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Current Mortgage Rates in the U.S.
This page offers a snapshot of current mortgage rates in the United States. It is based on data provided by Freddie Mac, which indicates the average rates being given out by primary mortgage lenders across the country. You can learn what it takes to qualify for these rates from our explanation below.
Current Rates as of August 5, 2010
- 30-year fixed rate mortgage: 4.49%
- 15-year fixed rate mortgage: 3.95%
- 5/1 ARM loan: 3.63%
- 1-year ARM loan: 3.55%
An explanation of these mortgage types:
- A 30-year fixed mortgage has the same interest rate over the entire life or “term” of the loan. In this case, the term is for 30 years. This is the most common type of mortgage used by home buyers in the U.S.
- A 15-year fixed mortgage is the same as above, only for a shorter term.
- A 5/1 ARM is an adjustable-rate mortgage that has a fixed rate for the first five years. After that, the interest rate will adjust or “reset” every year.
- A 1-year ARM is an adjustable mortgage that has a fixed rate for the first year, and then adjusts every year after that.
What You Should Know About Mortgage Rates
The numbers listed above show the current mortgage rate averages that are being assigned to loans. But that doesn’t mean you will qualify for these rates. On the contrary, you might qualify for a lower or higher rate than the ones shown above. It depends partly on the lender, but mostly on your qualification factors. These factors include your credit score, income, debt level, and the size of your down payment (among other things).
This is something a lot of first-time home buyers don’t realize. They see the current mortgage rates advertised on a lender’s website or on television, and they automatically assume they will qualify for those rates. But if you pay closer attention to these “teaser rates,” you will notice that they are always followed by a disclaimer. The disclaimer will say something along the lines of: “For well qualified borrowers only.”
This means the lenders reserve their best rates for certain borrowers — people who meet their definition of “well qualified.” And the criteria needed to meet this definition will vary from one lender to the next.
Keep this in mind when you read about current mortgage rates being offered across the country. You might qualify for those rates, or a higher one, or a lower one. It all depends. We have collected some helpful articles below, to help you research this subject further.
How to Qualify for the Best Rates
We discussed the fact that a lender’s best mortgage rates are reserved for “well qualified” borrowers. So what does it take to qualify for these rates? What can you, as a borrower, do to improve your chances? There is no standard answer to this question, because every lender is different. But based on current trends and practices, you will probably need the following:
- A credit score of 760 or higher
- A down payment of at least 20%
- A favorable debt-to-income ratio
- Income above a certain level, relative to the loan amount
- You might have to pay for points as well *
* Keep in mind that this is just to qualify for the best rates available. If you fall short of the criteria listed above, you could still get approved for a mortgage loan. You’ll just have to pay a higher interest rate on the loan.
Related Articles
Here are some articles that will help you understand the relationship between mortgage loans, interest rates and monthly payments — and how it all affects you, as a home buyer.
Here’s what you, as a home buyer, should take away from all of this. Current mortgage rates are easy to find online. There are dozens of financial websites that display the current rates, in addition to this website. But these numbers are just averages, taken from a nationwide sampling of lenders. You might qualify for a lower or higher rate, depending on how well you “stack up” against the lender’s guidelines. You can improve your chances of getting the best rate by using the articles above.
