What is a realistic mortgage rate right now?

The 30-year fixed-rate mortgage averaged 5.15% APR, 30 basis points lower than the previous week's average. It was the biggest weekly drop in the NerdWallet survey since the early days of the pandemic. Treasury yields, rising inflation, and Federal Reserve monetary policy indirectly influence rates. These average rates are intended to give you an overview of general market trends and may not reflect the specific rates available to you.

It's only a fraction of a percentage point higher than the lowest mortgage rate recorded in the history of a 30-year fixed-rate loan. If the lender doesn't process the loan before the rate lock expires, you'll need to negotiate a lock extension or accept the current market rate at that time. Some loan products, such as USDA loans, offer lower rates than conventional mortgage options for eligible borrowers. Adjustable mortgage rates are set for a limited time, perhaps 3 to 10 years, and then usually reset every year after the introductory period.

If you don't set your rate, rising interest rates could force you to make a higher down payment or pay points on your closing agreement to lower interest rate costs. Finding the best mortgage rate is a matter of knowing your goals and choosing the right tool to do the job. Typically, you can only lower your mortgage rate if it drops by a certain percentage, and there are likely to be charges associated with this option. When comparing mortgage offers, be sure to ask if the interest rate includes discount points.

Only adjustable-rate mortgages are directly linked to market indices and, therefore, to the Fed benchmark rate. Mortgages with longer terms have lower monthly payments, but you'll usually pay a higher interest rate. As inflation increases, the Fed reacts by applying a more aggressive monetary policy, which invariably leads to higher mortgage rates. However, to get the most accurate quote, you can turn to a mortgage broker or apply for a mortgage through several lenders.

If you want a fixed interest rate over the life of the loan and more stable monthly payments, then a fixed-rate mortgage is ideal. The mortgage rate offered to you by a lender is determined by a combination of factors that are specific to you and forces majors that are beyond your control.

Ronda Huskin
Ronda Huskin

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