30-Year Mortgage and Refinance Rates for September 15, 2020 | Rates decrease

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 3.04 percent, a decrease of 4 basis points over the last week. A month ago, the average interest rate on a 30-year loan was worse, at 3.14 percent.

At today’s interest rate, you’ll pay principal and interest of $423.76 for every $100,000 you borrow. That’s $2.17 lower than what it would have been last week.

Use Bankrate’s mortgage rate calculator to approximate your monthly payments and see how much you’ll save by adding extra payments. The tool will also help you calculate how much interest you’ll pay over the life of the loan.

30-year refinance rates

Today’s average 30-year fixed refinance rate is 3.07 percent, a decrease of 7 basis points over the past seven days. Last month on the 15th, the average rate on a 30-year mortgage was 3.39 percent.

At the current average rate, you’ll pay P&I of $425.39 for every $100,000 you borrow. Compared to last week, that’s $3.80 lower.

Pros and cons of a 30-year fixed mortgage

The 30-year mortgage is the most popular home loan, and it has a number of advantages. Among them:

  • Lower monthly payment. The 30-year mortgage offers lower, more affordable payments spread over time compared with shorter-term mortgages.
  • 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. Because you have lower payments, you can qualify for a bigger loan and a more expensive house.
  • 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 lower monthly cost can allow you to save more for retirement.

As with any financial product, the 30-year mortgage does have some negatives, 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 retirement of the loan amount.
  • Buying more 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. A mortgage rate lock 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. For risk-averse people who are looking for a mortgage, a rate-lock is a must. It’s a good idea to ask for a 45-day lock at a minimum; 60 days is even better.

    Where rates are headed

    Once a week, Bankrate asks a panel of mortgage experts where they think mortgage rates will go over the next week. See Bankrate’s Rate Trends Page 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 our latest marketplace average rates and an up to date analysis on current interest rates..

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