What is a 30-year fixed-rate mortgage?
A 30-year fixed-rate mortgage is a home loan with a fixed interest rate over a 30-year term. Monthly payments of principal and interest remain stable during the life of the loan. With a fixed-rate mortgage, you can count on predictable payments, excluding property taxes, insurance premiums, and hoa fees.
30-year mortgage rate trends
Whether you are buying a home or refinancing a current 30-year fixed-rate mortgage, it’s important to know how interest rates are trending. This will help you secure the best possible deal. For today’s 30-year mortgage rates, contact us here. We’ll connect you with the most favorable offers.
| Date Range | Interest Rate |
|---|---|
| April 25, 2019 | 4.20% |
| April 18, 2019 | 4.17% |
| April 11, 2019 | 4.12% |
| April 4, 2019 | 4.08% |
| March 28, 2019 | 4.06% |
| March 21, 2019 | 4.28% |
| March 14, 2019 | 4.31% |
| March 7, 2019 | 4.41% |
| Feb. 28, 2019 | 4.35% |
| Feb. 21, 2019 | 4.35% |
| Feb. 14, 2019 | 4.37% |
| Feb. 7, 2019 | 4.41% |
| Jan. 31, 2019 | 4.46% |
| Jan. 24, 2019 | 4.45% |
| Jan. 17, 2019 | 4.45% |
| Jan. 10, 2019 | 4.45% |
| Jan. 3, 2019 | 4.51% |
| Dec. 27, 2018 | 4.55% |
| Dec. 20, 2018 | 4.62% |
| Dec. 13, 2018 | 4.63% |
| Dec. 6, 2018 | 4.75% |
| Nov. 29, 2018 | 4.81% |
| Nov. 21, 2018 | 4.81% |
| Nov. 15, 2018 | 4.94% |
| Nov. 8, 2018 | 4.94% |
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Click Here to ApplyWhat are the advantages of a 30-year fixed rate loan?
A 30-year fixed-rate mortgage is the most popular type of home loan. It offers several benefits that make it the default option when securing financing for the purchase of a home.
One of the defining features of a 30-year fixed-rate mortgage is its fixed interest rate. For this reason, it’s paramount to secure your loan when interest rates are low. You’ll enjoy low monthly payments over the life of the loan.
A fixed-rate loan is fully amortizing, meaning principal and interest payments fully satisfy the loan terms after a set number of years. As long as you keep up with your payments, the loan is paid in full after 30 years.
Say for example, you want to purchase a $350,000 home. You have enough saved to put down 15%, or $52,500, so your loan amount is $297,500. At 5% interest, your monthly payment comes out to $1,597. However, when you put down less than 20%, you’ll need private mortgage insurance(PMI), which increases your monthly payment.
A 30-year fixed-rate mortgage may be a good option for financing your home purchase. If you intend to stay in the house for the long-term, and want to keep your payments predictable, the 30-year loan is ideal. It is a safe choice with many benefits.
What are the drawbacks of a 30-year fixed-rate mortgage?
The most obvious drawback a 30-year fixed-rate loan is the amount of interest you pay in the long run. Mortgage rates are usually higher for 30-year loans than 15-year loans. Even though monthly payments are lower, you pay more in the end compared to someone with a more short-term loan like a 15-year fixed.
30-Year Fixed Rate Loan | Quick Facts
- Fixed principal and interest payments
- Low monthly payments compared to shorter-term loans
- Most common type of home loan
- Fully amortizing loan
- Good option if you intend to stay in home for long-term
Interest rate comparison | 30-year fixed-rate vs. 15-year fixed-rate
Compare interest rate payments for a 30-year fixed term loan vs. a 15-year fixed-term loan using the table below. Even after only 5 years, you’ve already paid more in interest with a 30-year fixed-rate loan.
| 15-Year Fixed-Rate | 30-Year Fixed-Rate | |
|---|---|---|
| Mortgage Value | $250,000 | $250,000 |
| Interest Rate | 4.5% | 5% |
| Monthly Payment | $1,912 | $1,342 |
| Interest Paid Over 5 Years | $31,416 | $38,857 |
| Total Interest | $94,247 | $233,139 |
Even though your monthly payments are $570 lower with a 30-year loan, you pay an additional $138,892 in interest over the life of the loan.
This is only taking principal and interest payments into account. There are also property taxes, insurance, HOA fees, and other expenses to consider.
In sum, the mortgage you qualify for depends on various critical factors including down payment amount, credit history, income, work history, and more.