Mortgage rate news this week - Nov. 7, 2024

Mortgage rates reach 7% for the first time since summer

Mortgage rates rose again this week, climbing up to an average of 7 percent on 30-year fixed loans, according to Bankrate's latest lender survey.

The Federal Reserve again cut its benchmark interest rate this week, but that might not necessarily bode the same for mortgage rates, which have increased in recent weeks.

One key driver: President-elect Donald Trump's victory, along with a Republican takeover of the U.S. Senate. Given the outcome, economists now expect tax cuts, which could add trillions of dollars to the federal deficit. That, in turn, could continue to push up yields on 10-year Treasury bonds — the benchmark for fixed mortgage rates.

"Bond yields are making another leg up, and mortgage rates will too," says Greg McBride, CFA, chief financial analyst for Bankrate. 

Learn more: Weekly mortgage rate trend predictions

How to compare mortgage rates

Getting the best possible rate on your mortgage can make a big difference in your monthly budget — not to mention potentially thousands saved in interest over the life of the loan. You won't know what rates you qualify for, though, unless you narrow down the best type of mortgage for your situation and comparison-shop. Here's how to do it:

• Decide on the right type of mortgage. 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. Our mortgage calculator can help you estimate your monthly mortgage payment in various scenarios.
• Shop around. Mortgage rates change often and vary widely by lender, loan type and term. When comparing lenders, pay attention to the APR, not just the interest rate. The APR, or annual percentage rate, reflects the total cost of the loan, including the interest rate and other fees.
• See what others have to say. Check out our mortgage lender reviews and other testimonials to uncover the lenders with attractive rates and top-notch customer experience. 

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 does the Federal Reserve affect mortgage rates?

Like any other financial product, the cost of a mortgage fluctuates with the happenings of the economy, including Federal Reserve decisions. The central bank doesn't set specific mortgage rates, but its policies set the tone for what banks and other lenders charge for loans.

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