Current Mortgage Rates for 2020

It can be difficult to decipher the ins and outs of real estate terminology when you are buying a new home. It’s even harder to seek out the lowest mortgage rate when you’re swimming in a sea of data, but there are some things you can do in order to help you find the best mortgage rate.

Whether you are buying a new home or shopping for a reverse mortgage, finding the best current mortgage rates is crucial to your finances for years to come.

What are mortgage rates?

When you borrow money from a home lender or bank, interest accumulates on the amount you borrow for your home. This is a percentage of the loan that is paid in small amounts each month until the loan is fully repaid. With each payment, your loan is adjusted to account for payments made, as well as the interest that accumulates with each day.

When you are looking for a new mortgage, there are some key factors that will help you find the best mortgage rate for you.

  1. Shopping – There are many different kinds of lenders who offer home loans, so it’s important to thoroughly shop your options to find the best mortgage rate for your exact needs.
  2. Credit score – Obtain a free copy of your credit report so you don’t hurt your credit report by applying with lenders that won’t accept you or that you’re not eligible for.
  3. Cost – Every lender sets up mortgages differently, so pay careful attention to how the loan is structured. Look for the annual percentage rate, or APR, for each loan and how repayment will be handled.
  4. Research – Search the web and contact your lender to inquire about recent trends in mortgage rates. This can help you understand how each specific lender has been performing in recent months.
  5. Points – It’s possible to pay more upfront to lower your mortgage rate. Sometimes you can purchase a point for a fee that will lower your rate by 0.10%, saving you money over the life of the mortgage.
  6. Fees – There are many fees that you have to pay with a home loan, but every company handles these differently. Certain fees like origination fees and closing costs can have a significant impact on your total debt.
  7. Down payments – The Federal Trade Commission reports that the average down payment for a new home is 20% of the total purchase price. There may be additional requirements that can impact how much you will owe.
  8. Law – Review the Equal Credit Opportunity Act and the Fair Housing Act, so you know your rights when buying a new home.

Types of mortgages

There are many different types of homeowners out there, so there are several kinds of mortgages to meet the unique needs of the American homebuyer.

  • Conventional loan: A conventional loan is one that is not offered through the government but instead through a private entity. These typically require a higher down payment since they do not have the extra security of a federal backer.
  • FHA loan: The Federal Housing Administration (FHA) guarantees these kinds of loans for greater security, a much easier approval process and a lower down payment than a conventional loan.
  • VA loan: These loans are available to military members and are backed by the U.S. Department of Veterans Affairs (VA). A VA loan does not require a down payment for a mortgage.
  • Adjustable-rate mortgage: With an adjustable-rate mortgage, your interest rate will begin at a fixed rate and then change after a certain period of time to a variable rate.
  • USDA loan: Low-income homebuyers can benefit from a USDA loan that’s backed by the U.S. Department of Agriculture (USDA).
  • Jumbo loan: Not all properties may meet the requirements of a traditional home loan, so a jumbo loan is designed to fill that void by financing more expensive properties that normally wouldn’t qualify for a loan.
  • Fixed-rate loan: A fixed-rate state loan uses one permanent rate that doesn’t change regardless of economic conditions.
  • Bridge loan: A bridge loan is a way to settle your current loan while also paying for the down payment of your new loan.

Mortgage basics: What to know

These key terms will help you understand and prepare for your new mortgage.

  1. Mortgage APR: If you only look at the interest rate of your loan, you are missing a key part of your payments. Your mortgage APR includes not only your interest rate but also your lender’s fees for a cumulative total of debt.
  2. Escrow: This is a term that comes up frequently in the homebuying process and refers to money that you pay to your lender for things like tax and insurance. These costs are included in your monthly payments and then adjusted by your lender at the end of each year.
  3. Closing costs: These are fees that you pay on the loan principal, amounting to about 2% to 5% and adding several thousand dollars to your bottom line. Your closing costs will include things like your credit check, title search and appraisal.

How to find the best mortgage rates

There are also some things you can do to improve your mortgage rate. Paying down existing debts and improving your credit score are easy ways to make your application more attractive to lenders.

You should also consider the many options available to you. Though a risky prospect for some, an adjustable-rate mortgage has proven advantageous for many after COVID-19 caused markets to spiral.

There are many terms and lenders that may be available to you, such as a 15-year loan versus a 30-year loan. Before you commit to a loan, it’s important to run the numbers to ensure that you really are getting the best deal for you.

How to choose the right mortgage lender

There are several different kinds of lenders that you can work with for your mortgage. There are private lenders who offer conventional loans, and the Department of Veteran Affairs sponsors the VA loans, but there are other kinds of lenders, too.

Credit unions are an excellent way to leverage your membership for exclusive low rates on your home loan. There are also mortgage bankers who offer loans specific to a single financial institution and correspondent lenders that are typically local providers that are an affiliate of a larger bank.

Research your options to see what home loans and mortgage rates are available from different vendors. You may be surprised by what you find.

Lenders with the best mortgage rates

The best mortgage rates in 2020 can change quickly, but there are some of the top mortgage lenders available.

Bank of America

  • 15-year fixed rate of 2.500% (2.852% APR)
  • 30-year fixed rate of 3.375% (3.563% APR)
  • 5/1 ARM variable of 2.750% (2.937% APR)

Wells Fargo

  • 15-year fixed rate of 2.500% (2.703% APR)
  • 20-year fixed rate of 2.875% (3.019%% APR)
  • 30-year fixed rate of 3.000% (3.093% APR)
  • 7/1 ARM variable of 2.750% (2.851% APR)
  • 5/1 ARM variable of 2.625% (2.827% APR)

Quicken Loans

  • 10-year fixed rate of 2.5% (3.093% APR)
  • 15-year fixed rate of 2.5% (2.942% APR)
  • 30-year fixed rate of 2.99% (3.236% APR)

US Bank

  • 10-year fixed rate of 2.625% (2.805% APR)
  • 15-year fixed rate of 2.625% (2.748% APR)
  • 20-year fixed rate of 3.000% (3.096% APR)
  • 30-year fixed rate of 3.250% (3.319% APR)
  • 10/1 ARM variable of 4.250% (3.797% APR)
  • 5/1 ARM variable of 3.625% (3.204% APR)
  • 3/1 ARM variable of 4.500% (3.356% APR)

Rates accurate as of July 15, 2020

Too long, didn’t read?

As the market continues to fluctuate in response to the coronavirus pandemic, it’s more important than ever to pay attention to real estate market trends. Shopping your options for a home loan can help you determine whether a fixed rate or adjustable rate is best, how long of a loan you will need and even what kind of a down payment you will need to make.

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Lena Borrelli
Lena Borrelli
Contributing Writer

Lena Borrelli is a Tampa-based freelance writer who has worked with leading industry titans, such as Morgan Stanley, Wells Fargo, and Simon Corporation. Her work has most recently been published on sites like TIME, ADT, Fiscal Tiger, Bankrate and Home Advisor, as well as many other websites and blogs around the world.

Reviewed by

  • Courtney Mihocik is an editor at The Simple Dollar who specializes in insurance, personal finance, and loans. Previously, she wrote and edited for,, Ballantyne Magazine, Thread Magazine, The Post, ACRN, The New Political, Columbus Alive and the Institute for International Journalism.