Today's 30-year mortgage rates: Thursday, November 19, 2020
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Current 30-year mortgage rates
As of November 19, 2020, the average 30-year fixed mortgage rate is 2.72%, and the 30-year fixed refinance rate is 3.03%. You can compare 30-year rates to what you'd pay on other terms below:
|Mortgage term||Average interest rate|
|30-year fixed refinance||3.03%|
|15-year fixed refinance||2.56%|
|10-year fixed refinance||2.57%|
Mortgage rates from the Federal Reserve Bank of St. Louis; refinance rates from Bankrate, current as of November 19, 2020.
30-year mortgage rates over the last 10 years
Here are the lowest 30-year fixed rates each year, from 2010 to 2019:
Over the last decade, the lowest rates have been well over 3%, so now is a better time than ever to get a 30-year fixed-rate mortgage. If your finances are in a good place, you could lock in a rate below 3% for 30 years.
What is a 30-year fixed mortgage?
When you apply for a mortgage, you choose between two basic types of loans: a fixed-rate loan or an adjustable-rate loan.
A fixed mortgage locks in your rate for the entire life of your loan. An adjustable mortgage keeps your rate the same for the first few years, then changes it periodically, usually once per year.
When you choose a fixed mortgage, you select the term length. A 30-year loan is the most common term length for new mortgages, but lenders offer other term options.
A 30-year fixed mortgage keeps your rate the same for all 30 years, until you've completely paid off your mortgage. If mortgage rates in the US trend upward or downward during those 30 years, you won't be affected. Whereas if you had chosen an adjustable-rate mortgage, then your rate would go up or down every year based on the economy.
Is a 30-year fixed mortgage a good deal?
A 30-year fixed mortgage is a good deal overall right now, but there are still things to consider.
Overall, a fixed-rate mortgage is the better financial choice than an adjustable-rate mortgage. Mortgage rates are at historic lows, so there's a good chance your adjustable rate would increase down the road. But you have the chance to lock in a super low rate for the entire life of your loan with a fixed-rate mortgage.
While 30-year rates are low, you'll pay an even lower rate with a shorter term, like a 20-year or 15-year fixed mortgage. That's the general rule: The shorter your fixed-rate term, the lower the rate. You'll also pay less interest over time with a shorter term, because the mortgage will be paid off sooner.
But your monthly payments will be lower with a 30-year mortgage than with a shorter term, because the loan payments are spread out over a longer amount of time.
How to get a good 30-year fixed rate
Lenders take your financial profile into consideration when determining an interest rate. The better your finances are, the lower your rate will be.
Lenders look at three main factors: down payment, credit score, and debt-to-income ratio.
- Down payment: Depending on which type of mortgage you take out, a lender might require anywhere from 0% to 20% for a down payment. But the higher your down payment is, the lower your rate will likely be. If you can provide more than the minimum, you could score a better rate.
- Credit score: Most mortgages require a minimum 620 credit score, and an FHA loan lets you get a mortgage with a 580 score. But the higher your score is, the better. If you can get your credit score above the minimum requirement, then you could snag a lower rate. To improve your score, try making payments on time, paying down debts, and letting your credit age.
- Debt-to-income ratio: Your DTI is the amount you pay toward debts each month in relation to your monthly income. Most lenders want to see a minimum DTI of 36%, but you can land a lower rate with a lower DTI. To decrease your DTI, you either need to pay down debts or earn more money.
If you have a large down payment, excellent credit score, and low DTI, then you should be able to get a low 30-year fixed rate.
Is a 30-year fixed mortgage a good fit for you?
You'll probably like a 30-year fixed mortgage if you want relatively low monthly payments.
You might prefer a shorter term if you want to be aggressive about paying off your mortgage faster, and if you can withstand higher monthly payments.
You don't necessarily need to stay in a home for 30 years to benefit from a 30-year mortgage. Even if you plan to move in a few years, you can benefit from the low monthly payments — especially since rates are at historic lows right now.
How do you find personalized 30-year fixed rates?
We're showing today's average mortgage rates, but you can find personalized rates based on your down payment amount, credit score, and DTI.
You can Google "mortgage rate calculator" to enter your information and get an idea of what rate you'd pay.
Some online lenders, such as Ally and Better.com, provide personalized rates with their own digital calculators.
If you're a little further along in the homebuying process, then you can speak with multiple lenders to receive personalized rates to compare and contrast rates before choosing a lender.
The pros and cons of 30-year fixed mortgages
The pros of a 30-year fixed-rate mortgage
- If mortgage rates increase, then you keep your low rate. Unlike an adjustable mortgage, a fixed mortgage locks in your rate for the entire life of your loan — which is especially useful right now, because rates are at all-time lows. If you chose an adjustable-rate mortgage, then your rate would almost surely increase down the road.
- Make low monthly payments. With a shorter fixed term, you pay off the mortgage in a shorter amount of time, so your monthly payments are higher. The 30-year monthly payments are relatively low, because you're spreading payments out over a longer period of time.
- Predictable payments can make it easier to plan a budget. Granted, certain payments that are wrapped up in your mortgage could change over the life of your loan, such as private mortgage insurance or property taxes. But your interest rate will stay the same from year to year, which could make it easier for you to plan out your monthly expenses overall.
The cons of a 30-year fixed-rate mortgage
- If mortgage rates decrease, then you're stuck with the higher rate. Locking in your rate for 30 years means you don't benefit should rates go down later. But because rates are so low right now, it's unlikely rates will significantly decrease in the near future. Still, it's possible rates would go down some time in the next 30 years.
- Shorter terms offer lower rates. Although 30-year rates are low right now, shorter terms charge even lower rates. You may prefer a 20-year or 15-year fixed term if you can afford higher monthly payments, because you'll land a lower rate.
- You'll pay more in interest in the long term. A higher rate isn't the only reason you'll pay more with a 30-year term than with a shorter term. Your interest has more time to accumulate, so interest payments add up over time.
What's the difference between a mortgage interest rate and APR?
When searching for rates, you'll probably see two percentages pop up: interest rate percentage and annual percentage rate (APR).
The interest rate is the rate the lender charges you for taking out a mortgage.
The APR takes the rest of your house payments into consideration, such as private mortgage insurance, homeowners insurance, and property taxes.
The APR gives you a better idea of how much you'll actually pay on your home.
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