Best 30-Year Mortgage Rates Today

A 30-year mortgage is a type of fixed-rate loan, meaning your interest rate won’t change throughout the entire term of the loan, and the term of the loan for a 30-year mortgage is just that—30 years. Since you’re locking in the interest rate for the entire loan term, the amount of principal and interest (P&I) included in your monthly payment won’t ever change. 

Keep in mind, while the amount of principal and interest you pay won’t ever change, your actual monthly payment might change. This is because most fixed-rate mortgage payments also include the cost of things like property insurance, real estate taxes, homeowners association (HOA) fees, and private mortgage insurance (PMI) if your down payment is less than 20%. As such, your payment will change with increases or decreases in the costs of these items. 

You can expect your real estate taxes and insurance costs to increase over time, which will result in a corresponding increase in your payment. Once you have 20% equity in your home or other conditions are met, you may also be able to eliminate your PMI. When this happens, your payment will decrease. 

As noted, with a fixed-rate mortgage, the amount of principal and interest included in your payment will remain the same for the duration of your loan. This differs from an adjustable-rate mortgage (ARM), where the amount of interest you pay will periodically change with changes in the interest rate index. 

A 30-year fixed-rate mortgage is a good option when the economy is in a rising-interest-rate or low-interest-rate environment because you’re able to secure low-interest rates for the entire loan term. In contrast, you might choose an ARM if interest rates are expected to decrease.

A 30-year mortgage is also a good idea for people who want to lock in their interest rate for a long period of time and need a longer period of time to pay off their home loan. For people who can comfortably afford a bigger payment, a shorter repayment term is better. This is because the overall borrowing cost is less for mortgages with shorter repayment terms, as you’ll incur interest charges for fewer years. 

If interest rates are expected to decrease, and you’re not worried about fixing your principal and interest payments for the loan term, then an adjustable-rate mortgage might be better. This is because you’ll end up paying less interest if interest rates decrease, which could result in a lower borrowing cost. Keep in mind, interest rate forecasts often change, and the rate on your loan could end up increasing with an ARM. If this makes you uncomfortable, then avoid ARMs.

The mortgage interest rate you’ll receive will depend on the riskiness of your mortgage. This is because lenders charge higher interest rates for riskier loans. For example, loans with smaller down payments and made to borrowers with lower credit scores or weak debt-to-income (DTI) ratios will typically have higher interest rates. One of the best things you can do to qualify for a better mortgage rate is to improve your credit score. 

You can estimate mortgage rates by credit score by using a loan savings calculator such as the myFICO tool created by Fair Isaac Corporation. Using information at the time of writing, you can expect to get a 30-year mortgage rate that’s at least 1.5% less if you have a very good FICO score of 760 compared to a fair FICO score of 620. Rates vary by lender, so this is just an estimate.

A good rule of thumb is that you shouldn’t spend more than 28% of your gross monthly income on expenses related to housing and 36% of your gross monthly income on your total monthly debt payments (these are called debt-to-income ratios). You can quickly estimate how big of a 30-year mortgage you can afford by multiplying how much income you make each month (before deductions for taxes, etc.) by 28% to calculate how much you can spend on housing and by 36% to calculate your maximum total monthly debt (including housing costs). 

For example, if you bring in $5,000 in gross monthly income, your monthly housing expenses shouldn’t exceed $1,400 (28% times $5,000) and your total monthly debt shouldn’t exceed $1,800 (36% times $5,000).

Remember, this is a rough estimate that will vary depending on your situation. Mortgage lenders may allow for total DTI ranging from 36% to 43%, and up to as high as 50%. The higher the DTI that’s allowed, the larger the mortgage you can get. However, qualifying for a mortgage and being able to afford it are two different things. 

When deciding on the size of a mortgage you can afford, it’s a good idea to add the mortgage payment to your monthly budget. You can do this on paper, using a budgeting app, or even via a spreadsheet to see if it’s something you can manage for the long term. Ensure you have a sufficient cushion after paying all of your monthly expenses (e.g., groceries, utilities, entertainment, insurance, car loan payments, etc.). 

If you’re more of a hands-on learner, you could also set aside the estimated monthly mortgage payment in a savings account for a few months (note: if you’re already paying rent or have an existing mortgage, only set aside the additional amount you’ll pay). In this way, you’ll be able to test for affordability and build your savings at the same time. At the end of the trial period, you’ll have a good feel for whether the mortgage payment is sustainable, and you’ll benefit from increased savings. 

Keep in mind other factors affect how much of a 30-year mortgage you can afford. This includes the interest rate, the cost of your property taxes, insurance, HOA fees, and, if necessary, PMI. 

You can use our mortgage calculator to calculate how your monthly payment and total interest charges might change under different interest rate and repayment term scenarios. It’s helpful to consider how much you’ll pay not only every month but also in interest over the entire term of the loan. Make sure to get all the details from your lender about how much each point will reduce your rate so that you can make an informed decision.

Mortgage points, which are also sometimes referred to as “discount points,” are a fee that you pay to your lender to receive a lower interest rate on your mortgage.

When you pay for mortgage points, you’re essentially “buying down” your interest rate to a rate that’s less than what you would otherwise pay. You’ll benefit from a lower interest rate for the entire term of the loan, which can significantly reduce your overall interest costs and your monthly payment.

You can expect to pay 1% of your loan amount for each point you purchase. So, for a $250,000 mortgage, one point would cost $2,500 (1% times $250,000). In exchange, your interest rate will be reduced by a specified percentage. The exact amount that each point will reduce your rate will vary based on the lender, type of mortgage, and interest rate environment. However, we’ll assume a reduction of 0.25% per point as an example. Using our scenario and a rate of 3%, your rate would be reduced to 2.75% if you purchased one mortgage point.

The amount needed for a down payment will depend on the lender, type of mortgage you get, characteristics of your property, loan size, and your creditworthiness. This can range from as low as nothing down for loans insured by the VA and USDA, 3% for conforming conventional loans, 3.5% to 10% for FHA-insured loans, and 10% (up to 20% to 40%) for jumbo loans.

Common down payments for different situations and mortgage types are as follows:

• Mortgage loans insured by the government (e.g., FHA loans, VA loans, and USDA loans) have some of the smallest down payments ranging from as low as 3.5% to 10% for FHA loans to potentially no down payment for VA loans and USDA loans.  
• Conventional loans backed by Fannie Mae and Freddie Mac can have down payments as low as 3%. 
• People with bad credit can expect to need a down payment as low as 10% for an FHA loan, but may still be able to qualify for nothing down on some VA and USDA loans.   
• Non-conforming conventional loans that exceed the conforming loan limits established by the FHFA (commonly referred to as “jumbo loans”) that aren’t government-insured usually have down payments ranging from 20% to 40%, but could be as low as 10%.
• Jumbo VA loans that exceed the FHFA conforming loan limits may also not require any down payment.  

The exact down payment you’ll need will depend on your specific situation. However, recent research from the National Association of REALTORS suggests that the median down payment for all buyers in the year 2020 was 12%.

Remember, you’ll typically be required to purchase private mortgage insurance if you make a down payment of less than 20%. The cost of this insurance will be added to your monthly payment. It provides your lender with protection in case you don’t pay back your loan as agreed. This is an added cost you should consider when deciding which loan to choose.

The rates on 30-year mortgages are higher because they’re considered riskier than shorter-term mortgages like 15-year. One reason for this is that with a shorter-term mortgage, there’s a shorter period of time for the lender to recoup their money. Another reason is lenders are exposed to less interest rate risk with shorter-term fixed rates than with longer-term fixed rates (less risk still with variable rates). 

Since lenders are exposed to less risk with shorter-term mortgages, they’re typically able to charge lower interest rates.