Understanding Different Mortgage Rates

If you're going to buy a home, you'll likely need a mortgage. It will probably be the biggest loan you've ever taken out—and getting it wrong can be a mistake that will cost you for years. So getting it right means educating yourself. Start by checking our mortgage rates tables, which are updated on a daily basis. Then, read below to learn more about how the mortgage market works, which type of mortgage to choose, how to find and lock in the best rate, and more.

Key Takeaways

  • A mortgage is a loan is typically used to purchase a home in which there are many options available for the length of the loan term and interest rate.
  • Typically mortgages have a loan term of 30 years, but you can also have a 10 or 15-year period.
  • The loan's interest rate can significantly affect the total cost of your mortgage and your monthly payment.
  • A fixed-rate mortgage will have the same interest rate throughout the loan, while an adjustable-rate mortgage (ARM) is a variable-rate loan.

Examples of Mortgage Rates

How much that mortgage will cost starts with the interest rate, you're charged. Knowing the going rate will help you figure out how much you can afford to borrow—and keep you from accidentally agreeing to a loan that is higher than it should be for its terms and your credit score. 

The example mortgage rates below are hypothetical and are for informational purposes only. Loans above a certain threshold may have different loan terms, and products used in our calculations may not be available in all states. Loan rates used do not include amounts for taxes or insurance premiums. Individual lender’s terms will apply.

30-Year Mortgage Rate Example







30-year fixed
2.890% 3.090%

30-year fixed FHA
2.440% 3.320%

30-year fixed VA
2.880% 3.140%

30-year fixed jumbo
2.900% 2.970%

15-Year Mortgage Rate Example







15-year fixed
2.300% 2.610%

15-year fixed VA
2.250% 2.710%

15-year fixed jumbo
2.270% 2.330%

Adjustable Rate Mortgage (ARM) Example







10/1 ARM



7/1 ARM
2.950% 3.980%

5/1 ARM
2.950% 4.030%

The Basics of Mortgage Interest Rates

Buying a mortgage can be intimidating. There are different mortgage types, interest rates, and mortgage insurance. The process, for many, has proved to be a frustrating one.

The interest rate you pay will significantly affect the total cost of your mortgage. Mortgages can typically last up to 30 years. The choices you make can affect your finances for up to that length of time, so it's vital to understand how interest rates work. To get this right as you start, we've provided the scoop on exactly how interest rates work.

Using a mortgage calculator is a good resource to budget these costs.

Mortgage Payment Structures

With so many different ingredients making up a mortgage payment, it's a good idea to know exactly where all the costs are coming from. Don't get caught paying more than you thought you had to. Know all the fees before you buy.

Understanding Mortgage Points

Just as there are different types of mortgages, there are also different ways to pay off your mortgage. Depending on the structure of your loan, mortgage points can be a reliable way to reduce the interest you're charged. But since you pay points up front, they're not the best option in every situation. We explain what they are and how they work.

Fixed-Rate vs. Adjustable Rate

You've been gearing up to finally take out a mortgage on a home you may have been eyeing for some time. The question is, which type of mortgage makes the most sense for your situation? A fixed-rate mortgage is secure but may cost more at the beginning than an adjustable-rate mortgage. On the other hand, if rates go up, you'll eventually pay more for that adjustable-rate loan. 

Avoid making a mistake that could cost you serious money by knowing how each type of mortgage can play out in the future. Here's the information you need to make the right decision.

Which Term Is Better Right Now?

What do you need, fixed-rate or variable-rate mortgage? When taking out a mortgage, you are confronted with all kinds of questions to which you may not know the answer. To pick the right mortgage, it’s important to remember these differences.

We don’t want you to get the wrong deal. We’ve spelled out the difference between a fixed-rate and a variable-rate mortgage so you can be confident in your decision.

Locking in Your Rate

That great low-interest rate you found in an ad may have vanished by the time you're ready to close your mortgage deal. We don't want that to happen to you. Follow these steps to hold on to a good rate while finding the home you want.

What Affects Mortgage Rates?

Why do mortgages cost what they do? How can you figure out whether this is even a good time to buy a home? Many different components will shape what you are paying for your mortgage. Get smarter about mortgage rates and what you can expect in the future, so you have the tools to make the wisest choices in today's economic environment.

Mortgage rates seem to be a continually changing number that is generally hard to track. There are a few specific indicators that can give you a good idea of future rates. The better you can predict the rates down the line, the better you can make financial decisions.

If you're thinking about buying, selling, or refinancing your home, mortgage rates will play a key role in how much financial sense those decisions will make. For example, what moves should you consider if rates are rising? And what should you do if a lower rate is in the wind? Don't jump into a purchase before learning how to read that forecast and what the different weather could mean for you.

Rising Rates and Your ARM

Adjustable-rate mortgages (ARMs) generally have a very attractive introductory rate. But after a specified time, the rate changes according to the terms of the loan. Here's how to strategize if you have an ARM and rates are rising. And if you're considering one of these loans, we're here to help you think through how you would toggle between the financial plus of a low initial rate and the potential hit of rising mortgage rates down the road.

Interest Rates and the Housing Market

Mortgage rates affect how much you need to pay on your mortgage. They can also change the housing market as a whole. Understanding how these causes and effects work will help you search for the best deal for a new home or decide whether it's time to refinance your current place. Learn which rates and indexes to watch to make a sound decision about your next step.

House Prices vs. Interest Rates

Which should drive your decision to buy a new home? There are so many elements that can determine what you will end up paying for your home in the end. When house prices are low, interest rates tend to be higher and vice versa. In either landscape, there are different aspects to consider before you buy a mortgage.

Shopping for Mortgage Rates

Shopping for a mortgage can be a stressful and time-consuming experience. Make it less so by getting your thoughts and the information you need to be organized before you get started. This will also help you identify and deal with any problems that could make getting a loan more difficult. This will put you in the best position possible to get a favorable mortgage interest rate—and make sure that it is the best you can do. That quiets that looming thought; what if there’s something better?

Article Sources
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  1. Consumer Financial Protection Bureau. “What is the Ability-to-Repay Rule? Why is it Important to Me?

  2. Consumer Financial Protection Bureau. “What Are (Discount) Points and Lender Credits and How Do They Work?"

  3. Consumer Financial Protection. "What is the Difference Between a Fixed-Rate and Adjustable-Rate Mortgage (ARM) Loan?"

  4. Consumer Financial Protection Bureau. "Adjustable-Rate Mortgages: Find Out How Your Payment Can Change Over Time."

  5. Consumer Financial Protection Bureau. “Buying a House: Tools and Resources For Homebuyers.”

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