Mortgage interest rates today, April 21, 2024

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The average 30-year mortgage rate exceeded 7% this week, according to data from Zillow. Interest rates have been rising in recent weeks as hot economic data raises questions about when the Federal Reserve will finally start cutting the federal funds rate.

Once the Fed starts cutting rates, mortgage rates should drop. But investors don’t expect this to happen until the Fed’s September meeting, according to the CME FedWatch Tool. If inflation remains high, we may have to wait even longer before interest rates fall.

If you’re planning to buy a home soon, you can soften some of the impact of high interest rates with a good credit score. According to myFICO, borrowers with a score of 700 or higher can still get an interest rate near 6%, while those with scores in the low 600s may have to pay more than 8% to get a mortgage.

Paying off debt or lowering your credit utilization can improve your credit score and help you find affordability in this high-interest rate environment.

Mortgage rates today

Mortgage type Average rate today
This information was provided by Zillow. See more mortgage rates on Zillow

Mortgage interest rates today

Mortgage type Average rate today
This information was provided by Zillow. See more mortgage rates on Zillow

Mortgage calculation

Use our free mortgage calculator to see how current interest rates will affect your monthly payments.

Mortgage calculation

Your estimated monthly payment

  • Paying one 25% a higher down payment would save you $8,916.08 on interest charges
  • Lowering the interest rate by 1% would save you $51,562.03
  • Pay extra $500 each month the term of the loan would increase 146 months

By clicking ‘More details’ you will also see how much you will pay over the entire term of your mortgage, including how much is the principal versus interest.

30-year fixed mortgage rate

According to Freddie Mac, the average 30-year fixed mortgage rate was 7.10% last week. This is an increase of 22 basis points compared to the previous week.

The 30-year fixed-rate mortgage is the most common type of mortgage. With this type of mortgage, you pay back what you borrowed in 30 years, and your interest rate does not change during the life of the loan.

The long 30-year term allows you to spread your payments over a long period of time, helping you keep your monthly payments lower and more manageable. The disadvantage is that you get a higher rate than with shorter terms or adjustable rates.

15-year fixed mortgage rate

The average 15-year mortgage rate rose to 6.39% last week, according to data from Freddie Mac. This is an increase of 23 points compared to the previous week.

If you want the predictability that comes with a fixed rate but want to spend less on interest over the life of your loan, a 15-year fixed rate mortgage may be right for you. Because these terms are shorter and have lower interest rates than 30-year fixed-rate mortgages, you can potentially save tens of thousands of dollars in interest. However, you do have a higher monthly amount than with a longer term.

How will Fed rate hikes affect mortgages?

The Federal Reserve has dramatically raised the fed funds rate in an effort to slow economic growth and control inflation. So far, inflation has slowed significantly, but is still slightly above the Fed’s 2% target rate.

Mortgage rates are not directly affected by changes in the federal funds rate, but often trend upward or downward prior to Fed policy changes. This is because mortgage rates change based on investor demand for mortgage-backed securities, and this demand is often influenced by how investors expect Fed rate hikes to affect the broader economy.

The Fed has indicated that it has likely raised rates and that it could start cutting rates soon. This could cause mortgage rates to fall later this year.

When will mortgage interest rates go down?

Mortgage rates have risen dramatically over the past two years but are expected to fall sometime this year.

In March 2024, the consumer price index increased by 3.5% year-on-year. Inflation has slowed significantly from its peak last year, but needs to slow further before interest rates start falling.

For homeowners looking to leverage the value of their home to cover a major purchase such as a home renovation, a Home Equity Line of Credit (HELOC) may be a good option while we wait for mortgage rates to drop. Check out some of our top HELOC lenders to start your search for the right loan for you.

A HELOC is a line of credit that allows you to borrow against the equity in your home. It works similarly to a credit card, in that you borrow what you need, rather than getting the entire amount you borrow at once. It also allows you to tap into the money you have in your home without having to replace your entire mortgage, as you would with a cash-out refinance.

Current HELOC rates are relatively low compared to other lending options, including credit cards and personal loans.