Mortgage Rates & Home Buying Guide 2026

As of 2026, 30-year fixed mortgage rates are averaging 6.50–7.00%, while 15-year fixed rates are at 5.75–6.25%. Your actual rate depends on your credit score, down payment, loan type, and lender. Borrowers with excellent credit (740+) and a 20% down payment typically qualify for the best rates. Shopping multiple lenders can save thousands over the life of the loan.

The traditional down payment is 20% ($80,000 on a $400,000 home), which avoids private mortgage insurance (PMI). However, many loan programs require less: conventional loans allow as low as 3%, FHA loans require 3.5%, and VA loans for eligible veterans require 0%. A larger down payment means lower monthly payments and less interest paid overall, but it is not always necessary to wait until you have 20%.

A fixed-rate mortgage locks in your interest rate for the entire loan term (typically 15 or 30 years), so your monthly principal and interest payment never changes. An adjustable-rate mortgage (ARM) starts with a lower introductory rate for a set period (usually 5, 7, or 10 years), then adjusts periodically based on a market index. ARMs carry more risk because your payment can increase when rates rise, but they offer lower initial payments and may make sense if you plan to sell or refinance before the adjustment period begins.

Private mortgage insurance (PMI) is required on conventional loans when your down payment is less than 20% of the home price. PMI typically costs 0.5%–1.5% of the loan amount annually, added to your monthly payment. You can avoid PMI by making a 20% down payment, choosing a VA loan (no PMI required), or using a piggyback loan. Once your equity reaches 20%, you can request PMI removal from your conventional loan.

A 30-year mortgage has lower monthly payments but you pay significantly more interest over the life of the loan. A 15-year mortgage has higher monthly payments but a lower interest rate (currently 5.75–6.25% vs 6.50–7.00% for 30-year) and you build equity much faster. Choose 30-year if you need lower payments for cash flow flexibility, or 15-year if you can comfortably afford the higher payments and want to pay off your home sooner. Some homeowners split the difference by taking a 30-year mortgage and making extra payments toward principal.