What is a good mortgage rate today?
A good mortgage rate differs for every individual based on their capacity of repayment. However, a better rate is always a lower mortgage rate. So, to get the right picture of the mortgage rates, one must take the quote from different lenders and compare them. This will give you the right picture of your eligibility and you can pick up the cheapest lender with all other factors suitable for you. In today’s market, a good rate could be 6% for one borrower and 8% for another on the same day.
Mortgage rates are ever changing and can change within a day. It might just take a day for a good mortgage rate to change to a lesser affordable rate. The monetary policy pursued by the Federal Reserve Bank is one of the most important factors influencing both the economy generally and interest rates specifically, including mortgage rates. The Federal Reserve does not set the specific interest rates in the mortgage market. However, its actions in establishing the Fed Funds rate and adjusting the money supply upward or downward have a significant impact on the interest rates available to the borrowing public.
According to Freddie Mac’s weekly survey on 2nd Feb. 2023, the average 30-year fixed rate was 6.09% and 15-Year fixed rate was at 5.14%. It also mentions that the reduction of one percentage point in rate from the earlier peak of 7% in November 2022 can actually allow as many as three million more mortgage-ready consumers to qualify and afford a $400,000 loan, which is the median home price.
A good mortgage rate is different for individual. The advertised rates are targeted at prime borrowers with good financials, with high credit scores & few debts. There are many variables affecting your interest rate.
An attractive rate for one borrower may be way too high for another and also their individual financial standing will decide their best rates. And all lenders weigh these factors differently.
Ideally, you look for a mortgage lender that is used to dealing with people who are financially similar to you. And the best way to find your ideal lender is by comparing loan offers. Speaking with three different lenders will likely get you three different rates and sets of fees. Compare and choose the best rate.
However, in current scenario a good mortgage rate for a 15-year fixed loan generally start in the 5% range, while for a 30-year mortgage typically start in the 6% range. As told earlier your credit score, debts, down payment and financial stability will decide your rate, since lenders will assess all these to offer you a loan.