This week's survey shows five mortgage lenders offering rates under 7%, signaling ongoing decreases in borrowing costs.
Recent Trends in Mortgage Rates
This week marks a continued decline in mortgage rates as reported by a survey of 16 national lenders. For the fourth consecutive week, interest rates are falling, with five lenders now offering options below the 7% threshold. This shift presents an opportunity for homebuyers to secure more favorable loan terms.
Top Five Mortgage Lenders This Week
Based on our latest survey of 30-year fixed-rate conventional loans, here are the five mortgage lenders offering the most competitive rates:
- PenFed Credit Union: 6.686% APR
- Better: 6.746% APR
- Citi Mortgage: 6.750% APR
- Rate: 6.909% APR
- Chase Home Lending: 6.935% APR
The detailed survey includes 16 national lenders, displaying both their rates and associated fees.
Understanding the Rate Movements
In this week's findings, while most lenders reduced their mortgage rates, Fifth Third Bank experienced a slight increase. They opted for a lender credit instead of a discount point, complicating direct rate comparisons.
When looking for a mortgage, it's vital to focus on key considerations, including the interest rate, annual percentage rate (APR), and any applicable discount points. Notably, there was a notable 0.913% APR gap between PenFed Credit Union, the top-ranked lender, and New American Funding, which placed last.
Sample Rates and Their Variability
It's important to note that the rates presented here are typical samples obtained from lender websites, based on standardized assumptions. Individual interest rates will vary depending on factors such as credit scores and down payments, along with geographic location.
To provide a fair representation, rates were calculated using a hypothetical scenario of a $328,600 loan with a 20% down payment, sourced from extensive market data.
How to Choose the Best Mortgage Rate
Research suggests that shopping for a mortgage can lead to savings of approximately $44,000 over the terms of a 30-year loan. Hence, examining multiple lenders is crucial. Focus primarily on the APR, which encompasses both the interest rate and all lender fees, providing a clearer picture of overall borrowing costs.
Another consideration is the use of discount points. These points allow borrowers to prepay some interest upfront, potentially lowering their overall loan rate. A single point typically costs 1% of the loan amount and might reduce the interest rate by about a quarter of a percent. Always ensure you assess the total estimated cost when evaluating offers, and remember that it is possible to decline points to maintain a higher rate.
Ending Notes on Selecting Lenders
For those deciding between different lenders, try to obtain quotes without any discount points involved. This will help clarify your comparisons, providing you with an effective means of evaluating the best rates available.