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Mortgage rate news this week - Aug. 23, 2024

Mortgage rates up slightly this week to 6.62%

Mortgage rates remained under 7% this week, averaging 6.62% for a 30-year loan, according to Bankrate's lender survey.

Thirty-year mortgage rates haven't been this low since May 2023. Rates began falling in July on promising inflation news, then dropped to the 6s in August after a blip of market volatility. Some homeowners refinanced in the flurry, but many more remain locked into mortgages obtained during the pandemic, when rates were at 3%. For those borrowers, rates would need to come down significantly for refinancing to save money.

Prospective homebuyers are also waiting it out. In a June Bankrate survey, 47% of homeowners said they'd need rates under 5% to feel comfortable buying a home this year.

Despite lower mortgage rates, home sales activity came in 2.5% lower in July compared to last year. Still, with the Federal Reserve widely expected to issue multiple rate cuts starting in September, there's room for rates to fall further and sales to pick back up.

Learn more: Weekly mortgage rate trend predictions

Current mortgage and refinance interest rates

How to get the best mortgage rate

Getting the best possible rate on your mortgage can mean a difference of hundreds of extra dollars in or out of your budget each month — not to mention thousands saved in interest over the life of the loan. You won't know what rates you qualify for, though, unless you comparison-shop. And you also need to narrow down the best type of mortgage for your situation. Here's how to do it:

1. Determine what type of mortgage is right for you. Consider your credit score and down payment, how long you plan to stay in the home, how much you can afford in monthly payments and whether you have the risk tolerance for a variable-rate loan versus a fixed-rate loan.
2. Compare mortgage rates. There's only one way to be sure you're getting the best available rate, and that's to shop at least three lenders, including large banks, credit unions and online lenders. Bankrate's mortgage lender reviews can get you started. Bankrate offers a mortgage rates comparison tool to help you find the right rate from a variety of lenders. Keep in mind: Mortgage rates change daily, even hourly, based on market conditions, and vary by loan type and term.
3. Choose the best mortgage offer for you. Bankrate's mortgage calculator can help you estimate your monthly mortgage payment, which can be useful as you consider your budget. Look at the APR, not just the interest rate. The APR is the total cost of the loan, including the interest rate and other fees. These fees are part of your closing costs.

Factors that determine your mortgage rate

Your mortgage rate depends on a number of factors, including your individual credit profile and what's happening in the broader economy. These variables include:

• Your credit and finances: The better your credit score, the better interest rate you'll get. The same goes for the size of your down payment and the amount of debt you carry: Generally, if you have more money to put down, you'll get a lower rate. If you have additional debt, your rate might be higher.
• Loan amount: The size of your loan can impact your rate.
• Loan structure: Your rate varies whether you're obtaining a fixed-rate or adjustable-rate loan. It also depends on the length of the loan (for example, 30 years or 15 years).
• Location of the property: Rates vary depending on where you're buying.
• Whether you're a first-time homebuyer: Many first-time homebuyer loan programs include a lower-rate mortgage.
• Economic factors: Broadly, mortgage rates are impacted by forces like the Federal Reserve, inflation and investor appetite.
• The lender you work with: Lenders set rates based on many factors, including their own supply and demand.
• Mortgage points. Mortgage points, also referred to as discount points, help homebuyers reduce their interest rate and monthly mortgage payments. Each point typically lowers an interest rate by 0.25 percentage points. For example, one point would lower a mortgage rate of 6 percent to 5.75 percent. The cost of a point is typically 1 percent of the total amount borrowed. For more details, see Bankrate's guide to mortgage points.
• The size of your down payment. If you put down less than 20 percent of the purchase amount, you may pay a higher rate.

How to refinance your current mortgage

Next steps to getting a mortgage

Before you start applying for a mortgage, here are some mortgage resources to prepare you for the process:

• How to improve your credit score to get a mortgage 
• How to save for a down payment 
• How to choose a mortgage lender: 
• Questions to expect from a mortgage lender 

Meet our Bankrate experts

Written by: Jeff Ostrowski, Principal Reporter, Mortgages

I cover mortgages and the housing market. Before joining Bankrate in 2020, I spent more than 20 years writing about real estate and the economy for the Palm Beach Post and the South Florida Business Journal. I've had a front-row seat for two housing booms and a housing bust. I've twice won gold awards from the National Association of Real Estate Editors, and since 2017 I've served on the nonprofit's board of directors.

Read more from Jeff Ostrowski

Edited by: Suzanne De Vita, Senior Editor, Home Lending

I've covered the housing market, mortgages and real estate for the past 12 years. At Bankrate, my areas of focus include first-time homebuyers and mortgage rate trends, and I'm especially interested in the housing needs of baby boomers. In the past, I've reported on market indicators like home sales and supply, as well as the real estate brokerage business. My work has been recognized by the National Association of Real Estate Editors.

Read more from Suzanne De Vita

Reviewed by: Greg McBride, CFA, Chief Financial Analyst, Bankrate

Greg McBride is a CFA charterholder with more than a quarter-century of experience in personal finance, including consumer lending prior to coming to Bankrate. Through Bankrate.com's Money Makeover series, he helped consumers plan for retirement, manage debt and develop appropriate investment allocations. He is an accomplished public speaker, has served as a Wall Street Journal Expert Panelist and served on boards in the credit counseling industry for more than a decade and the funding board of the Rose Foundation's Consumer Financial Education Fund.

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