National Average Mortgage Rates
Rates data is based on a borrower with good credit, a conforming loan amount (at least $200,000 but less than the national conforming loan amount), and a loan-to-value ratio of less than 80% (For purchase loans, this corresponds to a down payment of 20% or more). © Zillow, Inc., 2006-2016. Use is subject to Terms of Use
U.S. News Expert Insights
“Mortgage rates remained high this week ahead of the Federal Open Market Committee meeting, which concludes with a rate-setting decision on June 12. Federal Reserve officials are almost certainly poised to hold rates at their current levels, where they’ve been for nearly a year.
“Most economists believe that the Fed will begin cutting the benchmark rate in September at the earliest, as long as policymakers continue to see proof that inflation is progressing closer to the central bank’s 2% annual target. Although price growth has subsided on a monthly basis, inflation rose 3.4% year over year in April.
“In the meantime, mortgage rates are unlikely to rise or fall dramatically. The average 30-year mortgage rate is sitting at around 7%, and it will stay higher for longer until Fed officials feel comfortable enough to implement rate cuts. In other words, those who are waiting for rates to fall in order to buy a home will be on the sidelines for a while longer.”
– Erika Giovanetti, U.S. News Loans Expert
Average Mortgage Rates, Daily
Product |
Interest Rate |
APR |
|---|---|---|
|
30 Year Fixed |
6.777% |
6.848% |
|
20 Year Fixed |
6.51% |
6.594% |
|
15 Year Fixed |
5.929% |
6.039% |
|
10 Year Fixed |
5.764% |
5.923% |
|
30 Year Refinance |
6.942% |
7.028% |
|
15 Year Refinance |
6.003% |
6.156% |
|
5 Year ARM |
6.612% |
7.668% |
|
3 Year ARM |
8.125% |
8.355% |
|
Jumbo |
6.842% |
6.907% |
|
VA |
5.887% |
6.254% |
|
FHA |
5.986% |
6.753% |
Data as of: 6/5/2024
Rates data is based on a borrower with good credit, a conforming loan amount (at least $200,000 but less than the national conforming loan amount), and a loan-to-value ratio of less than 80% (For purchase loans, this corresponds to a down payment of 20% or more). © Zillow, Inc., 2006-2016. Use is subject to Terms of Use
A 15-year fixed-rate mortgage is a home loan that’s paid off in 15 years and has an interest rate that never changes throughout the life of the loan. Your interest rate and monthly payment always stay the same, offering predictability.
The shorter loan term translates to less risk for the lender, which often leads to lower interest rates for borrowers compared with 30-year mortgages. The shorter term also means a 15-year loan is repaid on an accelerated schedule. More of each payment goes toward the principal, and you build equity faster than you would with a longer-term mortgage.
But because the monthly payments are about 30% to 40% higher compared with a 30-year loan, “The 15-year is harder to qualify for,” says Melissa Cohn, regional vice president at William Raveis Mortgage. However, “15-year mortgages save borrowers a significant amount of money over the life of the loan,” Cohn adds.
Let’s say you take out a home loan for $400,000 with a 20% down payment and a 6% interest rate. Your monthly principal and interest payment would be $2,700 for a 15-year term and $1,919 for a 30-year term.
Calculate Your Mortgage Payment
An initial payment made when the home is bought.
The amount of time you have to repay the mortgage.
The APR (annual percentage rate) you pay to the lender, which can be found in your loan agreement. The default displayed represents yesterdays national average APR for 30-year fixed mortgages.
Payment Details
Monthly Payment Breakdown
Pros
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Lower interest rates. Lenders are exposed to less risk with shorter-term loans and can offer borrowers lower interest rates. Of course, “The better your credit score, the better the rate you’ll be offered,” says Ray Rodriguez, a regional mortgage sales manager with TD Bank.
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Less interest overall. Because 15-year home loans are paid on a faster amortization schedule, borrowers pay less interest over the life of the loan.
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Builds equity faster. On a shorter loan term, a bigger portion of the monthly payment goes toward the loan principal rather than interest.
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Pays off the home sooner. You could get rid of your loan in half the time of a traditional 30-year mortgage.
Cons
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Higher monthly payments. Make sure you can afford the payments that come with a shorter loan term because they can squeeze your monthly budget.
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Opportunity costs. With higher mortgage payments, you have less money for other financial goals, such as retirement and emergency savings.
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Less affordability. When you take out a mortgage, your lender will check that you can afford the monthly payments. The higher payments of a 15-year loan might limit you to a more modest home than you would be able to buy with a 30-year loan.
Refinancing involves replacing your current mortgage with a new home loan that comes with different and, ideally, better terms.
If you’re refinancing a 30-year mortgage into a 15-year loan, you may save interest in the long run but have higher monthly payments and upfront closing costs. Look at how much interest you’ll pay in both scenarios if your refinancing goal is to save money.
Let’s say you buy a house for $400,000 with an interest rate of 6% and a 30-year loan term, and you put down 20%. Five years into the loan, you consider refinancing into a 15-year mortgage. Answer these questions to figure out if you would save money:
- How much interest would you pay on the original loan? If you follow the amortization schedule over 30 years, you’ll pay $371,044 in total interest.
- How much of the original home loan have you paid off? When you refinance, your balance is lower because you’ll have paid down some of the principal. Five years into the 30-year loan, your principal balance would be about $293,874. You’ll have paid about $106,216 in interest.
- How much interest will you pay on the new loan? If you take out a 15-year mortgage for $293,874, you would pay $152,601 over the life of the new loan.
- How much interest would the new loan add to your total paid? Add the interest paid on the old loan ($106,216) and interest paid on the new loan ($152,601) to get $258,817 in total interest for both loans.
- How much do you save by refinancing? Subtract the interest paid on both loans from the total interest costs on the original loan. In this example, you would save $112,227 in interest.
| Total interest on the original 30-year loan | $371,044 |
| Interest paid five years into 30-year loan | $106,216 |
| Interest paid when you refinance into 15-year loan | $152,601 |
| Interest paid on both loans | $258,817 |
| How much you save by refinancing | $112,227 |
If you want to save even more on interest, you may consider supercharging your payoff timeline. You can do this by paying more toward the principal of your 15-year mortgage each month.
Looking again at a $400,000 mortgage, you would make $2,700 monthly payments with a 15-year loan term and a 6% interest rate. If you put an extra $2,000 per month toward the principal, you would pay off the mortgage in seven years instead of 15 and save $93,928 in interest over the life of the loan.
The amount you would need to pay on top of your normal principal depends on the size of your mortgage and your interest rate. You can use a mortgage calculator to figure out your extra payment, or ask your lender to help you with the math.
Regardless, “Make sure you can comfortably afford the higher payment, with some wiggle room, in the event that your expenses increase over time,” Rodriguez says.
If this doesn’t work with your budget, you can still reduce your overall interest costs by “making an additional payment each year to decrease the length and cost of the loan,” Rodriguez says.
When it comes to saving money over the long term, a 15-year fixed-rate mortgage is better than a 30-year home loan.
The shorter loan term “is a good option for those who are looking to pay off the loan more quickly and reduce their overall interest expense,” Rodriguez says. “Additionally, if building fast equity is a priority for a borrower, oftentimes a 15-year mortgage can be a quicker way to do it than a 30-year mortgage.”
It’s possible to refinance an FHA loan, and there are several options for doing so:
- FHA streamline refinances. These enable you to refinance an existing FHA mortgage with limited documentation and underwriting.
- FHA simple refinances. These replace your existing FHA loan with a new FHA loan with a fixed or adjustable interest rate. You cannot take cash out with this kind of refinance.
- FHA cash-out refinances. With an FHA cash-out refinance, you take out a new loan for more than you owe on your current loan, pay off your original mortgage and then keep the difference.
- FHA 203(k) refinances. These are also known as rehab loans, and they combine renovation and repair costs into a single loan.
- Conventional refinances. You can convert your FHA loan into a conventional loan by refinancing. This new loan will not be backed by the FHA, but it can eliminate your mortgage insurance if you have at least 20% equity in the home.
- Minimum FICO Credit Score
-
Not disclosed
- Minimum FICO Credit Score
-
620
- Minimum FICO Credit Score
-
620
- Minimum FICO Credit Score
-
620
- Minimum FICO Credit Score
-
620
- Minimum FICO Credit Score
-
620
- Minimum FICO Credit Score
-
620
- Minimum FICO Credit Score
-
Not disclosed
- Minimum FICO Credit Score
-
620
- Minimum FICO Credit Score
-
Not disclosed