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A Look Inside Today’s 30-Year Mortgage Rates

30-Year Mortgage Rates

If you are currently house hunting and researching which type of mortgage is right for you, you have most likely considered a 30-year fixed mortgage. A 30-year fixed mortgage rate can be an affordable option for someone looking for consistency, flexibility, and an overall lower monthly payment. As you shop lenders, you may notice that 30-year mortgage rates change daily. That’s because although these types of mortgages have historically low rates, they still fluctuate based on the economy and other factors.

If you are a well-qualified borrower, you may be wondering if a 30-year fixed mortgage is your best option.

Here are a few things to consider before locking in your rate:

What is a fixed mortgage rate?

Simply put, a fixed mortgage rate is a mortgage with a fixed interest rate. This is one of the most popular mortgage options and they are often available for all types of loans offered by lenders. The best part is, once you lock in your mortgage rate, your interest rate will stay the same for the next 30 years. For many, this provides peace of mind and flexibility. A fixed mortgage rate can be great for individuals looking to stick to a planned budget or feel more organized in their finances. 

How is a fixed mortgage rate set daily?

There are several determining economic factors that go into the fluctuation of interest rates on fixed mortgages. When the economy is doing better, rates usually start to rise and the pandemic has provided unprecedented changes in the housing market. The changes in rates are unpredictable and there is no telling if they will continue to increase or decrease. With that in mind, it’s best to shop around to ensure you are getting the best rate. We recommend taking a look at rates from several lenders daily. The more you shop, the more likely you are to lock in a rate that you are happy with. 

During the coronavirus pandemic, we saw historic lows that are now slowly increasing as the economy continues to recover. However, the increase is slow compared to the inflation rate we are currently experiencing. 

Another trend that affects the mortgage rates is the housing shortage we are currently experiencing. Lawrence Yun, Chief Economist, mentions that “America is facing a massive housing shortage due to multiple years of underproduction in relation to population growth. We estimate around 5.5 to 6.8 million additional housing units need to be built.” With this in mind, the housing shortage will also play an integral part in the rate trends and is important to keep in mind as you continue your search for the perfect home.

How Do I Know If I’m Getting a Good Fixed Mortgage Rate? 

As you start to shop mortgages, consider the APR, interest rate, and the monthly payment for your mortgage. It’s essential that all of these align with your overall budget. Since fixed mortgage rates fluctuate daily, you can also research past mortgage rates and compare them to the current one you are being offered. 

In July 2020, fixed mortgage rates fell below 3% for the first time since 1971. This sudden change in rates can help buyers save thousands in interest payments. Even though today’s fixed mortgage rates have slightly increased since 2020, you can still find a fixed mortgage rate in 2021 that fits with your budget and doesn’t break the bank. 

For example, maybe you are looking for a 30-year mortgage on 600k. If you have a credit score over 740 and 20% down, you may be able to find a mortgage rate under 3% in today’s market. Do your research, come prepared, and you can find a great fixed mortgage rate that you need to purchase the home of your dreams. 

Factors that affect your mortgage rate

Although rates fluctuate daily based on the economy, there are a lot of personal financial factors that go into determining what you qualify for. 

Here are a few things to keep in mind as you shop rates:

Credit Scores: For starters, when you start researching and shopping rates with lenders, you may notice that your credit score plays an integral role. A higher credit score can help you land the rate you are looking for and make you a well-qualified borrower.

Down Payment: Generally, lenders ask for 20% down, and having this 20% may help determine the interest rate you qualify for. However, some types of loans don’t require 20% down. It’s best to talk to your lender about your options if you don’t think you’ll have the down payment needed.

Debt to Income Ratio: We recommend paying down your credit cards, paying off your car, or looking for more ways to maintain a positive debt to income ratio before locking in your mortgage rate. 

Fixed-Rate Mortgage Pros and Cons


Lower Monthly Payments: Generally, with a 30-year fixed mortgage, you can have lower monthly payments over a 30-year timeframe than other mortgage options.

Flexible & Fixed: You never have to worry about drastic or sudden changes in your payments on your mortgage. This can be beneficial for many, especially when planning out your finances and budgeting.


Higher Interest Rate: Since fixed mortgage rates vary and change every day, you may be subject to a higher interest rate than you originally wanted.

More interest over time: Since your rate is fixed for 30 years, you will want to consider how much interest will be added in that 30-year timeframe. Also, if any drastic changes in the market appear, you may end up paying more interest over time on your home. 

Interest Rate Vs. APR

Interest rate is the cost you will pay a lender for borrowing the money for your mortgage. APR includes your interest rate, fees, and any points that may factor into your rate. For that reason, your APR is usually slightly higher than your interest rate. Both play an integral role in your mortgage rate. However, your APR is usually a more accurate representation of the overall fees you will end up paying for your mortgage. Changes in basic points play a bigger role in adjusted-rate mortgages than they do fixed. If you are interested in learning more about how basic points factor in, we recommend a percent to basis points converter.

It’s no secret that today’s 30-year fixed mortgage rate may drastically increase or decrease tomorrow. We understand that looking for a mortgage rate that aligns with your needs can be challenging. For that reason, we recommend educating yourself on your options, finding a lender that you want to work with, and locking in a rate you are comfortable with. 

Featured Image: Twenty20

About the author: A resourceful, enthusiastic and organized lead financial news writer with over seven years of experience writing news (articles, stock updates and analysis, editorials, research reports), marketing content (landing pages, press releases, mailers, investor decks, creatives), website copy, interviewing, social media and SEO strategies, website design and copy editing.

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