A guide to current mortgage rates

Get average APRs and weekly analysis for fixed-rate mortgages and adjustable-rate mortgages

Derek Silva

Derek Silva

Published January 23, 2020

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Average mortgage rates for 30-year and 15-year fixed-rate mortgages dropped to a three-month low this week. The U.S. economy continues to do well overall, but rates are unlikely to rise much in the near future. That’s true even with big news items, like improving U.S. trade relations and President Trump’s impeachment trial.

Current average mortgage rates

Mortgage typeThis week's APRLast week's APRChange from last week
30-year fixed-rate mortgage3.60%3.65%-0.05%
15-year fixed-rate mortgage3.04%3.09%-0.05%
5/1 ARM (5-year adjustable-rate mortgage)3.28%3.39%-0.11%

Is it a good time to get a mortgage?

Now is generally a good time to get a mortgage. Average rates are the lowest they’ve been since October 2019, and they're only about a third of a percentage above than the lowest rates of the past decade (3.31% in late 2012). It’s possible rates will drop more in the future but forecasts from Freddie Mac show that mortgage rates may not change much over the next year.

Make sure to shop around for the best rate, since the exact mortgage rates a lender offers you still vary based on where you live, your financial situation, and the lender’s own financial situation. If you’re considering a mortgage refinance, check to see whether rates are lower than when you got your current mortgage. They probably are and even a few tenths of a percent can save you hundreds or thousands of dollars over the lifetime of the loan.

Try our mortgage calculator to see how much of a mortgage you can afford based on the current mortgage rates.

What’s impacting mortgage rates right now

The U.S. economy continues to perform well — at least in terms of stock market performance — and a few recent events have helped increase investor confidence. However, a strong and growing economy normally means higher mortgage rates, and that isn’t happening because a number of factors continue to hurt investor confidence.

First, the good news — the U.S. economy

There is a lot of good economic news right now. Employment growth is strong, with the U.S. adding an estimated 145,000 jobs in December and the unemployment rate staying at 3.5%, according to the latest employment data from the Bureau of Labor Statistics. That’s the lowest number of added jobs since May 2019, but it’s still strong.

The Senate also passed the United States-Mexico-Canada Agreement (USMCA) trade deal on January 16, which will replace NAFTA. Canada will be the final country to sign the USMCA deal, but the country’s lawmakers are currently on break. It’s likely that markets will rise once the deal has been passed by Canada, and mortgage rates may also increase.

Trade relations

U.S. trade relations have been encouraging lately. That’s significant (at least for investors) because uncertainty has caused a lot of market volatility in the past two years. This week, France and the U.S. may have come to an agreement that could prevent the U.S. from placing new tariffs on French goods.

On January 15, the U.S. and China signed a “phase one” trade deal. American markets rose and multiple hit record highs after it was signed. This deal was welcomed by investors, but economists remain skeptical of the “phase one” deal and how much it will improve relations between the two countries. There are still tariffs on Chinese goods and it’s unclear that either side will do everything it agreed to. It would likely take a second deal for skepticism to decrease. No “phase two” deal is expected this year.

U.S. relations with Iran have cooled for now, but that may change in the future. The U.S. has imposed economic sanctions on Iran, and relations between Iran and other countries have strained. There is also increasing uncertainty over what Iran could do in the near future. The country officially announced that it would no longer abide by the 2015 nuclear agreement after the U.S. killed Iranian General Qassem Soleimani in a drone strike. Iran increasing its nuclear output or the fear of armed conflict between the U.S. and Iran will almost certainly affect markets.

Internationally, Brexit has again become something to watch. Prime Minister Boris Johnson is pushing for the U.K. to leave the European Union by the end of January. It is likely to happen and could lead to volatility in international markets. (President Trump has also proposed tariffs on the U.K. if they won’t discuss a new trade deal.)

The facts on impeachment

The impeachment trial of President Trump has officially begun in the Senate. Mortgage rates (and markets in general) have yet to see much impact from impeachment, largely because senators appear on track to acquit Trump. Markets will likely change if it ever looks like the Senate may vote to remove President Trump from office.

After the impeachment proceedings against President Bill Clinton began, on Oct. 8, 1998, 30-year fixed-rate mortgage rates actually fell a little, from 6.60% the week of Oct. 2, 1998, to 6.49% the week of Oct. 9, 1998. After Clinton was acquitted by the Senate, on Feb. 12, 1999, mortgage rates began to skyrocket, hitting 7.11% the following month and eventually peaking at 8.64% the week of May 19, 2000, the highest of Clinton’s presidency since 1995.

How to find the best mortgage rates

A mortgage is a big financial decision, so it’s important to make the best decision you can. Here are four steps to help you find the best mortgage:

  • Get your credit score as high as you can before applying for a loan
  • Figure out what kind of mortgage you need
  • Compare mortgages from multiple lenders
  • Make as big of a down payment as you can

Maximize your credit score

Mortgage lenders use your credit score to determine what rates they will offer you. In particular, they look at your FICO score and a higher score will get you better rates. That’s why it’s important to do as much as you can to increase your credit score before you apply for any new loans.

You can’t magically increase your FICO score, but you can take concrete steps, like carrying the smallest balance you can and not opening any new credit cards before a mortgage application.

Learn more about what a good credit score is and how to get the best credit score.

Know what type of mortgage you need

There are multiple types of mortgages. Which you should get depends on your financial situation.

For example, FHA loans are backed by the government. They make it easier for low-income individuals and first-time homebuyers to get a mortgage. But a conventional mortgage loan (meaning a private instead of government loan) could save you money if you can afford to make a bigger down payment.

In certain circumstances, you may also want to consider a mortgage with an adjustable rate, instead of a traditional mortgage with a fixed rate. People who want to pay off debt more aggressively may opt for a 15-year or 20-year mortgage over the standard 30-year loan.

Learn more about the types of mortgages and which is best for you.

Compare rates from multiple lenders

Like any other purchase, you should shop around before getting a mortgage. Click your location on the map below to get started.


You found the best mortgage. Now, find the best homeowners insurance policy.

Policygenius can help you find homeowners coverage that protects your home and valuables.

Keep in mind that a mortgage rate is expressed as an annual percentage rate, or APR for short. Annual percentage rates reflect the lender’s interest rate, but they are also affected by other lender costs, such as points. (Learn more about what APR is.)

If you are a customer at a local bank or credit union, make sure to ask what kind of rates they can offer. Sometimes long-time customers receive preferential rates.

Make the right down payment

For conventional loans, the more you put as a down payment, the smaller your monthly payment and overall mortgage costs will be. This is a big deal because the longer your mortgage, the more you will have to pay in mortgage interest. Over the term of a mortgage, interest can cost nearly as much as the mortgage principal itself.

If you make a down payment of less than 20%, you will also have to pay private mortgage insurance (PMI). The closer your down payment is to 20%, the more you can save on PMI.

With that being said, very few people can afford a 20% down payment and it likely isn’t worth doing something like withdrawing from a retirement account just to reach that 20%. The key then is to make the biggest down payment you can, without overextending yourself, and without hurting other savings goals, like saving for retirement. You will no longer have to pay PMI once you have 20% home equity (the value of your home minus your remaining mortgage balance).

Also, make sure to set aside some money to pay cover closing costs and other unexpected costs of owning a home.

What influences mortgage rates

There are a number of factors that determine current mortgage rates, only some of which you can control.

In general terms, mortgage rates are lower (and better for homebuyers) when the economy is struggling or when the economic outlook is not good. That’s because investors look for safer, longer-term investments when they think the economy is on the decline. For example, they buy more 10-year Treasury notes instead of short-term notes (this is what economists are referring to when they talk about the yield curve inverting).

Investors also buy more mortgage-backed securities (MBSs) when the economy isn’t doing well. An MBS is a collection of individual mortgages, and people can trade them on the market the same way they trade bonds. Higher demand for MBSs leads to lower prices, which lead to more buying and even lower prices.

Banks and other mortgage lenders can offer lower mortgage rates to customers when investors are buying more MBSs. On the other hand, less demand for MBSs can lead to an increase in mortgage rates.

Mortgage rate factors you can control

What specific rates a lender offers you depend largely on your credit score and other details like the amount and type of the loan. These are factors you can influence (to a degree). You can take steps to improve your credit score. You can also ask for a smaller loan by choosing a house you can afford and then making the biggest down payment you can afford.

Lenders often look closely at your loan-to-value ratio (LTV ratio). This is the amount of the loan as a percentage of the home’s value. If you get a $180,000 mortgage for a $200,000 home, the mortgage (and your LTC ratio) is 90%. LTV ratios above 80% are seen as more risky and result in higher rates.

Understand your monthly mortgage payment better by looking at your mortgage amortization schedule.

Mortgage rate factors that are out of your control

General economic factors have a big impact on mortgage rates. This includes things like the strength of the job market, the inflation rate, and the state of the overall housing market. International economies and U.S. trade relations also impact mortgage rates.

With something like employment numbers, the biggest impact to mortgage rates comes when the data in government reports don’t match expectations. Regardless of whether or not the numbers are good or bad, changes in mortgage rates usually come when the numbers differ greatly from what investors predicted they would be.

The Federal Reserve also sets the interest rates for banks and other financial institutions to lend money to each other, which is called the federal funds rate. These financial institutions attach a premium to the federal rate to come up with their own lending rate: the prime rate.

Using the prime rate as a benchmark, lenders and financial institutions then offer a range of loan rates to consumers. For example, you may be able to get a rate below 4% even if the average national mortgage rate is 4.05%. At the same time, you may have to pay a higher rate.