserv, investing and taxes. Outside the digital world, Marc can be found spinning vinyl, threading reel-to-reel tapes, shooting film with his Bolex and hosting an occasional pub quiz.
See full bio , Laura Michelle Davis
Laura Michelle Davis
Laura is a professional nitpicker and good-humored troubleshooter with over 10 years of experience in print and digital publishing. Before becoming an editor with CNET, she worked as an English teacher, Spanish medical interpreter, copy editor and proofreader. She is a fearless but flexible defender of both grammar and weightlifting, and firmly believes that technology should serve the people. Her first computer was a Macintosh Plus.
Reviewed by Melissa CohnMelissa Cohn has been in the mortgage industry for over 35 years. She began her career with CitiMortgage before launching her own mortgage company, The Manhattan Mortgage Company, in 1985. As one of the very first independent mortgage brokers, Cohn exponentially grew her business into the #1 residential mortgage broker on the East Coast with more than $5 billion in annual volume. In 2020, she joined William Raveis Mortgage, where she is currently a top originator in the company. Her insights are regularly featured in the press -- including The Wall Street Journal, Forbes and Bloomberg.
CNET staff -- not advertisers, partners or business interests -- determine how we review the products and services we cover. If you buy through our links, we may get paid.
Why You Can Trust CNET MoneyOur mission is to help you make informed financial decisions, and we hold ourselves to strict editorial guidelines . This post may contain links to products from our partners, which may earn us a commission. Here’s a more detailed explanation of how we make money .
Table of ContentsWhen mortgage rates fall, more prospective buyers can afford to buy a home.
Home loan rates constantly fluctuate in response to economic data, market expectations, geopolitical events and changes to monetary policy. Mortgage rates also vary significantly from lender to lender, and the one you qualify for will depend on things like your credit score, income and loan type.
Whether you need a mortgage now or are planning to buy in the future, comparing multiple loan offers from different lenders is one of the best ways to get a lower interest rate.
| Product | Interest rate | APR |
|---|---|---|
| 10/1 ARM | 6.56% | 7.26% |
| 7/1 ARM | 6.24% | 7.32% |
| 5/1 ARM | 5.94% | 7.15% |
| 7/1 ARM jumbo | 6.01% | 6.97% |
| 30-year fixed-rate VA | 6.60% | 6.64% |
| 30-year fixed-rate | 6.37% | 6.41% |
| 30-year fixed-rate jumbo | 6.51% | 6.56% |
| 15-year fixed-rate jumbo | 5.98% | 6.05% |
| 30-year fixed-rate FHA | 6.49% | 6.53% |
| 5/1 ARM jumbo | 5.82% | 6.93% |
| 15-year fixed-rate | 5.71% | 5.79% |
| 20-year fixed-rate | 6.14% | 6.19% |
| 15-year fixed-rate jumbo refinance | 6.05% | 6.13% |
| 30-year fixed-rate jumbo refinance | 6.41% | 6.46% |
| 7/1 ARM jumbo refinance | 5.93% | 6.93% |
| 10/1 ARM refinance | 6.57% | 7.29% |
| 5/1 ARM jumbo refinance | 5.82% | 6.93% |
| 15-year fixed-rate refinance | 5.75% | 5.82% |
| 30-year fixed-rate VA refinance | 7.26% | 7.29% |
| 30-year fixed-rate refinance | 6.37% | 6.41% |
| 5/1 ARM refinance | 5.89% | 6.98% |
| 30-year fixed-rate FHA refinance | 6.59% | 6.63% |
| 7/1 ARM refinance | 6.18% | 7.03% |
| 20-year fixed-rate refinance | 6.17% | 6.23% |
We use information collected by Bankrate, which is owned by the same parent company as CNET, to track daily mortgage rate trends. The above table summarizes the average rates offered by lenders across the country.
New economic data, geopolitical risks and monetary policy adjustments by the Federal Reserve all affect the percentage of interest charged on a home loan.
Throughout the first half of 2024, average mortgage rates were around 7%.
In early August, a weaker labor report triggered recession fears among investors. In just a few days, the average rate on a 30-year fixed mortgage fell to 6.5%, its lowest level since May 2023. Typically, bad economic news results in lower mortgage rates.
Inflation also impacts mortgage rates. Recent figures show annual price growth falling below 3% for the first time since spring 2021. According to Melissa Cohn, regional vice president at William Raveis Mortgage and member of CNET Money’s expert review board, cooler inflation and a slowing economy will translate to lower interest rates on home loans.
It’s difficult to predict exactly where mortgage rates will go. The reaction to July’s labor reading is a perfect example. Most economists didn’t forecast mortgage rates reaching 6.5% until the end of 2024. But that happened in the span of just a few days.
Barring a severe economic downturn, which economists don’t currently predict, it’s unlikely mortgage rates will continue to fall at such a fast pace. However, an incoming Fed rate cut still bodes well for homebuyers.
As the Fed begins lowering rates, it should lead to a gradual decline in mortgage rates over the coming months. Recent labor may also give the Fed a reason to lower rates more aggressively than previously expected this year: two or three cuts as opposed to just one.
“If inflation continues to moderate and unemployment goes up, the Fed has an opportunity to cut one time before the election and potentially again in December,” said Jeb Smith, a real estate agent and a member of CNET Money’s ERB.
It’s possible that average mortgage rates will move closer to 6% by the end of the year, though it will continue to depend on economic data and the Fed’s actions.
You can’t control the broader macroeconomic factors driving mortgage rates, but there are some ways to get a lower personal rate. Even a difference of a few tenths of a percentage point can shave off thousands of dollars from what you’ll pay over the course of your home loan.
Your mortgage rate is the percentage of interest a lender charges for providing the loan you need to buy a home. Multiple factors determine the rate you’re offered. Some are specific to you and your financial situation, and others are influenced by macro market conditions, such as inflation, the Fed’s monetary policy and the overall demand for loans.
While the broader economy plays a key role in mortgage rates, some key factors under your control affect your rate:
The annual percentage rate, or APR, is usually higher than your loan’s interest rate and represents the true cost of your loan. It includes the interest rate and other costs such as lender fees or prepaid points. So, while you might be tempted with an offer for “interest rates as low as 6.5%,” look at the APR instead to see how much you’re really paying.
Most mortgage loans are based on an amortization schedule: You’ll pay the same amount each month for the life of the loan, but the generated interest will be highest at the beginning and will taper as the principal (the amount you borrowed) decreases. Your amortization schedule will show how much of your monthly payment goes to interest and how much pays down the principal. Most borrowers find a fixed, predictable monthly payment more convenient.
Mortgage lenders often publish their rates for different mortgage types, which can help you research and narrow down where you’ll apply for preapproval. But an advertised rate isn’t always the rate you’ll get. When shopping for a new mortgage, it’s important to compare not just mortgage rates but also closing costs and any other fees associated with the loan. Experts recommend shopping around and reaching out to multiple lenders for quotes and not rushing the process.
When you refinance your mortgage, you swap out your current home loan for a new one, ideally with better terms.
Determine whether you want to do a cash-out refinance or a rate-and-term refinance. With a cash-out refinance, you take out a new mortgage that’s bigger than your existing one and pocket the difference as cash. With a basic rate-and-term refinance, you take out a loan the same size as your existing mortgage, just with a new interest rate and/or loan term.
The refinancing process will feel the same as securing your existing mortgage. You’ll need to choose a lender, apply for the loan, wait for the underwriting process to conclude, have your home appraised and close on your new loan. Just like with your original mortgage, you’ll need to pay another set of closing costs when you refinance.
Most conventional loans require a credit score of 620 or higher, but Federal Housing Administration and other loan types may accommodate borrowers with scores as low as 500, depending on the lender.
How are mortgage rates determined?Your credit score isn’t the only factor that impacts your mortgage rate. Lenders will also look at your debt-to-income ratio to assess your level of risk based on the other debts you’re paying back such as student loans, car payments and credit cards. Additionally, your loan-to-value ratio plays a key role in your mortgage rate.
What is a rate lock?A rate lock means your interest rate won’t change between the offer and the time you close on the house. For example, if you lock in a rate at 6.5% today and your lender’s rates climb to 7.25% over the next 30 days, you’ll get the lower rate. A common rate-lock period is 45 days, so you’re still on a tight timeline. Be sure to ask lenders about rate lock windows and the cost to secure your rate.
Will rates go up or down?Mortgage rates are always changing, and it’s impossible to predict the market. However, most experts think mortgage rates will gradually decline over the course of 2024. Fannie Mae predicts the average rate for a 30-year fixed mortgage will end the year at 6.7%.
Written by Katherine WattKatherine Watt is a CNET Money writer focusing on mortgages, home equity and banking. She previously wrote about personal finance for NextAdvisor. Based in New York, Katherine graduated summa cum laude from Colgate University with a bachelor's degree in English literature.
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