Rates

Mortgage rates are the current interest rates lenders offer on home loans. They change based on the economy, Federal Reserve policies, and market trends.

Your mortgage rate affects your home’s affordability and the total interest you’ll pay over the loan’s life. That’s why it’s crucial for buyers and those refinancing to keep an eye on current rates.

The lower the interest rate, the lower your monthly payment. For example, a $350,000, 30-year fixed mortgage at 6% interest has a monthly payment of $2,098, while at 5.5% interest, the payment drops to $1,987.

Your financial profile, loan features, and the broader economic environment can all influence the rates lenders offer you.

Credit Score: Your credit score and history significantly impact the interest rate you qualify for. Higher credit scores generally result in lower rates, while lower scores lead to higher rates.

Down Payment: Making a down payment of 20% or more can lower your interest rate because lenders see higher equity as lower risk.

Loan Term: The length of your mortgage term affects your rate. Shorter terms, like 15 years, usually have lower rates and less total interest but higher monthly payments compared to longer terms, like 30 years.

Loan Type: The type of loan you choose, such as a conforming loan or an FHA loan, impacts your rate. Different loans have various benefits and qualification criteria. Explore the types of mortgage loans to find the best fit for you.

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Points and Credits: Points are upfront fees you pay at closing to reduce your interest rate, while credits can cover closing costs or other fees. Paying points can lower your rate if you plan to stay in the home long-term. Alternatively, you can take a higher rate for credits to reduce upfront costs.

The Fed: The Federal Reserve’s actions influence mortgage rates. As the central bank of the U.S., it sets monetary policies that affect interest rates. Decisions to raise or lower rates can impact mortgage rates.

Choosing the right mortgage rate is crucial for ensuring that you get the best deal on your home loan. Here are some factors to consider when selecting a mortgage rate:

Fixed vs. Adjustable Mortgage

Understanding the different types of mortgage rates is the first step. Fixed-rate mortgages have a stable interest rate for the entire loan term, while adjustable-rate mortgages (ARMs) have rates that can change after an initial fixed period. Each has pros and cons, so determine which fits your financial goals.

Research Different Lenders

Comparing rates from various lenders is essential to secure the most competitive interest rate. Get rate quotes from multiple lenders and mortgage brokers. Consider the loan officer’s expertise, customer ratings, and the lender’s reputation.

Consider the Loan Term Length

A longer term, like a 30-year mortgage, lowers monthly payments but increases total interest paid. A shorter term, such as a 15-year mortgage, has higher monthly payments but saves on interest over time. Assess your financial situation and goals to choose the best term for you.

Today’s 30-year fixed mortgage rate in 94123 is 6.625% (6.837% APR) with 2.16 points ($3,450 cost).*

Your actual rate may vary based on your financial profile. Get a personalized quote with no impact to your credit score in as little as 3 minutes with our online pre-approval.

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Compare APRs

When comparing mortgage rates, look at the annual percentage rate (APR) along with the interest rate. The APR includes not just the interest rate but also fees and other loan-related costs. For example, Lender A might offer 5.250% with a 5.816% APR, while Lender B offers 5.375% with a 5.625% APR. In this case, Lender B’s loan is cheaper in the long run.

Watch Out for Bait and Switch Tactics

Some lenders advertise low rates but later reveal higher rates and fees. Always request a loan estimate, which provides standardized information for a true side-by-side comparison, instead of relying on a “fee worksheet” which can vary between lenders.

Compare Lender Fees

Review sections A and B of your loan estimate to see the fees that vary by lender. These sections will show you which lender is charging less for their services. At Kambia, we strive to keep costs low and avoid unnecessary fees.

Consider Rate Locks

Locking in a mortgage rate secures a specific interest rate for a set period, usually 30 to 60 days. This protects you from rate increases during that time, which can be beneficial if rates are expected to rise.

Your monthly mortgage interest payment is based on the annual interest rate divided by 12. For example, if your annual rate is 5%, your monthly rate is about 0.417% (.05/12 = .00417). This percentage is applied to the remaining loan balance each month, so the interest amount changes as you pay off more of the loan.

For fixed-rate mortgages, the overall payment stays the same throughout the loan term, consisting of two parts: principal and interest. The principal is the amount you still owe on the loan.

To see how interest payments are spread over the life of a loan, use an amortization calculator. Here’s an example for the first year of a 30-year fixed loan of $350k at a 5% interest rate.

You can use our free mortgage amortization calculator and table here.

No, you have the option to refinance your mortgage as often as it makes financial sense. refinancing can be a smart move if interest rates have dropped since you got your original mortgage. By refinancing to a lower rate, you can reduce your monthly payments and potentially save thousands in interest over the life of the loan. However, carefully consider the associated costs, like closing costs, to ensure the savings outweigh the expenses.

Understanding mortgage rates today is crucial for anyone looking to buy a home or refinance their current mortgage. The interest rate you secure will determine your overall loan cost and monthly payments.

Factors like your credit score, loan term, and loan type can all impact your mortgage interest rate. It’s important to compare rates and lenders to ensure you get the best deal possible.

By staying informed and making smart decisions, you can navigate the mortgage market with confidence.