See how mortgage rates change over time
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There has been much talk in recent months about a declining housing market. Rising interest rates — coupled with high home prices and lower consumer confidence amid a looming recession — have prospective homeowners rethinking their next big purchase.
While these are all valid factors, consumers concerned about high interest rates may benefit from putting their interest rate in a larger context. Rates have certainly increased over the past two years since the pandemic days, but they are still relatively low by historical standards. Mortgage rates were as high as 18% in the 1980s, well above current rates.
Just take a look at this chart from the St. Louis Federal Reserve to see how mortgage rates today compare to those of the past. The chart shows the popular 30-year fixed-rate mortgage from 1971 to the present and identifies when there was also a recession, which generally correlates with interest rate spikes.
With the latest second quarter GDP or gross domestic product data pointing to a technical “recession,” it will be interesting to see how mortgage rates react. We can look at this chart over the weeks to see how prices are changing and compare it to other recessionary periods from previous years. For example, the 2008 recession saw a 30-year mortgage peak of 6.63%. The current 30-year rate is 5.30% as of this writing, but we’ll see how recession fears affect that.
While the best mortgage rate really is the lowest you can get, you can have better context for how low or high your interest rate is by looking at the St. Louis Federal Reserve chart.
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Mortgage lenders to help you get a lower rate
Much of your mortgage rate depends on personal factors, such as: B. your place of residence, your creditworthiness and the expected down payment as well as the type, term and amount of the mortgage. However, some mortgage lenders are known to help homebuyers get the lowest possible interest rate.
For example, SoFi offers a 0.25% rebate when you set a 30-year rate on a traditional loan, while another special offer gives customers up to $9,500 in cash back when they buy a home through SoFi Real Estate Buy Center operated by Homeland History. SoFi members can also get $500 off their mortgage loans.
Working with a lender that offers shorter loan terms, e.g. B. 15 year loan can also help you get a lower interest rate as these are usually based on your level of risk. Paying off your loan faster — which typically requires a higher monthly repayment installment as the term is shortened — can reward you with a lower interest rate, as your declining account balance shows you’re less at risk of defaulting on the loan.
Rocket Mortgage offers loan terms as short as eight years. Keep in mind, however, that applying for a mortgage with a low credit rating that Rocket Mortgage allows will most likely mean you’re getting an interest rate at the high end of the lender’s APR, regardless of the repayment term you choose.
Annual Percentage Rate (APR)
Apply online for personalized rates
types of loans
Conventional Loans, FHA Loans, VA Loans, and Jumbo Loans
8 – 29 years, including terms of 15 and 30 years
Typically requires a credit score of 620, but will consider applicants with a credit score of 580 as long as other eligibility criteria are met
3.5% if proceeding with an FHA loan
Editorial note: Any opinion, analysis, review, or recommendation expressed in this article is solely that of Select’s editors and has not been reviewed, approved, or otherwise endorsed by any third party.