Key Takeaways
- When shopping for a mortgage, it can be hard to know when to lock in. Should you hold out for a lower rate, and if so, how much lower?
- To help you decide, we’ve calculated monthly payments for various loan amounts and rates, including the impact a lower rate could have.
- A quarter-point rate reduction could lower your payment by $33 to $99 each month, assuming a 30-year loan between $200,000 to $600,000.
- With a half-point reduction, you could lower your payment by $66 to almost $200 per month.
- 30-year mortgage rates fell to a two-year low in the upper-5% range in September. But they’ve since climbed back above 6.75%. Refinance rates have also surged.
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How Much Difference Can a Lower Mortgage Rate Make?
When shopping for a home loan, it can be hard to know when to implement a rate lock. Should you go with today’s rate or hold out for something lower? And if so, how much lower?
Unfortunately, there’s no crystal ball to tell you if mortgage rates will decline anytime soon. But what we can tell you is how much of a difference you’re likely to see in your monthly payment based on different mortgage rates. You can see these various principal-and-interest payments in the table below, assuming a 30-year mortgage and some standard loan amounts.
Based on these calculations, the graph below shows how much your payment would change with a rate reduction of 0.25 or 0.50 percentage points. For instance, if you’re looking at a $400,000 loan and can lock in a rate 0.25 points lower than today, that will save you $66 per month. And if you can lock in a rate that’s a half-point lower, you can double those savings to $132 per month.
Today’s Current Mortgage Rates
Back in mid-September, happier mortgage shopping days had seemingly arrived. The 30-year new purchase average plunged to its lowest level in two years, falling as low as 5.89%. But the flagship mortgage average has marched dramatically back up in the almost six weeks since. Today’s 30-year mortgage rate average is now 6.77%—almost 90 basis points above last month’s low.
Refinance rates also shot up after a September dip that lowered the 30-year refi rate average to 6.01%. Today, the refinance average is a full percentage point higher, at 7.02%.
| National Mortgage Rate Averages – Oct. 24, 2024 | ||
|---|---|---|
| Loan Type | Purchase | Refinance |
| 30-Year Fixed | 6.77% | 7.02% |
| FHA 30-Year Fixed | 5.39% | 6.29% |
| 15-Year Fixed | 5.91% | 5.87% |
| Jumbo 30-Year Fixed | 6.80% | 6.87% |
| 5/6 ARM | 7.54% | 7.67% |
How We Track Mortgage Rates
The national and state averages cited above are provided as is via the Zillow Mortgage API, assuming a loan-to-value (LTV) ratio of 80% (i.e., a down payment of at least 20%) and an applicant credit score in the 680–739 range. The resulting rates represent what borrowers should expect when receiving quotes from lenders based on their qualifications, which may vary from advertised teaser rates. © Zillow, Inc., 2024. Use is subject to the Zillow Terms of Use.