Whether you’re already a homeowner or you’re looking to refinance your mortgage, it’s important to understand what factors influence your mortgage rate. Interest rates can have a big impact on how much house you can afford, as well as the amount of interest you pay on your home loan.
Let’s look at what mortgage rates are, as well as the factors that play into today’s mortgage rates.
What are mortgage rates?
A mortgage rate is also called a mortgage interest rate or interest rate. This rate is part of what you pay to borrow money from a lender to buy a house.
Instead of paying your mortgage lender a lump sum, you pay interest as part of your monthly payment for your home loan. This makes homeownership much more affordable, since few of us could afford a lump sum interest payment.
Mortgage rates fluctuate over time. They’re primarily based on speculation in the market, and they traditionally follow the ten-year treasury note. Interest rates can change multiple times a day.
Mortgage-backed securities dictate current interest rates. People invest in these based on economic data and announcements from the Federal Reserve. In this way, the economy and Federal Reserve can have an impact on today’s mortgage rates.
What are the mortgage rates today?
If you’re in the market for a home loan, today (July 2023) we’re seeing interest rates ranging from 5% to 8%.
This is a range because your individual financial situation affects the interest rate you qualify for. These factors can play a part in the interest rate you qualify for:
Credit score
Amount of equity in the property
Property type
Loan term
Keep in mind that interest rates will also fluctuate based on the type of loan you have. For example, a 30-year FHA home loan is averaging at 6.5%, while a conventional 30-year fixed is at 7.0%.
The bottom line
Mortgage rates change based on a variety of factors and are impossible to predict exactly where they will go. What you can control is working with a reputable mortgage professional who will listen to your unique scenario and point you in the right direction to find the best product/rate for your situation. The earlier you start this process the more options you will have.
To see what mortgage rate you qualify for, reach out today to get a mortgage pre-approval!