Current mortgage interest rates vary depending on the loan term, with the 30-year fixed rate at 7.00%. Shorter loan terms generally offer lower interest rates.
Understanding the available rates is crucial when considering a home purchase or refinancing. These rates represent the cost of borrowing money for a mortgage, and they fluctuate based on various economic factors.
Current Fixed Mortgage Rates
Here is a summary of the current interest rates for various fixed-rate mortgage products:
| Product | Interest Rate | APR |
|---|---|---|
| 30-Year Fixed Rate | 7.00% | 7.05% |
| 20-Year Fixed Rate | 6.90% | 6.95% |
| 15-Year Fixed Rate | 6.27% | 6.35% |
| 10-Year Fixed Rate | 6.18% | 6.24% |
Interest Rate vs. APR
When evaluating mortgage offers, it's important to understand the difference between the interest rate and the Annual Percentage Rate (APR).
- The interest rate is the percentage of the principal loan amount charged by the lender. This is the rate used to calculate your monthly interest payments.
- The APR is a broader measure of the total cost of a loan. It includes the interest rate plus other costs such as lender fees, closing costs, discount points, and mortgage insurance premiums, amortized over the loan term. The APR provides a more complete picture of the overall cost of borrowing. A higher APR compared to the interest rate indicates higher upfront fees associated with the loan.
For example, while a 30-year fixed-rate mortgage might have an interest rate of 7.00%, its APR is slightly higher at 7.05%, reflecting additional costs involved. Comparing APRs across different lenders can help you determine the true cost-effectiveness of various loan options.
