Getting a mortgage is a big deal because it means a new house, a new start, and so much more. But it’s important to know what you’re getting into before deciding to apply for a mortgage. The average mortgage rate is easy to find, but is that really what you’ll get?
You should first know that the average mortgage rate is just that, an average. It is the middle ground between the highest and lowest rates, meaning many people get higher and lower rates. And there are very few who get that ‘average.’
Suppose you have very good credit or what is considered ‘excellent’ credit. In that case, you have a chance of getting an even better interest rate than the average. But, conversely, you could get a much lower rate, which means you’ll end up paying back a lot less than you would if you did not have such good credit.
On the other hand, if you have poor credit, you can get a much higher interest rate overall. That higher rate will cause a lot more trouble in the long run because it means you’ll end up paying a lot more than you would if you had better credit.
Another factor you need to consider is the type of mortgage you’re getting. For example, the average mortgage rate for a 15-year fixed-rate mortgage differs from that for a 30-year fixed-rate mortgage. And both of those are different from what you will find with an adjustable-rate mortgage.
Average Mortgage Rate – Adjustable or Fixed
An adjustable-rate mortgage gives you a lower interest rate to start, making it appealing to some, but the rate can then change over the life of the loan. On the other hand, a fixed-rate mortgage is just that, fixed. The rate can never change for the entire length of the loan unless you refinance.
So, when looking at the average rates for these different accounts, you’ll see numbers that may even be widely different. But, by looking at the averages for the type of account you’re thinking about getting, you’ll have a better idea of what you can expect. Especially if you also consider how your credit score stacks up to the ‘average.’
If you’re looking at the average mortgage rate and have some questions reach out to LoanDepot to find out more. You could be eligible for better rates or different loan options that will help you achieve your goal of owning a home much faster than you think.