Current Mortgage Interest Rates

What are interest rates based on?

The bond market drives mortgage rates. That’s because home loans are packaged as bundles of securities and sold in the bond market. Global and national news events steer bond prices higher and lower, and mortgage rates move similarly in response.
The daily mortgage rates are an average of the published annual percentage rate with the lowest points from a sampling of major national lenders. APR quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.

How do your credit scores affect your rate?

Your mortgage rate is all about your credit scores. Lenders call it “risk-based pricing.” Higher credit scores indicate a lower risk that you’ll default on a loan — so you get a better interest rate. The lower the credit score, the higher your interest rate.

What is an APR?

An annual percentage rate is your monthly payment interest rate, plus fees. For example, you may make a monthly mortgage payment calculated at 5% interest, but because of upfront or continuing fees, your APR might be 5.25%.

How are these interest rates calculated?

Interest rates are based on an index, or a market-based rate plus a profit margin for the lender. Published interest rates, as seen in advertising or in online rate tools, are often national rates that are not adjusted for regional variances, and they estimate a rate that would be offered to a borrower with credit scores within a certain range. Published rates almost always vary from the rate you’ll actually get on a home loan.

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