30-Year Interest Rates for September 18, 2020 | Rates slide

30 year mortgage blog

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30-year fixed mortgage interest rates

The average rate for a 30-year fixed-rate mortgage is 2.98 percent, a decrease of 7 basis points over the previous week. This time last month, the average rate on a 30-year loan was worse, at 3.02 percent.

At today’s average rate, you’ll pay principal and interest of $420.53 for every $100k you borrow. Compared to a week ago, that’s $3.78 lower.

View today’s daily mortgage rates article to understand how other purchase rates moved.

30-year fixed refi rates

Today’s average refinance rate for a 30-year fixed-rate mortgage is 2.93 percent, a decrease of 17 basis points over the previous seven days. A month ago, the average rate on a 30-year mortgage was 3.22 percent.

At the current average rate, you’ll pay principal and interest of about $418 for every $100,000 you borrow. Compared to last week, that’s $9.18 lower.

Pros and cons of a 30-year mortgage term

The 30-year mortgage is the most popular option for homeowners, and this type of loan has a number of advantages, including:

  • Lower monthly payment. Compared to a shorter term, such as 15 years, the 30-year mortgage offers lower, more affordable payments spread over time.
  • Stability. With a 30-year mortgage, you lock in a consistent principal and interest payment. Because of the predictability, you can plan your housing expenses for the long term. Remember: Your monthly housing payment can change if your homeowners insurance and property taxes go up or, less likely, down.
  • Buying power. With lower payments, you can qualify for a larger loan amount and a more expensive home.
  • Flexibility. Lower monthly payments can free up some of your monthly budget for other goals, like building an emergency fund, contributing to retirement or college tuition, or saving for home repairs and maintenance.
  • Strategic use of debt. Some argue that Americans focus too much on paying down their mortgages rather than adding to their retirement accounts. A 30-year fixed-rate mortgage with a smaller monthly payment can allow you to save more for retirement.

As with any financial product, the 30-year mortgage has some downsides, including:

  • More total interest paid. A 30-year term means you’ll pay more overall in interest compared with what you’d pay with a shorter-term loan.
  • Higher mortgage rates. Compared to 15-year loans, lenders charge higher interest rates for 30-year loans because they’re taking on the risk of not being repaid for a longer time span.
  • Slower equity growth. The amortization table for a 30-year mortgage reveals a harsh reality: In the early years, almost all of your payments go to interest rather than principal. A 15-year loan brings a higher monthly payment but much faster payoff of the loan amount.
  • Buying a more expensive house than you should. Just because you might be able to afford more house with a 30-year loan doesn’t mean you should stretch your budget to the breaking point. Give yourself some breathing room for other financial goals and unexpected expenses. Use Bankrate’s home affordability calculator to determine how much house you can afford.
  • Mortgage lock recommendations

    A rate lock guarantees a lender will honor a specified interest rate at a specific cost for a set period. The benefit of a mortgage rate lock is that it protects you from market fluctuations. It also puts pressure on borrowers to make sure they close on homes before the rate-lock period expires. For example, if your lender locks in your rate at 3.75 percent for 45 days and rates jump up to 4 percent within that period, you’ll still get your loan at the lesser rate.

    If they choose not to lock in your rate, you’ll have a “floating” rate. That’s not a bad strategy when interest rates are generally falling, but it could be costly in a rising rate environment. A rate lock is a must for risk-averse people who are seeking a mortgage. It’s a good idea to ask for a 45-day lock at a minimum; 60 days is even better.

    Where rates are headed

    Each week, Bankrate’s editorial team asks a panel of mortgage experts where they think mortgage rates will go over the next week. See Bankrate’s Rate Trend Index for weekly bets.

    In order to provide the latest rates, lenders across the nation respond to Bankrate’s weekday mortgage rates survey to bring you the most current rates available. Here you can see the latest marketplace average rates for an assortment of purchase and refinance loans.

    Searching for a mortgage lender? Check out reviews of top lenders.

    Read about today’s rates for a variety of loan terms:

    Shopping for the right mortgage lender?

    • First Rate Mortgage Review
    • Caliber Home Loans Mortgage Review
    • Philadelphia Mortgage Advisors Mortgage Review
    • Methodology

      The rates you see above are Bankrate.com Site Averages. These calculations are run after the close of the previous business day and include rates and/or yields we have collected that day for a specific banking product. Bankrate.com site averages tend to be volatile — they help consumers see the movement of rates day to day. The institutions included in the “Bankrate.com Site Average” tables will be different from one day to the next, depending on which institutions’ rates we gather on a particular day for presentation on the site.

      To learn more about the different rate averages Bankrate publishes, see “Understanding Bankrate’s on-site rate averages”.