Savings

Today’s Mortgage Rates: 15-Year Rates Offer the Biggest Opportunity for Savings

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Check out mortgage rates for June 10, 2022, which have been mixed since yesterday. (Credible)

Based on data compiled by Credible, mortgage refinance rate rose for two key terms and fell for another term since yesterday.

Rates last updated on June 10, 2022. These rates are based on the assumptions presented here. Actual rates may vary. With 5,000 reviews, Credible maintains an “excellent” Trustpilot score.

What does that mean: Rates for 30-year refinance terms fell today, while rates for two other terms rose. With longer terms holding steady above 5%, homeowners looking to refinance might consider shorter terms for greater interest savings, ahead of future increases.

Today’s Mortgage Rates for Buying a Home

Based on data compiled by Credible, mortgage rates for home purchases rose for two key terms and fell for another term since yesterday.

Rates last updated on June 10, 2022. These rates are based on the assumptions presented here. Actual rates may vary. Credible, a personal finance marketplace, has over 5,000 Trustpilot reviews with an average rating of 4.7 stars (out of a possible 5.0).

What does that mean: 30-year mortgage rates fell slightly and 20-year rates jumped today, meaning buyers may want to look to shorter terms to take advantage of the interest savings. With rates for 15-year loans a full percentage point lower than 30-year loans, borrowers who can afford higher monthly payments should shop around and consider shorter repayment terms to find their best possible rate. . But with 20-year rates rising above 30-year rates, buyers who want a longer repayment term should stick with a 30-year mortgage.

To find great mortgage rates, start by using Credible’s secure website, which can show you current mortgage rates from multiple lenders without affecting your credit score. You can also use Credible’s mortgage calculator to estimate your monthly mortgage payments.

How mortgage rates have changed over time

Current mortgage interest rates are well below the highest average annual rate recorded by Freddie Mac – 16.63% in 1981. A year before the COVID-19 pandemic upended economies around the world, the mortgage rate he average interest on a 30-year fixed rate mortgage for 2019 was 3.94%. The average rate for 2021 was 2.96%, the lowest annual average for 30 years.

The historic decline in interest rates means that homeowners with mortgages from 2019 could potentially realize significant interest savings by refinancing with one of today’s lowest interest rates. When considering a mortgage refinance or purchase, it’s important to consider closing costs such as appraisal, application, origination, and attorney’s fees. These factors, in addition to the interest rate and loan amount, all contribute to the cost of a mortgage.

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Are you looking to buy a house? Credible can help you compare current rates from multiple mortgage lenders both in minutes. Use Credible’s online tools to compare rates and get prequalified today.

Thousands of Trustpilot reviewers rate Credible as “excellent”.

How Credible Mortgage Rates Are Calculated

Changing economic conditions, central bank policy decisions, investor sentiment and other factors influence the movement of mortgage rates. Credible’s average mortgage rates and mortgage refinance rates shown in this article are calculated based on information provided by partner lenders who pay compensation to Credible.

The rates assume a borrower has a credit score of 740 and is borrowing a conventional loan for a single-family home that will be their primary residence. Rates also assume no (or very low) discount points and a 20% deposit.

The credible mortgage rates listed here will only give you an idea of ​​today’s average rates. The rate you actually receive may vary based on a number of factors.

How much can I borrow for a mortgage?

It’s essential to have an idea of ​​how much you can afford to borrow for a mortgage before you start shopping or making an offer on a home.

Generally, the 28/36 rule is a good measure of how much you can afford to borrow without restricting your finances. The rule states that your mortgage payment, including taxes and insurance, must not exceed 28% of your gross monthly income. And all of your debt, including your mortgage and other monthly expenses like car and student loan payments, shouldn’t exceed 36% of your gross monthly income.

For example, if your gross monthly income is $6,250 ($75,000 annual salary), you should be able to afford a monthly payment of $1,750. And your total monthly debt should not exceed $2,250.

As a general rule, you shouldn’t take out a mortgage that’s two to two and a half times your gross annual income. So, in the scenario above, the maximum you would need to borrow to buy a house would be $187,500.

Ultimately, lenders determine how much you can afford to borrow by considering your income, debt, assets, credit, and other financial factors.

If you’re trying to find the right mortgage rate, consider using Credible. You can use Credible’s free online tool to easily compare multiple lenders and see pre-qualified rates in just minutes.

Do you have a financial question, but you don’t know who to contact? Email the Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

As a credible authority on mortgages and personal finance, Chris Jennings has covered topics like mortgages, mortgage refinance, and more. He was a publisher and editorial assistant in the online personal finance space for four years. His work has been featured by MSN, AOL, Yahoo Finance, etc.