Finance

Today’s 15-year mortgage rates drop while 30-year mortgage rates stay the same | April 30, 2024

Published

11 months ago

April 30, 2024

Our goal here at Credible Operations, Inc., NMLS Number 1681276, referred to as “Credible” below, is to give you the tools and confidence you need to improve your finances. Although we do promote products from our partner lenders who compensate us for our services, all opinions are our own.

Mortgage rates fluctuate almost daily based on economic conditions. Here are today’s mortgage rates and what you need to know about getting the best rate. (iStock)

The interest rate on a 30-year fixed-rate mortgage is 7.500% as of April 30, which is unchanged from yesterday. Additionally, the interest rate on a 15-year fixed-rate mortgage is 6.500%, which is 0.125 percentage points lower than yesterday.

With mortgage rates changing daily, it’s a good idea to check today’s rate before applying for a loan. It’s also important to compare different lenders’ current interest rates, terms, and fees to ensure you get the best deal.

Rates last updated on April 30, 2024. Rates are based on the assumptions shown here. Actual rates may vary. Credible, a personal finance marketplace, has 5,000 Trustpilot reviews with an average star rating of 4.7 (out of a possible 5.0).

How do mortgage rates work?

When you take out a mortgage loan to purchase a home, you’re borrowing money from a lender. In order for that lender to make a profit and reduce risk to itself, it will charge interest on the principal — that is, the amount you borrowed.

Expressed as a percentage, a mortgage interest rate is essentially the cost of borrowing money. It can vary based on several factors, such as your credit score, debt-to-income ratio (DTI), down payment, loan amount, and repayment term.

After getting a mortgage, you’ll typically receive an amortization schedule, which shows your payment schedule over the life of the loan. It also indicates how much of each payment goes toward the principal balance versus the interest.

Near the beginning of the loan term, you’ll spend more money on interest and less on the principal balance. As you approach the end of the repayment term, you’ll pay more toward the principal and less toward interest.

Your mortgage interest rate can be either fixed or adjustable. With a fixed-rate mortgage, the rate will be consistent for the duration of the loan. With an adjustable-rate mortgage (ARM), the interest rate can fluctuate with the market.

Keep in mind that a mortgage’s interest rate is not the same as its annual percentage rate (APR). This is because an APR includes both the interest rate and any other lender fees or charges.

Mortgage rates change frequently — sometimes on a daily basis. Inflation plays a significant role in these fluctuations. Interest rates tend to rise in periods of high inflation, whereas they tend to drop or remain roughly the same in times of low inflation. Other factors, like the economic climate, demand, and inventory can also impact the current average mortgage rates.

To find great mortgage rates, start by using Credible’s secured website, which can show you current mortgage rates from multiple lenders without affecting your credit score. You can also use Credible’s mortgage calculator to estimate your monthly mortgage payments.

What determines the mortgage rate?

Mortgage lenders typically determine the interest rate on a case-by-case basis. Generally, they reserve the lowest rates for low-risk borrowers — that is, those with a higher credit score, income, and down payment amount. Here are some other personal factors that may determine your mortgage rate:

Location of the home
Price of the home
Your credit score and credit history
Loan term
Loan type (e.g., conventional or FHA)
Interest rate type (fixed or adjustable)
Down payment amount
Loan-to-value (LTV) ratio
DTI

Other indirect factors that may determine the mortgage rate include:

Current economic conditions
Rate of inflation
Market conditions
Housing construction supply, demand, and costs
Consumer spending
Stock market
10-year Treasury yields
Federal Reserve policies
Current employment rate

How to compare mortgage rates

Along with certain economic and personal factors, the lender you choose can also affect your mortgage rate. Some lenders have higher average mortgage rates than others, regardless of your credit or financial situation. That’s why it’s important to compare lenders and loan offers.

Here are some of the best ways to compare mortgage rates and ensure you get the best one:

Shop around for lenders: Compare several lenders to find the best rates and lowest fees. Even if the rate is only lower by a few basis points, it could still save you thousands of dollars over the life of the loan.

Get several loan estimates: A loan estimate comes with a more personalized rate and fees based on factors like income, employment, and the property’s location. Review and compare loan estimates from several lenders.

Get pre-approved for a mortgage: Pre-approval doesn’t guarantee you’ll get a loan, but it can give you a better idea of what you qualify for and at what interest rate. You’ll need to complete an application and undergo a hard credit check.
Consider a mortgage rate lock: A mortgage rate lock lets you lock in the current mortgage rate for a certain amount of time — often between 30 and 90 days. During this time, you can continue shopping around for a home without worrying about the rate changing.
Choose between an adjustable- and fixed-rate mortgage: The interest rate type can affect how much you pay over time, so consider your options carefully.

One other way to compare mortgage rates is with a mortgage calculator. Use a calculator to determine your monthly payment amount and the total cost of the loan. Just remember, certain fees like homeowners insurance or taxes might not be included in the calculations.

Here’s a simple example of what a 15-year fixed-rate mortgage might look like versus a 30-year fixed-rate mortgage:

15-year fixed-rate

Loan amount: $300,000
Interest rate: 6.29%
Monthly payment: $2,579
Total interest charges: $164,186
Total loan amount: $464,186

30-year fixed-rate

Loan amount: $300,000
Interest rate: 6.89%
Monthly payment: $1,974
Total interest charges: $410,566
Total loan amount: $710,565

Pros and cons of mortgages

If you’re thinking about taking out a mortgage, here are some benefits to consider:

Predictable monthly payments: Fixed-rate mortgage loans come with a set interest rate that doesn’t change over the life of the loan. This means more consistent monthly payments.

Potentially low interest rates: With good credit and a high down payment, you could get a competitive interest rate. Adjustable-rate mortgages may also come with a lower initial interest rate than fixed-rate loans.

Tax benefits: Having a mortgage could make you eligible for certain tax benefits, such as a mortgage interest deduction.
Potential asset: Real estate is often considered an asset. As you pay down your loan, you can also build home equity, which you can use for other things like debt consolidation or home improvement projects.
Credit score boost: With on-time payments, you can build your credit score.

And here are some of the biggest downsides of getting a mortgage:

Expensive fees and interest: You could end up paying thousands of dollars in interest and other fees over the life of the loan. You will also be responsible for maintenance, property taxes, and homeowners insurance.
Long-term debt: Taking out a mortgage is a major financial commitment. Typical loan terms are 10, 15, 20, and 30 years.
Potential rate changes: If you get an adjustable rate, the interest rate could increase.

How to qualify for a mortgage

Requirements vary by lender, but here are the typical steps to qualify for a mortgage:

Have steady employment and income: You’ll need to provide proof of income when applying for a home loan. This may include money from your regular job, alimony, military benefits, commissions, or Social Security payments. You may also need to provide proof of at least two years’ worth of employment at your current company.

Review any assets: Lenders consider your assets when deciding whether to lend you money. Common assets include money in your bank account or investment accounts.

Know your DTI: Your DTI is the percentage of your gross monthly income that goes toward your monthly debts — like installment loans, lines of credit, or rent. The lower your DTI, the better your approval odds.

Check your credit score: To get the best mortgage rate possible, you’ll need to have good credit. However, each loan type has a different credit score requirement. For example, you’ll need a credit score of 580 or higher to qualify for an FHA loan with a 3.5% down payment.

Know the property type: During the loan application process, you may need to specify whether the home you want to buy is your primary residence. Lenders often view a primary residence as less risky, so they may have more lenient requirements than if you were to get a secondary or investment property.

Choose the loan type: Many types of mortgage loans exist, including conventional loans, VA loans, USDA loans, FHA loans, and jumbo loans. Consider your options and pick the best one for your needs.
Prepare for upfront and closing costs: Depending on the loan type, you may need to make a down payment. The exact amount depends on the loan type and lender. A USDA loan, for example, has no minimum down payment requirement for eligible buyers. With a conventional loan, you’ll need to put down 20% to avoid private mortgage insurance (PMI). You may also be responsible for paying any closing costs when signing for the loan.

How to apply for a mortgage

Here are the basic steps to apply for a mortgage, and what you can typically expect during the process:

Choose a lender: Compare several lenders to see the types of loans they offer, their average mortgage rates, repayment terms, and fees. Also, check if they offer any down payment assistance programs or closing cost credits.
Get pre-approved: Complete the pre-approval process to boost your chances of getting your dream home. You’ll need identifying documents, as well as documents verifying your employment, income, assets, and debts.
Submit a formal application: Complete your chosen lender’s application process — either in person or online — and upload any required documents.
Wait for the lender to process your loan: It can take some time for the lender to review your application and make a decision. In some cases, they may request additional information about your finances, assets, or liabilities. Provide this information as soon as possible to prevent delays.
Complete the closing process: If approved for a loan, you’ll receive a closing disclosure with information about the loan and any closing costs. Review it, pay the down payment and closing costs, and sign the final loan documents. Some lenders have an online closing process, while others require you to go in person. If you are not approved, you can talk to your lender to get more information and determine how you can remedy any issues.

How to refinance a mortgage

Refinancing your mortgage lets you trade your current loan for a new one. It does not mean taking out a second loan. You will also still be responsible for making payments on the refinanced loan.

You might want to refinance your mortgage if you:

Want a lower interest rate or different rate type
Are looking for a shorter repayment term so you can pay off the loan sooner
Need a smaller monthly payment
Want to remove the PMI from your loan
Need to use the equity for things like home improvement or debt consolidation (cash-out refinancing)

The refinancing process is similar to the process you follow for the original loan. Here are the basic steps:

Choose the type of refinancing you want.
Compare lenders for the best rates.
Complete the application process.
Wait for the lender to review your application.
Provide supporting documentation (if requested).
Complete the home appraisal.
Proceed to closing, review the loan documents, and pay any closing costs.

How to access your home’s equity

If you need to tap into your home’s equity to pay off debt, fund a renovation, or cover an emergency expense, there are two popular options to choose from: a home equity loan and a home equity line of credit (HELOC). Both a home equity loan and a HELOC allow you to borrow against your home’s equity but a home equity loan comes in the form of a lump sum payment and a HELOC is a revolving line of credit.

These two loan types have some other key similarities and differences in how they work:

	Home equity loan	Home equity line of credit (HELOC)
Interest rate	Fixed	Variable
Monthly payment amount	Fixed	Variable
Closing costs and fees	Yes	Yes, might be lower than other loan types
Repayment period	Typically 5-30 years	Typically 10-20 years

FAQ

What is a rate lock?

Interest rates on mortgages fluctuate all the time, but a rate lock allows you to lock in your current rate for a set amount of time. This ensures you get the rate you want as you complete the homebuying process.

What are mortgage points?

Mortgage points are a type of prepaid interest that you can pay upfront — often as part of your closing costs — for a lower overall interest rate. This can lower your APR and monthly payments.

What are closing costs?

Closing costs are the fees you, as the buyer, need to pay before getting a loan. Common fees include attorney fees, home appraisal fees, origination fees, and application fees.

If you’re trying to find the right mortgage rate, consider using Credible. You can use Credible’s free online tool to easily compare multiple lenders and see prequalified rates in just a few minutes.

Finance

Planning for retirement? What to know about traditional, Roth IRAs

Published

11 hours ago

March 30, 2025

Business Finance News

Ramsey Solutions financial expert George Kamel weighs in on Americans working past retirement age and provides advice for investors.

Socking away money for retirement is something that’s top of mind for many people.

Many Americans save money for their “Golden Years” through workplace retirement plans and individual accounts they set up, with traditional and Roth IRAs being frequently-used vehicles in the latter category.

Experts recommend you utilize a Roth or Traditional IRA in order to save and grow your retirement package. (iStock / iStock)

Roth IRAs

Holders of Roth IRAs are able to make after-tax contributions to their accounts.

“Why a lot of people like a Roth IRA today is that you pay income taxes today before you put the money into the Roth IRA,” Ted Jenkin, a personal finance expert and partner at Exit Wealth, told FOX Business. “The money grows tax-deferred while it’s inside of the Roth IRA, but the great news about a Roth IRA is you never, ever pay any tax when you take it out, so it’s basically taxed once today and then you’re never ever taxed again.”

For 2025, the contribution limit for Roth IRAs is $7,000 for ages below 50 and $8,000 for those older than that, according to the IRS.

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When a person takes out contributions from a Roth IRA, they will not have taxes or a penalty. A holder could face both if they do that for Roth IRA earnings before five years have elapsed since they’ve opened the account or they’re below the age of 59 ½, according to Fidelity.

Businessman in suit is holding piggy bank. Finance Savings concept (iStock / iStock)

Traditional IRAs

Funds put into traditional IRAs are typically “not taxed until you take a distribution,” according to the IRS.

“Just like a Roth IRA, the dollars grow tax-deferred. However, on all that growth in the traditional IRA, ultimately you’re going to be taxed when you take it out down the road,” Jenkin said.

He noted that “can be challenging because you don’t always know what your tax brackets are going to be down the road.”

People under 50 years old can make up to $7,000 in contributions to traditional IRAs in 2025. For those above 50, it is slightly higher, at $8,000.

In contrast to Roth IRAs, contributions to traditional IRAs can be tax-deductible but, according to Jenkin, that “depends on a number of factors.”

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He said the “big question” for deductibility was “Are you covered by a workplace retirement plan?”

“If you don’t, or your spouse does not, then you can fully deduct the traditional IRA,” he told FOX Business. “But if you have one at work, then there’s a phase out income-wise on how much income you have as to whether or not it’s deductible.”

When it comes to withdrawals for traditional IRAs, you can do so at any time but that distribution “will be includible in your taxable income and it may be subject to a 10% additional tax if you’re under age 59 ½,” according to the IRS.

For traditional IRAs, holders face a required minimum distribution they must pull out each year once they turn 73.

Things to think about

The differences between traditional and Roth IRAs give people planning for retirement plenty to think about as they mull which account they want to use.

Jenkin said one factor was “Do I want to be taxed now, or do I want to be taxed later?”

“When you’re younger, you’re generally in a lower tax bracket, which is why, for younger people, it’s a really great idea in my view to be putting money into a Roth IRA, because once it goes in there, you’re never taxed again.”

He also noted the Secure 2.0 Act that became law in late 2022.

“When you have a traditional IRA and you die and it goes to your kids or any other non-spouse inheritor, you have to take the money out of a traditional IRA within 10 years,” he said. “In a Roth IRA, when you die and your kids inherit the Roth IRA, they can take it out as long as they want. They’re not subject to that 10 years.”

When weighing opening a traditional or Roth IRA, Jenkin also said people should consider whether they can “leave the money in there for an extended period of time.” He said they should factor in their current tax brackets and their “overall future estate plan” for their family as well.

Documents about Individual retirement account IRA on a desk. (iStock / iStock)

He told FOX Business his “lean on this would be that more and more people should be looking at opening up a Roth IRA versus a traditional IRA.”

How many people have IRAs?

The Investment Company Institute said in a study released Thursday that nearly 44% of American households had IRAs in mid-2024, whether that be traditional, Roth, employer-sponsored or a combination.

Traditional IRAs were owned by 32.6% of households, it found. Over 26% of households had Roth IRAs.

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A separate report released by Fidelity Investments in February reported IRA accounts held average balances of $127,543 in the fourth quarter of 2024. That was an increase of 8% from the same three-month period in the prior year, according to the report.

Finance

Wall Street wants to privatize more of your money in market correction

Published

12 hours ago

March 30, 2025

Business Finance News

Big swing and a big miss? How options and private credit ETFs are changing the market.

From America’s largest bank to its biggest asset manager, Wall Street investment strategies once reserved for private banking clients are increasingly being offered to Main Street investors.

In the midst of a market correction and ongoing uncertainty about the outlook for U.S. stocks and the global economy, JPMorgan Chase and BlackRock are among major players in the ETF space making bets that private strategies will continue to see greater adoption. That includes private credit as a mainstream bond portfolio holding, as well as equity income strategies that involved more complicated trading than traditional dividend equity funds.

“Across our business we are looking at an incredible amount of demand from ETF investors who are looking for access to alternative investment funds, and we find managers are looking to push more into that wealth space to tap into growth to meet investors where they are,” Ben Slavin, managing director and global head of BNY Mellon ETF business, told CNBC’s Bob Pisani on last week’s “ETF Edge” from the Exchange ETF Conference in Las Vegas.

“While mutual funds still make a ton of sense for retirement accounts, interval funds have been really successful in allowing for access to private credit,” Jay Jacobs, head of BlackRock’s US Thematic and Active ETF business, told Pisani from the conference. He was referring to a form of closed-end fund that has existed for a long time, and in which investors can access private credit, albeit with less liquidity than in an ETF.

BlackRock, the world’s largest asset manager and biggest issuer of ETFs, acquired a provider of alternative investments research last year, Preqin, and Jacobs said the firm plans “more indexing of private investments.”

The SEC recently approved the first private credit ETF, though not without some controversy.

Lack of liquidity in private markets is a key issue for ETFs to solve as they attempt to grow the alternative investment side of the business. These kinds of funds, like Van Eck’s BDC Income ETF — which invests in business development companies that make private loans to small and mid-sized companies — have traditionally been illiquid but because of innovation in the ETF industry, more people are gaining access.

Another trend that is catching on within the ETF market amid the current volatility in stocks is active ETFs designed to offer downside protection while capitalizing on income gained from selling call options. ETFs including the JPMorgan Equity Premium Income ETF (JEPI) and JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) use this approach.

Goldman Sachs Asset Management’s Bryon Lake said on a recent “ETF Edge” — he was among the leaders of the JPMorgan ETF business when JEPI was created and now runs a similar strategy at Goldman — “You sell that call, you get the premium for that, and then you can pay that out as income. As we look at this space, that’s one category that’s been evergreen for investors. A lot of investors are looking for income on a consistent basis.”

Funds like JEPI give investors exposure to sell call strategies.

“There’s multiple ways to win with a strategy like this, as you can remain invested in the equity side and get the return, and capture that premium income which adds to a growing need and growing desire for income across all asset classes, and that’s a really effective way to stay in the market,” Travis Spence, head of JPMorgan Asset Management’s global ETFs business, said on last week’s “ETF Edge.”

The expense ratio on the JPMorgan Equity Premium Income ETF is 0.35 percent, with a 7.2 percent dividend. The firm also offers the JPMorgan Nasdaq Equity Premium Income ETF with the same expense ratio, but with a dividend yield right now of 10.6 percent. “Its an effective trade off in a choppy market,” Spence said.

Thirty years ago, an investor would have had to be a high-end client of a Wall Street private bank that would customize a portfolio in order to participate in the options fund strategy, said Ben Johnson, Morningstar’s head of client solutions and asset management. But now, “ETFs make it easier and cheaper to implement these strategies,” he said.

Buffer ETFs run by Goldman and others, which cap both market upside and downside as a way to mitigate volatility in returns, are also gaining in popularity.

“Clearly, when you look at the flows, there is demand for these products,” Slavin said. “Until recently, it was not really well known,” he added.

The premium income and buffer ETFs can offer investors a way to stay in the market rather than run from it. But in a market that has seen steep declines of late, Jacobs says these strategies also offer a way for investors to get into the market with less fear of quickly losing money. That’s an important point, he said, with trillions of dollars sitting in money market accounts. “A lot of investors are using buffered products to step out of cash and into the market,” he said. “No one wants to be the one who held cash for five years and just put their money into the market and watched it sell off 10%.”

After watching the S&P 500 already lose more than 10% of its value in a three-week period this month, ETF strategies designed to offer protection are getting more attention from advisors and their clients. But Johnson says investors should remember that there is nothing “new” about these investment strategies that have been used on Wall Street for decades, and investors need to weigh both the pros and cons of wrapping them in an ETF structure.

Private credit ETFs are a good example, he said, since interval funds that trade under ticker symbols are already available, albeit in a less liquid trading format. ETFs have structural advantages to offer — an inexpensive way to gain access to what have long been “really expensive, super illiquid investments,” he said. But on the other side, to be approved by the SEC, the ETFs need to “water down a lot of what investors want,” he added.

Nevertheless, Johnson thinks it may just be a matter of time before private credit ETFs are standard. “I think back to bank loans, circa 2011,” he said, when many “balked at ever wrapping it in an ETF. But now that seems fairly common place.”