Review current mortgage rates for January 20, 2020. The table below enables you to compare interest rates and closing costs for leading lenders in your area. Use the refine your search menu to view mortgage rates based on your individual criteria including loan amount, loan-to-value ratio and other inputs. The rate table shows you the APR, mortgage rate, loan type, monthly payment and fees for different lenders and mortgage programs including 15 and 30 year fixed rate loans.
We recommend shopping at least five lenders to find the loan with the lowest mortgage rate and closing costs. Additionally, market conditions fluctuate constantly so we advise you to check our lender tables frequently for the most current mortgage rates.
Mortgage rates are influenced by many factors including the economy, market conditions and your specific circumstances and loan. We review these factors below and explain how each affects your mortgage rate.
Market Conditions. The economy and overall market conditions are play a major role in determining mortgage rates. In general, when the economy is good, mortgage rates are higher and when the economy is struggling, rates are lower. Mortgage rates also correlate to the interest rates set by the Federal Reserve. When the Fed raises its interest rates, which usually happens when the economy is strong, mortgage rates tend to follow.
Mortgage Length. The longer your loan, the higher your mortgage rate and the shorter your loan, the lower your rate. So if you want to save a lot of money on interest expense, choose a shorter loan such as a 15 year mortgage. The downside to shorter loans is that they have higher monthly payment because you repay the mortgage over a shorter time period. Our rate tables enable you to compare mortgage rates and payments for loans with different lengths.
Loan Program. Fixed rate mortgages tend to have higher mortgage rates than the initial rate for an adjustable rate mortgage (ARM). The drawback to an ARM is that your rate and payment may increase over the course of your loan.
Credit Score. For most loan programs, the higher your credit score, the lower your mortgage rate and vice versa. This is why having a good credit score can save you money on your mortgage.
Your Down Payment. You are usually required to make a down payment of at least 20% to receive the best loan terms from a lender, including the lowest mortgage rate. Your down payment also determines if you are required to pay mortgage insurance, which is an extra cost for borrowers to consider.
Loan Amount. You may be required to pay a higher mortgage rate for larger loans, also called jumbo loans. Additionally, some lenders charge higher rates for smaller loans, below $75,000 because they require the the same amount of work but lenders make less money with smaller mortgages. Be sure to understand how your loan amount impacts your mortgage rate.
Lender and Location. Mortgage rates vary by lender and location. Rates tend to be lower in more populated areas with more lenders and lower in more rural areas. The more lenders in an area, the more competition which usually means better loan terms. Additionally, states apply different mortgage regulations which may impact your rate and fees. Finally, lenders have discretion to set the loan terms they offer so that is why it is important -- and can potentially save you a lot of money -- to always contact multiple lenders before you select a mortgage.
Closing Costs. Mortgage rates are usually inversely related to closing costs, which means the higher your costs, the lower your rate. In some case you may pay a higher rate and receive a rebate from the lender instead of paying closing costs. It is important to understand the relationship between mortgage rates and closing costs to select the loan terms that best meet your needs.
Discount Points. You can choose to pay discount points to lower your mortgage rate. A discount point equals 1% of the loan amount and each point should lower your rate by approximately .250%. Our lender table enables you to review how changes in discount points impact your interest rate.
Personalize your mortgage search by selecting numerous options in the "Refine Your Search" menu including your location, loan amount, mortgage program, credit score and discount points. Understand the difference in mortgage rates and monthly payments between a 15 and 30 year loan. Select the boxes for FHA and VA loans to review rates and fees for these no or low down payment mortgage programs. The lender table provides updated interest rates, APRs, monthly mortgage payments and closing costs in response to each selection you make. Plus, our rate tables are free to use so you can run numerous scenarios to evaluate your personalized mortgage options.
Use our lender tables to compare current mortgage rates and fees for multiple lenders. Our tables put you in control by enabling you to review rates without providing any personal information. The rate tables also enable you to understand how your estimated monthly mortgage payment changes depending on the interest rate and several other inputs. The APR (Annual Percentage Rate), highlighted in blue, enables borrowers to more easily compare mortgage rates and closing costs for several lenders using a single figure. In short, the lower the APR, the lower the combined mortgage rate and fees the lender is offering. You can also use our Mortgage Comparison Calculator to compare mortgages with different interest rates and fees to select the loan that is right for you. Mortgage rates are influenced by multiple factors including loan size, program, your credit score and discount points and you can use our rate tables to understand in real-time how changes to these inputs affect your loan terms.
Just like with any other major purchase, you should shop mortgage lenders to find the best offer. Contacting multiple lenders takes a little more time but can save you thousands of dollars. For example, on a $300,000 mortgage, lowering your mortgage rate by .125% saves you almost $8,000 in total interest expense. FREEandCLEAR recommends that you contact at least five lenders to find the mortgage with the most attractive terms, including the lowest interest rate and closing costs, and our rate tables make the process easy. Simply click on a lender logo or green arrow to be directed to the lender’s web site to confirm your loan criteria and mortgage terms. You can also use our Personalized Mortgage Quote form to receive personalized loan quotes from multiple lenders.
When you contact lenders request that they provide you a written quote or a Loan Estimate that outlines the key terms of their mortgage proposal including mortgage rate and closing costs. Lenders will ask you some questions regarding your financial profile so that they can confirm the details of their proposal and possibly even pre-approve you for your mortgage. Please note that lenders should not charge you to provide a mortgage proposal. When speaking with lenders request that they not pull your credit report (so your credit score is not negatively impacted), ask them the right questions and make sure they have the relevant experience to close your mortgage. Narrow your options down to a handful of lenders and negotiate the best terms possible. Comparing mortgage proposals, asking the right questions and doing a little negotiating will help ensure that you select the lender that best meets your goals.
The most important thing to remember when you shop for mortgage is to compare multiple proposals with similar loan terms. The more lenders you shop, the more likely you are to find the best loan terms. You should also make sure that you review comparable loan proposals for all lenders. For example, comparing a 30 year fixed rate mortgage with one discount point to a an adjustable rate mortgage with no discount points does not make much sense. These programs have different interest rates, loan features and risks. It is important to understand your financing options but make sure you are consistent when you shop mortgages and lenders. It is also important to highlight that you should never pay a lender to receive estimated loan terms and in most cases lenders do not need to pull your credit report to provide you a proposal. This means that shopping for a mortgage is free and should not hurt your credit score.
You should also confirm that a lender’s proposal reflects current mortgage rates as well as all closing costs you are required to pay. This helps prevent a bait and switch situation where a lender entices you with one set of loan terms only to change the terms prior to closing. Depending on market conditions mortgage rates can change daily or even hourly so make sure you request updated loan terms and consider locking your mortgage when you select your lender.
Mortgage rates trended lower this week, reacting positively to the release of the latest Federal Reserve meeting minutes that reinforced the Fed's patient approach to monetary policy. The favorable market development follows the Fed's decision to keep interest rates unchanged at its December meeting. The Fed weighed a strong job market and household spending against low inflation and global economic uncertainty in holding the target range for the Federal Funds rate at 1.500% to 1.750%.
The Fed's meeting statement, subsequent remarks and minutes also suggest that interest rates could remain at their current level for the foreseeable future, absent a significant shift in the economy. After three interest rate cuts in 2019, it appears that the Fed's strategy has shifted firmly into wait and see mode in 2020.
This minutes were well received by the market which feared the Fed could signal near-term rate hikes in response to positive economic developments including higher than expected U.S. economic growth, a strong stock market, progress on multiple trade resolutions and a robust jobs report that showed unemployment at a 50 year low.
The news had a positive impact on mortgage rates, which fell for several programs, and continue to sit near a multiyear low to kick off the new year.
The rate for a 30 year fixed rate mortgage dipped 0.125% to 3.375%, while the rate for a 15 year fixed rate mortgage remained at 3.000%. Jumbo mortgage rates moved 0.125% lower to 3.500%, slightly higher than conforming loan rates. In more good news, non-owner occupied mortgage rates improved 0.125% to 3.625%, offering an attractive financing option for rental property buyers. The rate on a 5/1 adjustable rate mortgage (ARM) also slid 0.125% to 3.125%, as shorter term financing remains a less expensive option for risk tolerant borrowers. While FHA and VA mortgage rates held steady at 3.250%, both programs remain appealing to borrowers focused on low or no down payment programs, especially first-time home buyers.
After nine increases over four years, the Fed's decision to lower interest rates in 2019 for the first time in over a decade represented an important policy change, although the rate cutting phase appears to in the past.
Going forward, we expect the Fed to apply a more flexible strategy that enables it to loosen or tighten monetary policy as economic conditions evolve, although any near-term moves are unlikely. While the Fed continues to reiterate its measured outlook, the question is how long rates will stay at this level in light of favorable economic news and a rising equity market.
Because rates are impossible to predict, prospective borrowers looking to buy a home or refinance should take advantage of current low mortgage rates. Additionally, as lenders react differently to changing market dynamics, we have seen a wider range in pricing, which means borrowers benefit more by comparing multiple lenders.
Market conditions constantly shift, so we continue to actively monitor the market for new developments. Borrowers should check the FREEandCLEAR rate tables regularly to review personalized, updated mortgage rates for lenders in their area. Our rate tables are free to use and require no personal information.
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Mortgage Rate Pricing: https://www.consumerfinance.gov/about-us/blog/7-factors-determine-your-mortgage-interest-rate/