National averages
National averages are a good guide to where rates are and which way they are moving. They aren’t necessarily the rate you’ll receive, which depends on your credit, down payment, property and loan. Each source measures something different:
National averages from Mortgage News Daily’s index, updated each weekday, and Freddie Mac’s weekly survey (shown on wider screens). For Mortgage News Daily, “Previous” is the prior business day, so the change is the day’s move. For Freddie Mac, the table’s “Previous” is not last week’s survey; for the week’s change, see Freddie Mac’s survey page. They are averages for a top-tier borrower, not my rates or an offer of credit.
- Freddie Mac’s weekly survey: 30- and 15-year fixed rates from applications submitted to Freddie Mac, published on Thursdays. It no longer reports points or fees, because lenders don’t always supply them.
- Mortgage News Daily’s daily index: lenders’ rate offers each weekday for a top-tier borrower (around a 780 score with 25% down), adjusted for points, across fixed, jumbo, FHA, VA and ARM loans.
How I show rates
When this site shows a rate, it is an indicative range for qualified borrowers, not a quote or a commitment to lend. Your own rate needs your details, and it is only fixed once it is locked.
Read the fine print on any advertised rate
A rate on a website is only useful if it is close to what you would actually be offered. Here is how to read anyone else’s.
A low headline rate is often real but narrow: it is for a borrower and a loan that may not be you, or it is bought with an upfront cost. The details are in the disclosure, usually in small print near the rate. Check for these:
- Discount points. The rate assumes you pay points at closing, often one or more, where one point is 1% of the loan. A rate with points is not comparable with one without.
- A best-case borrower. A credit score of 780 or more, 25% or more down, a single-family home you will live in and a mid-size loan. Lower scores, less down, condos, investment property and larger or smaller loans all price higher.
- A short rate lock. Quotes often assume a 15- or 30-day lock; a purchase that needs 45 or 60 days costs more.
- Fees left out. Origination, underwriting and processing fees do not change the rate but do change the cost. The APR is where they show up.
- A temporary buydown. A first-year rate from a 2-1 or 1-0 buydown, which steps up after one or two years.
- A shorter term than you want. A 15- or 10-year loan, or a short-term loan of a few years, usually carries a lower rate than a 30-year fixed, but a much higher payment, or a balance due when the term ends. Check the advertised rate is for the term you are comparing.
- An adjustable rate next to fixed rates. An ARM’s start rate is lower because it is fixed for only part of the loan.
- Conditions and dates. Discounts that need autopay or an account at the lender, or a rate shown “as of” a date that has passed.
- Lead marketplaces. Some rate sites pass your details to several lenders when you ask for a quote; the rate shown may come from a lender that would not approve your loan.
How to compare offers
- Compare the APR, not just the rate. The APR folds points and most lender fees into one yearly figure, so two offers with different costs can be compared.
- Get Loan Estimates. Every lender must give you the same three-page form within three business days of applying for a home loan. On page 2, section A lists points and lender fees; page 3 shows the APR and what you would pay in the first five years.
- Compare on the same day, for the same loan. Rates move daily. Ask each lender for the same loan amount, program, lock period and points.
- Decide on points deliberately. Points pay off only if you keep the loan long enough; the mortgage points calculator shows the break-even month.
What sets the rate you are offered
- Your credit score and the down payment or equity (the loan-to-value ratio).
- The loan type: conventional, FHA, VA, USDA, jumbo or non-QM, and fixed or adjustable.
- The property and how you will use it: a home you live in, a second home or an investment property, a single-family home, a condo or two to four units.
- The loan amount, the lock period and how many points you pay.
- For investor loans, the rental coverage (DSCR), the prepayment penalty and the loan-to-value.
- The market that day: lenders reprice as mortgage bond prices move, sometimes more than once a day.
Questions
Why is my rate higher than the one I saw online?
Usually because the advertised rate assumed points, a higher credit score, more down, a different property, a shorter loan term or a shorter lock, or it left out fees. Ask for the APR and a Loan Estimate for your own scenario and compare those.
What is the difference between the interest rate and the APR?
The interest rate sets your payment. The APR adds points and most lender fees and spreads them over the loan as a yearly rate, so it is the better number for comparing offers with different costs.
Is a rate quote a promise?
No. A quote is an estimate for the details given. The rate is only fixed once it is locked, and the loan still has to be approved.
Are investment property rates different?
Yes. Loans on rentals, including DSCR loans, price higher than loans on a home you live in, and they also depend on the rental coverage, the prepayment penalty and the loan-to-value.
