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Mortgage rates by credit score

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Mortgage Rates by Credit Score in 2023

Prospective home buyers should check with multiple lenders, as rates may vary slightly between different mortgage brokers and institutions. For example, banks with a huge influx of loan applications might temporarily increase rates if their loan officers reach their processing capacity.

Average Mortgage Interest Rates: Mortgage Rates by Credit Score, Year, and Loan Type

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  • Average mortgage rates today
  • Average rate by mortgage type
  • Average rate by credit score
  • Average rate by year
  • Average rate by state
  • How are mortgage rates determined?
  • What to know before getting a mortgage
  • FAQs

Our experts answer readers’ home-buying questions and write unbiased product reviews (here’s how we assess mortgages). In some cases, we receive a commission from our partners; however, our opinions are our own.

Interest rates for the most popular 30-year fixed mortgage averaged around 7.07% in the month of September, according to Zillow data. Rates for 15-year mortgages, which are also relatively popular, were 6.35%. The average monthly mortgage payment is currently $2,823 for a 30-year fixed mortgage.

Mortgage interest rates are always changing, and there are a lot of factors that can sway your interest rate. While some of them are personal factors you have control over, and some aren’t, it’s important to know what your interest rate could look like as you start the process of getting a home loan.

Average mortgage rates today

While average mortgage and refinance rates can give you an idea of where rates are currently at, remember that they’re never a guarantee of the rate a lender will offer you. Mortgage interest rates vary by borrower, based on factors like your credit, loan type, and down payment. To get the best rate for you, you’ll want to get quotes from multiple lenders.

This information has been provided by Zillow. See more mortgage rates on Zillow Real Estate on Zillow

Average mortgage interest rate by mortgage type

First mortgage

There are several types of first mortgages available. They generally differ by the loan’s length in years, and whether the interest rate is fixed or adjustable. Two of the most popular types include:

  • 30-year mortgage rates: The most popular type of mortgage, this home loan makes for low monthly payments by spreading the amount over 30 years.
  • 15-year mortgage rates: Interest rates and payments won’t change on this type of loan, but it has higher monthly payments since payments are spread over 15 years.

Mortgage refinance

Mortgage refinance rates typically differ somewhat from purchase rates, and may be slightly higher. If you’re considering a refinance, be sure to shop around with the best mortgage refinance lenders and get multiple rate quotes to be sure you’re getting the best deal.

  • 30-year mortgage refinance rates: Refinancing into a 30-year term can lower your monthly payment since you’re spreading out what you owe over a longer period of time.
  • 15-year mortgage refinance rates: Refinancing into a shorter term like a 15-year mortgage will increase your monthly payment, but help you save on interest.

Home equity line of credit (HELOC)

HELOC rates are generally a little higher than rates on first mortgages, but they can still be worth it if you’re looking to tap into your home’s equity without having to take on a new rate on your main mortgage. As with other types of mortgages, you’ll want to shop around and get multiple rate quotes to find the best HELOC lenders.

Average mortgage interest rate by credit score

National rates aren’t the only thing that can sway your mortgage interest rates — personal information like your credit history also can affect the price you’ll pay to borrow.

See Insider’s picks for the best mortgage lenders »

Your credit score is a number calculated based on your borrowing, credit use, and repayment history, and the score you receive between 300 and 850 acts like a grade point average for how you use credit. You can check your credit score online for free. The higher your score is, the less you’ll pay to borrow money. Generally, 620 is the minimum credit score needed to buy a house, with some exceptions for government-backed loans.

Data from credit scoring company FICO shows that the lower your credit score, the more you’ll pay for credit. Here’s the average interest rate by credit level for a 30-year fixed-rate mortgage of $300,000:

According to FICO, only people with credit scores above 660 will truly see interest rates around the national average.

Average mortgage interest rate by year

Mortgage rates are constantly in flux, largely affected by what’s happening in the greater economy. Things like inflation, the bond market, overall housing market conditions, and Federal Reserve policy impact mortgage rates.

Here’s how the average mortgage interest rate has changed over time, according to data from Freddie Mac.

Year Average 30-year fixed mortgage rate (January)
2000 8.15%
2001 7.07%
2002 7.14%
2003 5.85%
2004 5.87%
2005 5.77%
2006 6.15%
2007 6.18%
2008 6.07%
2009 6.01%
2010 5.09%
2011 4.77%
2012 3.87%
2013 3.34%
2014 4.53%
2015 3.73%
2016 3.97%
2017 4.20%
2018 3.95%
2019 4.51%
2020 3.72%
2021 2.65%
2022 3.22%
2023 6.48%

Throughout 2020, the average mortgage rate fell drastically due to the economic impact of the coronavirus crisis. Rates throughout 2020 and into 2021 were lower than rates at the depths of the Great Recession. Thirty-year fixed mortgage interest rates hit a low of 2.65% in January 2021, according to Freddie Mac. Rates began to rise again in 2022.

Most major forecasts expect rates to start dropping again toward the end of 2023 and throughout the next couple of years.

Average mortgage interest rate by state

Check the latest rates in your state at the links below.

How are mortgage rates determined?

Multiple factors affect the interest rate you’ll pay on a mortgage. Some are outside of your control. Others you can influence.

For instance, the federal funds rate — the interest rate banks charge when they lend to each other — has an influence on all sorts of other interest rates, including those on mortgages. The Federal Reserve adjusts the federal funds rate as part of its effort to control inflation. Therefore, it’s a factor that is beyond your control.

Key determining factors that you do have control over include:

  1. Your credit score
  2. Debt-to-income ratio
  3. The amount of your down payment
  4. The type of mortgage you get
  5. The amount of time you take to pay off the loan

What to know before getting a mortgage

A mortgage is a type of secured loan used to purchase a home. You pay back the lender over an agreed-upon amount of time, including an additional interest payment, which you can consider the price of borrowing money. (You can also pay off your mortgage early, but there are both pros and cons to be aware of.)

Because a mortgage is a secured loan, it means you put your property up as collateral. Should you fail to make your payments over time, the lender can foreclose on, or repossess, your property. Learn more about how a mortgage works here.

Frequently asked questions about average mortgage rates

What is a mortgage rate? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

A mortgage rate, also known as a mortgage interest rate, is the fee charged by your lender for loaning you money. Your principal (payments on the amount of money you borrowed) and interest are rolled into one payment each month.

Is a 6% mortgage rate high? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

Compared to where rates were just a couple of years ago, a 6% mortgage rate is extremely high. But now, with rates in the 6% to 7% range, a 6% mortgage rate would probably be considered pretty good for most borrowers.

Are 8% mortgage rates coming? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

It’s possible that we could see 8% mortgage rates this year. Rates have been elevated recently and if they continue rising, average rates could hit 8%. In fact, if you have a lower credit score, you may already be in seeing rates in the 8% range.

When was the last time mortgage rates were at 8%? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

The last time mortgage rates were at 8% was in August 2000, when the average 30-year mortgage rate was 8.04%, according to Freddie Mac.

What credit score gets you the best mortgage rate? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

The better your credit score, the better the rate you’ll get on your mortgage. To access the best mortgage interest rates, aim to have a credit score at least in the 700s.

What is a good mortgage interest rate? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

In general, you can consider a good mortgage rate to be the average rate in your state or below. This will vary depending on your credit score — better scores tend to get better mortgage rates. Overall, a good mortgage rate will vary from person to person, depending on their financial situation.

What is a discount point? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

A discount point is a fee you can choose to pay at closing for a lower interest rate on your mortgage. One discount point usually costs 1% of your mortgage, and it reduces your rate by 0.25%. So if your rate on a $200,000 mortgage is 6.5% and you pay $4,000 for two discount points, your new interest rate is 6%.

How do I compare current mortgage rates? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

Because mortgage interest rates are so individual to the borrower, the best way to find the rates available to you is to get quotes from multiple lenders. If you’re early in the homebuying process, apply for prequalification and/or preapproval with several lenders to compare and contrast what they’re offering.

Will mortgage rates go down? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

Mortgage interest rates are expected to fall soon, but when and how much depends on the path of inflation; if price growth continues to slow, rates should fall in the coming months. If inflation remains stubborn, we may have to wait a bit longer. But that doesn’t mean you need to put off your homebuying plans — there are plenty of advantages to buying a house when rates are high, such as decreased competition.

Liz was a personal finance reporter at Insider. Before joining Insider, she wrote about financial and automotive topics as a freelancer for brands like LendingTree and Credit Karma. She earned her bachelor’s degree in writing from The Savannah College of Art and Design. She lives and works in Cincinnati, Ohio. Find her on Twitter at @lizknueven.

Laura Grace Tarpley (she/her) is a personal finance reviews senior editor at Insider. She oversees coverage about mortgage rates, refinance rates, lenders, bank accounts, investing, retirement , and borrowing and savings tips for Personal Finance Insider. She was a writer and editor for Insider’s “The Road to Home” series, which won a Silver award from the National Associate of Real Estate Editors. She is also a Certified Educator in Personal Finance (CEPF). She has written about personal finance for seven years. Before joining the Insider team, she was a freelance finance writer for companies like SoFi and The Penny Hoarder, as well as an editor at FluentU. You can reach Laura Grace at [email protected]. Learn more about how Personal Finance Insider chooses, rates, and covers financial products and services »

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Mortgage Rates by Credit Score in 2023

The current mortgage rates in the U.S. continue to remain at historically low levels, as 30-year fixed interest rates hover near 3%. The attractive rates continue motivating prospective homebuyers; however, qualifying for loans at these rates usually requires having good credit.

Mortgage Rates By Credit Score

Principal Amount FICO ® Score APR Monthly Payment Interest Paid*
$ 300,000 760 – 850 2.531 % $ 1,190 $ 128,473
$ 300,000 700 – 759 2.753 % $ 1,225 $ 141,072
$ 300,000 680 – 699 2.930 % $ 1,254 $ 151,265
$ 300,000 660 – 679 3.144 % $ 1,288 $163,763
$ 300,000 640 – 659 3.574 % $ 1,360 $ 189,440
$ 300,000 620 – 639 4.120 % $ 1,453 $ 223,108

For a fixed rate, 30-year loan. Based on the myFICO Loan Savings Calculator in July 2021
*This is the total interest that would be paid over the lifetime of the loan

Consumers seeking to finance a home purchase must recognize the critical role that interest rates have on overall mortgage affordability. Roughly 90% of borrowers choose 30-year terms; therefore, even a half of a percent change in interest rate may translate to thousands of dollars of interest expense over the life of a loan.

The interest rate should not be confused with the annual percentage rate (APR), which includes additional fees. As a borrower, the interest rate you obtain results from many factors– only some of which you can actually control.

What Credit Score Do You Need For The Best Mortgage Rate?

The best mortgage rates generally apply to those with a solid credit history that demonstrate responsible management of debt. It’s recommended that homebuyers have a credit score of at least 670.

A credit score of 760 or more is typically considered a “very good” credit score and should allow the borrower access to the lowest available rates.

Individuals that begin the home buying process are encouraged to speak with a mortgage lender for obtaining a pre-approval. A preapproval verifies your eligibility for obtaining a loan, the corresponding interest rate, and the maximum or limit that can be borrowed.

The minimum credit score required also varies among the most common types or categories of loans. These include conventional loans, FHA loans, VA loans, USDA loans, and “jumbo” loans.

Conventional Loans

The term “conventional” differentiates this type of loan from any of those backed or insured by some government agency.

Most conventional loans are fixed-rate mortgages with set interest rates and require a minimum 620 credit score. A credit score of 740 usually qualifies you for the best rates.

Keep in mind that borrowers pursuing a conventional loan will likely be required to pay private mortgage insurance (PMI) unless they make a 20% down payment.

FHA Loans

The Federal Housing Administration (FHA) incentivizes lenders to approve mortgages for those with mediocre credit, by federally insuring the loans. Although lenders may impose their own minimums, borrowers must have a score of at least 500 (preferably 580+).

Keep in mind that you’ll need a high down payment amount if you have a credit score below 580. And your interest rate will be much higher!

VA Loans

The U.S. Department of Veterans Affairs (VA) also guarantees loans as a benefit for current and former military members. Although no formally specified minimum score exists, most of those who obtain approval have at least a 640 score.

USDA Loans

The U.S. Department of Agriculture (USDA) created this program specifically for borrowers that reside in rural areas. Like VA loans, no formal minimum score exists; however, applicants with a 640 score receive “streamlined processing” and will likely be approved.

Jumbo Loans

Currently, a jumbo mortgage loan exceeds $548,250 and usually features stringent requirements for qualification. The minimum score among most lenders is 700, with a 720 typically necessary for obtaining the lowest rates.

Can I Get A Mortgage With A Low Credit Score?

As the aforementioned data indicates, borrowers with low credit scores may still qualify for a mortgage. In most cases, borrowers will pay higher interest rates, have fewer options, and must satisfy some other mortgage payment requirements.

The range that constitutes “low” is loosely considered as being between 580 and 669. Generally, potential borrowers with a score below 500 are unlikely to find any willing lenders and should work toward improving their credit.

Consumers with a score below 620 are unlikely to qualify for conventional mortgages or lower loan rates and should pursue the programs available to first-time homebuyers or those supported by governmental entities.

The Fannie Mae HomeReady and Freddie Mac Home Possible programs are viable options for buyers with low scores. FHA mortgages also represent a possibility but require a 10% down payment for scores less than 580.

If you’re looking to invest in real estate, you’ll generally need higher credit scores. The best rates are always reserved for borrowers with a 740 credit score or higher.

How Your Mortgage Rate is Set

Mortgage interest rates fluctuate in a similar way to gasoline prices in response to a host of different variables. Much of the volatility is attributed to market forces and economic indicators that clearly are beyond the control of any single person or company.

Different factors that contribute to your mortgage rate include:

  • Your individual credit score
  • Your down payment size
  • If you are self-employed vs. an employee
  • Your loan term length (15-year fixed and 30-year fixed are the most common)
  • Your loan product (adjustable rate vs. fixed)
  • Economic indicators such as inflation, the employment rate, and activity in the stock and bond markets
  • Different regions have slightly different rates
  • Lenders have slightly different rates

When unemployment rises, the Federal Reserve often lowers interest rates in hopes of stimulating the economy by encouraging investment, which often propels hiring. The Fed kept short-term interest rates near zero throughout the COVID-19 crisis.

Prospective home buyers should check with multiple lenders, as rates may vary slightly between different mortgage brokers and institutions. For example, banks with a huge influx of loan applications might temporarily increase rates if their loan officers reach their processing capacity.

According to the Consumer Financial Protection Bureau, today’s mortgage rates and expenses such as origination fees increasingly differ based on location, which further supports the idea of obtaining multiple loan estimates.

There are fixed-rate (rate locked) mortgages and adjustable-rate mortgages. Adjustable-rate mortgages have rates that change over the loan term.

The Relationship Between Credit Score and Interest Rates

Your credit score represents a critical factor in eligibility for a home loan, qualifying for favorable interest rates, and usually influences other key financial terms within a mortgage.

Consumers may obtain a free copy of their credit report each year from Experian, Equifax, and Transunion; the three major agencies that compile and report the credit histories of U.S. consumers. Some credit card companies now also furnish credit reports for their customers.

To initially establish a credit score, a consumer will typically need a credit account that has been open for several months. Often, those lacking any established credit history might apply for a secured credit card or consider a credit builder loan as a means of getting started.

Lenders use the loan applicant’s credit history as a means of assessing someone’s creditworthiness. The credit information allows the potential lender to gauge risk, based on the borrower’s likelihood of repaying the loan amounts.

The standard used by approximately 90% of mortgage lenders involves the consumer’s FICO score.

The Fair Isaac Corporation (FICO) is an organization that uses the data contained in the credit bureau report to calculate a numeric score that ranges from 300 to 850. The FICO score calculation process involves the application of an exclusive algorithm.

Lenders base their decisions regarding approving or denying a mortgage loan a relevant FICO score and the actual data within the credit reports as well.

How to Increase Your Credit Score

There are a host of ways for improving your credit score. The first step requires obtaining copies of your credit reports to identify any potential errors that may need correcting, for creating a “baseline” or starting point and setting a goal.

Clearly identify the due dates for all monthly payments as an extra reminder. Consistently making the monthly payments on time is critical in improving your credit history.

Begin by paying down credit cards and other forms of debt, which will improve your credit utilization rate or ratio. This calculation simply reflects the percentage of debt currently owed relative to your overall credit limit—strive for less than 10%.

Keep in mind that canceling old credit card accounts without a balance will potentially increase your credit utilization rate by lowering your overall credit limit.

Avoid applying for too many new types of credit accounts in a short period. When lenders make a credit inquiry this activity is noted on your credit report and may temporarily hinder your credit score.

Answers to Typical Credit Questions

How long does it take to build credit? Consumers with no credit history who establish one or more credit accounts should begin seeing progress in only a few months as the credit bureaus begin receiving this information.

Those with several existing blemishes on their credit report will typically face a greater challenge in rapidly improving their score and higher interest rates; however, satisfying any active collection accounts will help improve their score and loan options.

How can you raise your credit score 100 points? Individuals with an existing poor credit history may recognize somewhat dramatic improvements in six to twelve months by using credit and paying the debts back on (or ahead of) schedule.

Keep in mind that the majority of negative information contained within a credit report will only remain for seven years.

How to get an 800 credit score. Typically, achieving an 800 or higher credit score involves using different types of credit accounts responsibly over a period of several years.

A good credit “mix” may include an auto loan, which is classified as secured debt, and a credit card, which is generally categorized as a revolving debt account. Avoid accruing credit card debts levels near the maximum (available) limits.

One excellent solution is to check out our credit builder account plans and pricing. Our credit builder accounts enable you to obtain a secured installment loan that is directly reported to all three credit bureaus.

Other Factors to Consider

One way of accelerating the process of boosting your credit involves increasing your income. Having additional verifiable income may improve your standing with lenders and afford you the opportunity to more aggressively pay down any existing debts.

Raising your income level also represents a means of boosting your debt-to-income ratio. The calculation is simply the percentage of your total (gross) income allocated for paying debt each month, which should not exceed 30%.

Another strategy involves improving your loan-to-value (LTV) ratio, which lenders view as a key metric when assessing the risk that is best when at 80% or less. The following formula applies to calculating LTV when applying for a mortgage loan.

LTV= Mortgage Amount / Appraised Home Value

If a prospective borrower has an excessive LTV, the lender generally requires a more significant down payment to reduce the overall mortgage amount. For conventional mortgages, borrowers with an LTV of 80% or more generally must pay private mortgage insurance.

Private mortgage insurance typically ranges in price from .58 to 1.86% of the mortgage amount annually.

In Summary

Boosting your credit score is key to helping you qualify for the best mortgage rates. A high credit score can save you hundreds of thousands of dollars in interest over your lifetime!

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