Average rates for 30-year, 15-year terms hold steady

Mortgage rates open the week steady as of Monday, October 21, 2024, with the average 30-year benchmark at 6.58% — some 40 basis points higher than a month ago, when the Federal Reserve lowered its interest rates by half a percentage point, its first rate cut in four years. Traders expect the Fed to lower interest rates further when it meets for its November policy session, with 94% favoring a quarter-point cut, according to the CME FedWatch tool. While the Fed doesn’t set mortgage rates, lenders keep a close eye on this Fed rate, which responds to many of the same economic factors that can influence borrowing rates on large loans like mortgages.

The current average rate for a 30-year fixed mortgage is 6.58% for purchase and 6.58% for refinance — up 1 basis point from 6.57% for purchase and no change from 6.58% for refinance opening the week last Monday. Rates on a 15-year mortgage stand at an average 5.89% for purchase and 5.93% for refinance, up 3 basis points from 5.86% for purchase and 4 basis points from 5.89% for refinance this time last week. The average purchase rate on a 30-year fixed jumbo mortgage is 6.66%.

⭐️ Must read: How much does a change in mortgage rates actually matter?

Purchase rates for Monday, October 21, 2024

Refinance rates for Monday, October 21, 2024

Source: Bankrate lender survey

Mortgage rates are determined by many factors that include inflation rates, economic conditions, housing market trends and the Federal Reserve’s target interest rate. Lenders also consider your personal credit score, the amount available for your down payment, the property you’re interested in and other terms of the loan you’re requesting, like 30-year or 15-year offers.

Because mortgage rates can fluctuate daily, it’s best to lock in a rate when you’re comfortable with the overall conditions of your mortgage or home loan.

Dig deeper

Freddie Mac weekly mortgage report: Mortgage rates continue to increase

Freddie Mac reports an average 6.44% for a 30-year fixed-rate mortgage, up 12 basis points from last week’s average 6.32%, according to its weekly Prime Mortgage Market Survey of nationwide lenders published on October 17, 2024. The fixed rate for a 15-year mortgage is 5.63%, up 22 basis points from last week’s average 5.41%. These figures are lower than a year ago, when rates averaged 7.63% for a 30-year term and 6.92% for a 15-year term.

“The 30-year fixed-rate mortgage increased for the third consecutive week, moving closer to 6.5%,” says Sam Khater, Freddie Mac’s chief economist, of the latest data. “In general, higher rates reflect the strength in the economy that is supportive of the housing market. But notably, as compared to a year ago, rates are more than one percentage point lower and potential homebuyers can stand to benefit, especially by shopping around for the best quote as rates can vary widely between mortgage lenders.”

Freddie Mac updates its Prime Mortgage Market Survey data weekly on Thursdays at noon ET.

4 top factors that affect your mortgage rate

The difference of even half a percentage point on your interest rate can save you hundreds of dollars a month and thousands of dollars over the life of your mortgage, but the mortgage rate you’re ultimately offered depends on the mortgage you’re interested in, payments you’re willing to pay up front and your overall financial health.

• Your credit score. Knowing your credit score can help you shop around for lenders you’re likely to get approval through, as well as understand the type of mortgage for your lifestyle and income. The best mortgage rates go to borrowers with good to excellent credit — typically a FICO credit score of at least 670 — though even with fair credit, you may be able to find a mortgage offering decent rates.

• Your down payment. The more money you can put down toward your home, the better it benefits your interest rate. Paying at least 20% of your home’s purchase price up front generally results in a lower interest rate — and you can avoid mortgage insurance, which increases your total cost.

• Your loan term. While the 30-year mortgage remains a popular way for Americans to purchase homes, you can find terms of 20 years, 15 years and 10 years. Shorter loan terms usually come with lower interest rates, though with higher monthly payments. Longer mortgage terms can result in smaller monthly payments, though you’ll pay higher total interest over the life of your loan.

• Interest rate type. Mortgage rates come with two basic types of rates — fixed and variable. Fixed-rate mortgages offer a consistent interest rate over the life of your loan, whereas adjustable-rate mortgages (ARMs) often start with a lower fixed rate for an agreed-on time and then adjust to a variable rate based on market conditions for the remainder of your term. Choosing between these two rates depends on your financial goals and tolerance for risk.

Dig deeper: How to get the lowest rate on your next mortgage

Mortgage rates in the news

Mortgage lenders keep a close eye on the benchmark federal funds target interest rate set by the Federal Reserve, the U.S.’s central bank. Called the Fed rate, it’s the benchmark that affects rates on deposit accounts, loans and other financial products. Typically, as the fed rate rises, so do APYs on savings products like CDs, high-yield savings accounts, money market accounts and home equity loans. Mortgage rates don’t follow the Fed rate as closely, but they do reflect the same elements the Fed evaluates when making decisions on the benchmark — especially inflation — which means as the Fed rate increases, mortgage rates also tend to rise.

After increasing the target interest rate 11 times from March 2022 to July 2023 in an effort to combat the highest inflation in four decades coming out of the pandemic, the Federal Reserve announced a highly anticipated half-point cut to its federal funds target interest rate after its September 2024 policy meeting.

September 18, 2024: Fed lowers benchmark rate for first time since March 2020

At the conclusion of its sixth rate-setting policy meeting of 2024 on September 18, 2024, the Federal Reserve announced it was lowering the federal funds target interest rate by 50 basis points to a range of 4.75% to 5.00% — the first cut since the Fed began raising rates in March 2022 — from a 23-year high of 5.25% to 5.50%.

A half-point cut isn’t typical of the Fed’s decisions, which historically call for measured quarter-point reductions, but points to an urgency in keeping the economy healthy, easing a slowdown in the labor market and averting a recession.

In its post-meeting statement, the Federal Reserve said it was lowering the target range “in light of the progress on inflation and the balance of risks,” acknowledging it’s “gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance.”

Economists estimate at least two additional rate cuts this year with an additional four cuts anticipated in 2025.

What to expect at the Fed’s November policy meeting

It’s widely expected the Federal Reserve will announce an additional cut to the federal funds rate at its next policy meeting on November 6 and November 7, 2024. The CME FedWatch Tool, which measures market expectations for Fed fund rate changes, projects an 91% chance the Fed will cut rates by a quarter percentage point to a range of 4.50% to 4.75% at its November meeting.

Economists are keeping a close eye on inflation and labor reports amid speculation as to timing of future cuts to the Fed rate. Signs of cooling inflation paved the way for September’s first rate cut in four years, with economic data indicating a continued decline from a peak of 9.1% in June 2022 to rates that have ranged from 2.5% and 4% since May 2023.

An eagerly awaited jobs report released October 4 showed much stronger job growth than projected and a drop in the unemployment rate. Employers added 254,000 new jobs to payrolls in September, more than the 150,000 expected, with the unemployment rate down to 4.1% from 4.2% in August.

The fresh employment data is good news for the economy amid positive twin inflation reports. The consumer price index released on October 10 showed inflation cooling to its lowest level since February 2021, with a 2.4% year-over-year increase in consumer prices in September, down from 2.5% year over year in August and closer to the Fed’s 2% target.

The producer price index released on October 11 reported no change in wholesale prices — or the prices manufacturers pay to producers of goods and services — in September from August, together with consumer pricing data, pointing to easing inflation that peaked two years ago and paving the way for the Fed to make another quarter-point cut in November.

At a conference in Nashville on September 30, Federal Reserve Chair Jerome Powell said “the economy is in solid shape,” and that the Federal Reserve “intend(s) to use our tools to keep it there,” making its decisions “meeting by meeting.” He added, “This is not a committee that feels like it’s in a hurry to cut rates quickly.“

The Powell-led rate-setting panel will announce a rate decision at the conclusion of its meeting on Thursday, November 7, 2024, at 2 p.m. ET.

Dig deeper: When’s the next Federal Reserve meeting? What to expect — and how it affects your finances

NAR settlement and realtor commission changes

On April 23, a judge granted preliminary approval to a $418 million antitrust settlement with the National Association of Realtors that ends customary real estate broker commissions of up to 6% of a home’s purchase price. Effective August 17, real estate agents are required to provide interested buyers with a representation agreement before touring a home. This agreement is a new step designed to introduce transparency into the buyer’s relationship with the agent, the agent’s fees and how those fees are paid. The settlement isn’t expected to affect mortgage rates, yet it paves the way for consumers to negotiate what they pay for an agent’s services, saving them money in the long run.

Frequently asked questions about mortgage rates

What are mortgage lenders?

Lenders are financial institutions that loan money to homebuyers. A lender is different from a loan servicer, which typically handles the operational tasks of your loan, like processing payments, talking directly with borrowers and sending monthly statements.

What does it mean to refinance a mortgage?

Refinancing is a process of trading in your current mortgage to another lender for lower rates and better terms than your current loan. With a refinance, the new lender pays off your old mortgage and you then pay your monthly statements from the new lender.

What is an adjustable-rate mortgage?

An adjustable-rate mortgage — commonly called an ARM — is a type of home loan with a variable rate. Unlike a fixed-rate mortgage, which locks in an interest rate and predictable payments that apply over the full loan term, an ARM starts at an initial fixed rate for a period of three years or longer, after which it adjusts to a higher rate and then further adjusts periodically over the remaining life of the loan.

For a 5/1 adjustable-rate mortgage, the first number indicates the number of years at the fixed rate — or five years — and the second number indicates the rate at which the mortgage rate readjusts after — in this case, each year or annually.

Can I negotiate my mortgage rate?

It’s not likely — lenders consider the market conditions and other financial factors when determining rates. You can, however, ask about how you can reduce costs in other ways when comparing mortgage lenders. For instance, many lenders offer lower rates in exchange for “mortgage points” — upfront fees you pay to your lender. A mortgage point could cost 1% of your mortgage amount, which means about $5,000 on a $500,000 home loan, with each point lowering your interest rate by about 0.25%, depending on your lender and loan. Learn more in our guide to getting the lowest rate on your next mortgage.

What happens to my mortgage after I die?

Your home’s mortgage is treated a little differently from your other debt, which is typically settled through your estate before any assets are passed along to your heirs. Most mortgages aren’t transferable, which means the home must be paid off in full to transfer the property title.

But that also means only those who signed on to the loan can be held liable for a mortgage. Learn more about what happens to your mortgage after death.

I already own a home. Can I borrow against my home’s equity to cover a high-dollar or unexpected cost?

Yes. If it’s cash you’re after to pay for home renovations, pay off high-interest credit card debt or cover an emergency, tapping into your home’s value is a way to unlock lower rates without refinancing — and without losing your low-rate mortgage. You typically need good to excellent credit and to have built enough equity in your home. Learn how to get equity out of your home as rates come down.

Editor’s note: Rates shown are as of Monday, October 21, 2024, at 6:15 a.m. ET. APYs and promotional rates for some products can vary by region and are subject to change.

Sources

• Mortgage Industry Insights, Bankrate. Accessed October 21, 2024.

• U.S. Economic, Housing and Mortgage Market Outlook – September 2024, Freddie Mac. Accessed September 25, 2024.

• Primary Mortgage Market Survey, Freddie Mac. Accessed October 11, 2024.

• Employment Situation Summary, U.S. Bureau of Labor and Statistics. Accessed October 7, 2024.

• 2024 Preliminary Benchmark Revision, U.S. Bureau of Labor and Statistics. Accessed August 5, 2024.

• Consumer Price Index Summary, U.S. Bureau of Labor and Statistics. Accessed October 11, 2024.

• Producer Price Index News Release summary, U.S. Bureau of Labor and Statistics. Accessed October 14, 2024.

• CME FedWatch Tool, CME Group. Accessed October 21, 2024.