Mortgage rates are high, but you can still get a good deal on a loan.

Rates on 30-year mortgages can change with the market, but this repayment term remains the most popular choice for borrowers. Nearly 90% of borrowers opt for a 30-year, fixed-rate mortgage over other loan terms, according to Freddie Mac.

This isn’t too surprising because monthly payments for 30-year terms tend to be more affordable.

If you’re thinking about getting a 30-year loan, it’s important to consider the pros, cons, and current mortgage rate trends. It’s also wise to compare loan offers from several lenders to ensure you get the best rate.

Compare today’s 30-year mortgage rates

Mortgage rate predictions

Experts don’t expect 30-year mortgage rates to increase beyond the normal weekly deviations. In fact, chances are good that rates will drop slightly before the end of the year. 

Freddie Mac noted in its June U.S. Economic, Housing, and Mortgage Market Outlook that rates have fallen slightly from spring high. But, it said, “given persistent inflation, achieving rates below 6.5% is challenging.”

Other forecasters seem to agree.

Fannie Mae issued its most recent Housing Forecast on June 10. Based on rates from May 31, it expects average mortgage interest rates to have reached 7% for the second quarter of 2024. After that, it forecasts a drop to 6.8% for the third quarter and 6.7% by the end of the year.

The Mortgage Bankers Association also expected a 7% average rate for the second quarter. In its MBA Mortgage Finance Forecast for June 24, the group predicted that the average will fall to 6.8% in the third quarter and 6.6% by the end of the year. 

The National Association of Realtors’ Economic and Housing Market Outlook for June is consistent with the MBA and Fannie Mae forecasts. It expects 30-year fixed rates to have averaged 7.1% in the second quarter, falling to 6.9% in the third quarter and 6.7% by the end of the year.

It’s important to note that these forecasts change each month because the factors that inform the experts’ forecasts change quickly and often.

Historical trends in 30-year mortgage rates

Thirty-year mortgage rates have risen and fallen according to a number of broader economic forces in addition to the housing market.The following timeline helps to illustrate how the various factors come together to create mortgage rate trends.

1990 to 1999

The 1990s began with a minor recession accompanied by modest inflation and unemployment. In an effort to kickstart the economy, the Federal Reserve reduced federal funds interest rates. The rate reduction eventually eased inflation and promoted strong economic growth.

Thirty-year mortgage rates climbed from 9.83% in January 1990 to 10.67% in May, and then gradually dropped to 7.96% by December 1999, according to Freddie Mac data. 

2000 to 2009

 The period from 2000 from 2009 was an eventful one in the U.S., starting with the dot-com bubble bursting, followed by the September 11 terror attacks, both of which had significant economic impacts. From 2001 to 2003, the Federal Reserve slashed the federal funds rate from 6% to 1% to keep the economy moving.

Mortgage rates fell from 8.15% in January 2000 to 5.81% in December 2003.

The federal funds rate gradually increased over the next several years, until 2007. Mortgage rates did, too, from 5.87% in January 2004 to 6.74% in June 2007, ending 2007 at 6.17%.

Another bubble burst in 2008 — the housing bubble, taking the economy down with it and triggering the Great Recession. The Fed slashed its federal rate seven times in 2008, from 3.50% in January to 0.00%-0.25% in December.

Thirty-year mortgage rates fell from 6.07% in January 2008 to 5.05% in December 2008. 

2010 to 2019

The federal funds rate was as low as it could go — 0%, for all practical purposes, where it remained until 2015. To keep up demand for home purchases and mortgage loans, lenders continued reducing mortgage rates. The average rate for a 30-year mortgage reached a low of 3.31% in November 2012.

By that time, the U.S. had largely recovered from the recession. Mortgage rates spiked in 2013, when bond yields dropped because of the Fed’s decision to scale back on its bond purchases (bond yields and interest rates typically move in opposite directions). But mortgage rates were fairly steady from 2014 to 2018, remaining under 5%, before dropping again to 3.73% by December 2019. 

2020 to 2024

The COVID-19 pandemic hit the U.S. in 2020, bringing the economy to a grinding halt. The Fed had begun reducing the federal funds rate in August 2019. In four reductions from September 2019 to March 2022, it lowered the rate from 1.50%-1.75 back to 0-0.25% to keep the economy moving. The federal rate sat at 0%, for all practical purposes, until March 2022.

In 2022, the Fed began increasing rates again to tame rampant inflation caused by a number of factors related to the pandemic. The Fed has increased the rate 11 times since March 2022, most recently in July 2023. The rate currently sits at 5.25%-5.50%.

Mortgage rates hit a low of 2.67% in December 2020, and they hovered around 3% until a combination of the federal rate hikes and a tight housing market, where demand far outpaced supply, drove them up again. The average rate peaked at 7.76% in November 2023 and sits at 6.86% as of June 27.

Pros and cons of 30-year rates 

Thirty-year mortgages are the most popular type of home loan, and the vast majority of those are fixed-rate loans. 

One benefit of a 30-year fixed-rate loan is that your payments are lower because you pay the principal over a longer period of time. 

In addition, the principal and interest portion of your payment never changes, which makes your payments easier to work into your budget.

Of course, 30-year rates have some downsides as well. The primary one is that you’ll pay more interest compared to a shorter-term loan because you have the bank’s money longer and the lender charges higher rates on longer loans.

The other drawback is that you’ll be slow to build equity with a 30-year loan. If home values drop below the amount you owe on your loan, you won’t be able to sell your home unless you can make up the difference with cash.

Here’s a look at the pros and cons of 30-year mortgages.

What factors influence 30-year mortgage rates? 

As you can tell from the historical mortgage rates, many factors come into play.

The housing market is a major one, and it’s having a significant impact on current rates. High demand and low inventory are helping to keep rates high.

The economy, and the Fed’s policies to keep the economy stable, also have an effect. Lenders typically increase mortgage rates when the federal funds rate increases, and they lower mortgage rates when the federal funds rate goes down.

30-year vs. 15-year rates 

Fifteen-year mortgages are less common than 30-year loans, but they can be a better choice.

Paying your mortgage loan off in half the time saves you a lot of money on interest. 

First, shorter loan terms are less risky to lenders. Lower risk for the lender means lower interest rates for you.

In addition, interest has less time to accrue, which makes a 15-year mortgage rate a win-win when it comes to loan costs. 

You also get the benefit of being out from under a major debt at a younger age, which could make other goals, such as early retirement, more realistic.

Those benefits do come at a cost. Your mortgage payments will be higher, which could make it harder to save for other goals, such as retirement. It’s a good idea to weigh interest savings against opportunity costs — namely, compound gains — of scaling back retirement savings to accommodate higher mortgage payments.

Here’s an at-a-glance comparison of 15-year and 30-year loans.

How to get the best rate

First and foremost, you’ll need to shop around to find the best mortgage rates. Be sure to compare fees and points in addition mortgage rates to find the best deal overall. 

The following tips will help you qualify for the lowest rate your lender offers:

• Increase your credit score. You can get a conventional loan with a score as low as 620, but a 760 will get you the best rate.
• Pay off debt. Lenders give borrowers with low debt-to-income ratios better rates.
• Make a larger down payment. Having more of your own money invested could save you money on interest
• Opt for a 15-year or 20-year mortgage. You’ll get a better rate and pay less interest over time.
• Buy discount points. Points are prepaid interest that reduce your rate.

30-year mortgage rates FAQ 

Are 30-year mortgage rates dropping?

• Yes. 30-year mortgage rates have dropped from their recent high of 7.796% in October 2023. Experts expect them to fall more by the end of the year and into 2025.

Will mortgage rates ever be 3% again?

• Three-percent rates have been anomalies triggered by catastrophic blows to the economy. Short of another emergency of the magnitude of the Great Recession or pandemic, a return to 3% rates is unlikely.

What is the lowest mortgage rate in history?

• The lowest mortgage rate on record since 1971, when Freddie Mac’s rate archive began, was 2.65%, on Jan. 7, 2021. That average is for fixed mortgage rates. The lowest adjustable rate was 2.10%, on Aug. 5, 2021.