Current Mortgage Rates

What Affects Mortgage Rates?

Mortgage rates fluctuate constantly based on a variety of economic variables and the particular rate a borrower qualifies for depends on personal factors. If you’re planning to buy a home, refinance, or invest in property, it’s important to understand the factors that affect mortgage rates so you can better time your loan application and secure a favorable rate.

Here’s a closer look at what impacts the current mortgage rates:

Macroeconomic Factors

• Inflation: When inflation rises, mortgage rates tend to follow. Higher inflation erodes the purchasing power of money, so lenders typically raise rates to maintain their returns.
• Federal Reserve Policy: Although the Fed doesn’t directly set mortgage rates, its decisions to raise or lower the federal funds rate influence overall borrowing costs across the economy.
• U.S. Treasury Yields: Mortgage rates often move in tandem with the yield on 10-year Treasury notes. When Treasury yields go up, mortgage rates typically rise as well.
• Economic Growth: Strong economic indicators, like a growing GDP, often lead to higher rates as demand for loans increases. Conversely, during slowdowns or recessions, rates may drop to encourage borrowing.
• Employment Data: High employment levels can fuel economic growth and inflation, pushing rates higher. Weak job reports often contribute to lower rates.
• Global Market Stability: International events, such as geopolitical tensions or global financial crises, can drive investors toward safer assets like U.S. bonds, indirectly pushing mortgage rates down.

Borrower-Specific Factors

• Credit Score: Higher credit scores generally qualify for lower mortgage rates because they signal lower risk to lenders. A lower score may mean higher rates or additional fees.
• Debt-to-Income (DTI) Ratio: Lenders assess your ability to repay the loan based on your monthly debt compared to your income. A lower DTI ratio can lead to better rates.
• Down Payment Amount: A larger down payment reduces lender risk, often resulting in a more favorable rate. Smaller down payments may require private mortgage insurance (PMI), which increases overall costs.
• Loan Type and Amount: Different loan programs (conventional, FHA, VA, etc.) have different pricing structures. Jumbo loans (those above conforming loan limits) often carry slightly higher rates.
• Property Type: Rates can vary based on whether you’re financing a primary residence, a second home, or an investment property. Investment properties typically have higher rates due to increased risk.
• Loan Term: Shorter loan terms (like a 15-year mortgage) usually come with lower rates compared to longer terms (like a 30-year mortgage) because they represent less risk over time.

Today’s Mortgage Rates

Mortgage rates aren’t one-size-fits-all. Conventional and non-QM mortgage rates can change daily based on the economy, lender guidelines, and the type of loan you choose. It’s important to understand your options, how rates are quoted, and the difference between APR vs. interest rate when comparing offers. Below you’ll find the current mortgage interest rates for some of our most popular mortgage programs. 

Conventional Loans

Conventional loans are standard mortgages that aren’t backed by the federal government. They’re ideal for borrowers with strong credit, steady income, and a sizable down payment (though some programs allow as little as 3% down). Conventional loans can be either conforming (within loan limits set by Fannie Mae and Freddie Mac) or non-conforming for higher-priced homes. They typically offer competitive rates and flexible terms for qualified buyers.

FHA Loans

FHA loans are insured by the Federal Housing Administration and are designed to make homeownership more accessible, especially for first-time buyers or those with lower credit scores. They require a minimum 3.5% down payment and are more forgiving of past credit challenges, although they do include mortgage insurance premiums. FHA loans are a great fit if you need more flexible qualification criteria but are willing to accept slightly higher overall borrowing costs.

DSCR Loans

DSCR loans (debt service coverage ratio loans) are primarily used by real estate investors. Instead of focusing on the borrower’s income, lenders look at the property’s rental income to determine loan eligibility. A higher DSCR indicates the property generates enough income to comfortably cover the loan payments. These loans allow investors to qualify based on the strength of the investment property rather than personal finances.

Bank Statement Loans

Bank statement loans offer an alternative for self-employed borrowers who might not have traditional income documentation like W-2s or tax returns. Instead, lenders review 12–24 months of personal or business bank statements to assess income consistency. They are especially helpful for entrepreneurs, freelancers, and gig workers who have strong cash flow but non-traditional earnings patterns.

Asset-Based Loans

Asset-based loans allow borrowers to qualify based on their assets rather than income. If you have significant savings, investments, or retirement funds, you can use these assets to secure financing without needing to show regular income. These loans are a flexible option for retirees, business owners, or high-net-worth individuals who want to leverage their existing financial strength.

VA Loans

VA loans are available to eligible veterans, active-duty service members, and certain military spouses. Backed by the Department of Veterans Affairs, these loans offer powerful benefits, including no down payment, no private mortgage insurance (PMI), and competitive rates. VA loans are also more flexible on credit scores and debt ratios, making homeownership more attainable for military families.

SOFR Adjustable-Rate Mortgage

SOFR Adjustable-Rate Mortgages (ARMs) are tied to the Secured Overnight Financing Rate (SOFR), which replaced LIBOR as the standard benchmark. With an ARM, the initial interest rate is typically lower than that of a fixed-rate mortgage but can adjust periodically based on market conditions. When choosing between an adjustable-rate vs. fixed-rate mortgage, it’s important to consider how long you plan to keep the loan and your comfort level with potential payment changes over time.

Lock In Your Rate Today

Mortgage rates are constantly shifting based on economic conditions and personal factors, making it more important than ever to stay informed and act when the time is right. Whether you’re considering a conventional loan, an FHA loan, or a specialized option like a DSCR or asset-based loan, understanding your choices can help you make the best financial decision.

At Griffin Funding, we make it easy to secure the right mortgage for your needs with competitive rates, flexible loan options, and a simple, streamlined process. Using our Griffin Gold app, you can monitor your loan progress, upload documents securely, and stay connected every step of the way, making homeownership more accessible than ever. Contact Griffin Funding today and lock in your rate with confidence.

Bill Lyons is the Founder, CEO & President of Griffin Funding. Founded in 2013, Griffin Funding is a national boutique mortgage lender focusing on delivering 5-star service to its clients. Mr. Lyons has 23 years of experience in the mortgage business. Lyons is seen as an industry leader and expert in real estate finance. Lyons has been featured in Forbes, Inc., Wall Street Journal, HousingWire, and more. As a member of the Mortgage Bankers Association, Lyons is able to keep up with important changes in the industry to deliver the most value to Griffin's clients. Under Lyons' leadership, Griffin Funding has made the Inc. 5000 fastest-growing companies list five times in its 11 years in business.