How to compare 30-year fixed mortgage rates
If you compare loan offers from a few mortgage lenders, you’ll have a better chance of landing a competitive rate. Here’s how:
- Decide whether a 30-year mortgage rate is right for you: The 30-year term is the most popular option, but it’s far from the only one. Depending on the lender you work with, you might be able to apply for fixed-rate loans amortized over anywhere from eight to 29 years. Another option: an adjustable-rate mortgage. Weigh your needs and situation to make sure 30 years is the right term for you.
- Get preapproved: Get rate quotes from at least three mortgage lenders, ideally on the same day so you have an accurate basis for comparison. Lenders determine your interest rate based on your credit score, debt-to-income (DTI) ratio and other factors, including the size of your down payment. Putting your best foot forward with those variables will help you land the best deal.
- Compare the interest rate and APR: The interest rate and annual percentage rate (APR) reflect the cost of the loan. The interest rate and annual percentage rate (APR) reflect the cost you’ll incur for the loan. The interest rate is the cost to borrow the funds, while the APR includes the interest rate and other costs such as the origination fee and any points. When comparing rate offers, the APR is a more complete picture of the all-in cost.
- Consider the lender’s ratings and your experience: Aside from the numbers, evaluate other factors such as convenience and the lender’s responsiveness. Take a look at what other borrowers have had to say about the lender, too.
It’s important to shop around for a mortgage to make sure you’re getting the best deal. Bankrate’s mortgage amortization calculator shows how even a 0.1 percent difference on your rate can translate to thousands of dollars you could pay over the life of the loan.
Some lenders still cater to borrowers that don’t meet these criteria, offering competitive rates even if your credit or finances aren’t up to par. That’s another reason why it pays to shop around.
Comparing mortgage rates can also pay off especially in a volatile economic climate. With rates higher than they were in recent years and constantly changing, it’s often helpful to understand overall rate trends before locking in your own. You can learn more about mortgage lenders and their various options on Bankrate’s lender review hub.
