Mortgage Rates Rise: October 9, 2024 Update on 30-Year and 15-Year Fixed Mortgages
As of October 9, 2024, mortgage rates have seen a notable increase, with the average rate for a 30-year fixed mortgage now at 6.96%, up from 6.70% just a week ago, according to data from Curinos. This rise in rates means that borrowers will face higher interest costs this week.
For those considering a shorter loan term, the average rate for a 15-year fixed mortgage has also climbed to 6.13%, reflecting a 0.39 percentage point increase from the previous week when it was at 5.74%.
If you're looking to refinance your mortgage, it's crucial to compare your current rate with today’s refinance rates to determine if you can secure a better deal.
The annual percentage rate (APR) for a 30-year fixed mortgage is currently at 6.98%, a rise from last week’s 6.71%. For a $100,000 mortgage at this rate, borrowers can expect to pay approximately $663 per month in principal and interest, totaling around $138,615 in interest over the life of the loan.
Similarly, the APR for a 15-year fixed mortgage stands at 6.16%, up from 5.77% last week. Monthly payments for a $100,000 mortgage at this rate would be about $851, resulting in approximately $53,161 in total interest paid.
In the jumbo mortgage category, the average interest rate for a 30-year fixed jumbo mortgage is now 6.99%, which is a 0.26 percentage point increase from the previous week. For a $750,000 jumbo mortgage, monthly payments would be around $4,986 at this rate.
Before embarking on your home-buying journey, it's essential to understand your budget. Utilizing a mortgage calculator can provide a rough estimate of what you can afford, helping you make informed decisions.
The APR is a critical figure as it encompasses the total cost of the loan, including interest and fees, expressed annually. This number is particularly useful for borrowers planning to hold onto their mortgage for the entire term.
Several factors influence mortgage interest rates, including the overall health of the economy, benchmark interest rates, and individual borrower circumstances. The Federal Reserve's decisions on interest rates and inflation trends can lead to fluctuations in mortgage rates. Generally, when the Fed raises rates, it becomes more expensive for banks to lend, which can lead to higher mortgage rates. Conversely, rates may decrease during periods of rate cuts and lower inflation.
To qualify for competitive mortgage rates, home buyers can take several steps to improve their financial standing. Maintaining a good credit score, ideally between 670 and 850, and keeping a debt-to-income (DTI) ratio below 43% can significantly enhance your chances of securing favorable rates. Additionally, making a down payment of at least 20% can help you avoid private mortgage insurance (PMI).
Conventional loans, typically issued by private lenders, often require good credit and a minimum 20% down payment for the best rates. However, some lenders offer first-time homebuyer loans with lower down payment options starting at 3%.
For buyers with limited credit or financial resources, government-backed loans may be more accessible. FHA loans, for example, can require as little as 3.5% down with a minimum credit score of 580. For those with credit scores between 500 and 579, a 10% down payment is necessary, though mortgage insurance premiums apply.
USDA loans are available for eligible rural buyers with moderate or lower incomes and do not require a down payment, although fees apply. Lastly, VA loans offer significant advantages for qualifying military personnel, including no down payment in most cases and a one-time funding fee without annual fees.