What is a good mortgage rate for 15 years?
The average 15-year fixed refinance APR is 6.83%, according to Bankrate's latest survey of the nation's largest mortgage lenders. On Wednesday, April 24, 2024, the national average 15-year fixed mortgage APR is 6.79%.
In today's market, a good mortgage interest rate can fall in the high-6% range, depending on several factors, such as the type of mortgage, loan term, and individual financial circ*mstances. To understand what a favorable mortgage rate looks like for you, get quotes from a few different lenders and compare them.
Is 4.75% a good interest rate for a mortgage? Currently, yes—4.75% is a good interest rate for a mortgage. While mortgage rates fluctuate so often—which can affect the definition of a good interest rate for a mortgage—4.75% is lower than the current average for both a 15-year fixed loan and a 30-year mortgage.
A 15-year mortgage costs less in the long run since the total interest payments are less than a 30-year mortgage. The cost of a mortgage is calculated based on an annual interest rate, and since you're borrowing the money for half as long, the total interest paid will likely be half of what you'd pay over 30 years.
| Mortgage type | Average rates | Monthly principal + interest for $200,000 loan at the average interest rate |
|---|---|---|
| 15-year fixed | 2.860% | $1,230 |
| 30-year fixed | 3.41% | $799 |
“In today's market, 6% is a great rate compared to the historic average of a little over 7%,” Rueth said. “However, 6% no longer looks good because homeowners were spoiled by 2.75% mortgage rates a few years ago.” Homeowners also feel the burden of steep home prices, making those high rates hurt even more.
Lawrence Yun, chief economist at the National Association of Realtors, even told CNBC that he doesn't think mortgage rates will reach the 3% range again in his lifetime.
What income is required for a 400k mortgage? To afford a $400,000 house, borrowers need $55,600 in cash to put 10 percent down. With a 30-year mortgage, your monthly income should be at least $8200 and your monthly payments on existing debt should not exceed $981. (This is an estimated example.)
Mortgage rates are expected to decline later this year as the U.S. economy weakens, inflation slows and the Federal Reserve cuts interest rates. The 30-year fixed mortgage rate is expected to fall to the mid- to low-6% range through the end of 2024, potentially dipping into high-5% territory by early 2025.
The Fed raised the rate 11 times between March 2022 and July 2023 to combat ongoing inflation. After its December 2023 meeting, the Federal Open Market Committee (FOMC) predicted making three quarter-point cuts by the end of 2024 to lower the federal funds rate to 4.6%.
What is the disadvantage of a 15 year mortgage?
Disadvantages of a 15-year mortgage
Monthly principal and interest payments for a 15-year fixed-rate mortgage run about 50% higher than on a 30-year home loan. You also have to pay property taxes, insurance and, if you put less than 20% down, mortgage insurance.
It will cost about 10–20% more to pay off a 30 year mortgage in 15 years than to take a 15 year mortgage and pay it off in that time. Generally, that's how much higher mortgage interest rates are on 30-year versus 15-year mortgages, about 10–20% higher.
Potentially tougher qualification requirements: Your lender will want to verify that your income can accommodate these larger payments. As such, qualifying for a 15-year loan might be harder than for a 30-year one.
Just making two extra mortgage payments a year can save you tens of thousands of dollars and cut years off your loan.
| 10-Year Mortgage Monthly Payment | 15-Year Mortgage Monthly Payment | |
|---|---|---|
| 6% Interest Rate | $2,220 | $1,688 |
| 7% Interest Rate | $2,322 | $1,798 |
| 8% Interest Rate | $2,427 | $1,911 |
For a £100k mortgage over 15 years, the monthly repayments will be higher than a longer-term mortgage because you're repaying the capital over a shorter period. At a hypothetical 5% interest rate, your monthly repayments would be about £790.
The traditional rule of thumb is that no more than 28% of your monthly gross income or 25% of your net income should go to your mortgage payment.
What were the highest mortgage rates in history? The highest mortgage rates in history were in the 1980s. Thirty-year fixed mortgage rates hit their peak at 18.63% in October 1981. This was likely due to high inflation following the OPEC embargo.
As mortgage rates hit 8%, home 'affordability is incredibly difficult,' economist says. The average 30-year fixed mortgage rate hit 8% for the first time since 2000. Homebuyers must earn $114,627 to afford a median-priced house in the U.S., according to a recent report by Redfin, a real estate firm.
The bottom line. Today's elevated mortgage rate environment isn't preferable for homebuyers, but it doesn't mean that you should refrain from acting, either. If you discover your dream home, can afford the interest rate, find an affordable house, or have an alternative to rent, it can be worth it for you now.
What is prime rate today?
The current Bank of America, N.A. prime rate is 8.50% (rate effective as of July 27, 2023).
That means the mortgage rates will likely be in the 6% to 7% range for most of the year.” Mortgage Bankers Association (MBA). MBA's baseline forecast is for the 30-year fixed-rate mortgage to end 2024 at 6.1% and reach 5.5% at the end of 2025 as Treasury rates decline and the spread narrows.
Assuming a 20 percent down payment on a 30-year fixed-rate loan at an interest rate of 7 percent, you can afford the payments on a $240,000 home, according to Bankrate's mortgage calculator.
Down Payment Amount
Putting down the standard 20% can help you avoid paying mortgage insurance and interest and could save you thousands of dollars. So you can expect to pay between $11,250 an $75,000 as a down payment on a $375,000 purchase.
Putting down this amount generally means you won't have to worry about private mortgage insurance (PMI), which eliminates one cost of home ownership. For a $400,000 home, a 20% down payment comes to $80,000. That means your loan is for $320,000.
