Compare Current 30-Year Mortgage Rates in December 2024

A 30-year fixed-rate mortgage is a home loan repaid over 30 years with an interest rate that does not change. The 30-year period is your “loan term,” and usually gives you the lowest monthly payment compared to shorter terms.

Mortgage interest rates on 30-year mortgages are often higher than shorter-term mortgages, like 15-year fixed-rate loans. You also pay more interest over 30 years than with a shorter loan term. Check out an amortization schedule to compare the differences in monthly payments and total interest paid for a 15-year versus 30-year mortgage.

Lenders look at your debt-to-income (DTI) ratio, which compares your gross monthly income to your debts, to determine how much you can afford. Lenders usually consider a DTI ratio under 35% to be “good,” but you may qualify for a loan even with a higher DTI. Most loan programs allow for a maximum DTI ratio between 41% and 45%.

Common mortgage loan types include conventional, FHA, USDA and VA loans. Borrowers with unique needs can also utilize non-qualifying loans that cater to specific financial situations or property types.

You should refinance a 30-year mortgage if you’ll make back your closing costs by paying less to your mortgage before you sell your home. This is called your break-even point, and it’s calculated by dividing your closing costs by your monthly savings. However, there are some other reasons you should consider refinancing a 30-year mortgage:

• You need to pay off large credit card debt. Interest charged on credit card debt is usually much more than interest you pay on a 30-year mortgage. Paying off revolving debt with a refinance also has an added bonus: Your credit score may go up.
• You want to get rid of mortgage insurance. If you made a small down payment to buy your home but your home value has gone up, a refinance could help you get a lower rate and get rid of your monthly private mortgage insurance (PMI) payments.
• You want to get rid of your FHA loan and FHA mortgage insurance. If you have an FHA loan, which is a mortgage backed by the Federal Housing Administration (FHA), refinancing to a conventional mortgage is the only way to get rid of the FHA mortgage and its required FHA mortgage insurance.
• Your adjustable-rate mortgage (ARM) rate is about to rise. If your ARM rate is about to go up, a refinance to a 30-year fixed-rate loan will give you a stable monthly payment.
• You need cash for a major renovation or life expense. You can spread out the cost of an expensive home improvement project with a 30-year fixed-rate cash-out refinance.

The process for refinancing a home is usually very similar to applying for any mortgage, with one big exception: streamline refinance loans. They’re called “streamline” because they’re faster and have far fewer hoops to jump through compared with standard refinances. The main catch, though, is that they can only be used to refinance a VA loan into a new VA loan, or to refinance an FHA loan into a new FHA loan.

The two streamline refinance programs are: VA interest rate reduction refinance loan (IRRRLs) and FHA streamline refinances. 

Both purchase and refinance closing costs usually run about 2% to 6% of the loan amount.