Most of our users get purchase and refinance loans from North American Savings Bank.
Thinking about making the jump from renting your space to owning it? Our 30-year mortgage guide will help you learn more about mortgage rates and find the best mortgage loan for you.
|Mortgage Lender||Current 30-Year Mortgage Rate|
|Quicken Loans||3.652% APR|
|Veterans United||3.167% APR (VA loan)|
|Wells Fargo||3.614% APR|
|Bank of America||3.453% APR|
*APR as of 3/2/20. For the most up to date rate, click here.
Best Mortgage Lenders for a 30-Year Loan:
- Best Overall: Quicken Loans®
- Best for Veterans: Veterans United
- Best for Self-Employed Lenders: Luxury Mortgage
- Best for an Online Mortgage Process: better.com
- Best for FHA Loans: PennyMac
|7/1 ARM (adjustable rate)||6.375%||5.972%|
|5/1 ARM (adjustable rate)||5.525%||5.688%|
30-Year Mortgage Advantages
The 30-year mortgage loan is one of the most common mortgage choices. Let’s take a look at some of the benefits to get a 30-year loan.
- Lower monthly payment: You’ll pay less for a 30-year mortgage each month compared to a 20- or 15-year loan — it’s one of the biggest benefits of choosing this type of mortgage. Let’s take a look at an example to illustrate just how big the difference is.
Let’s say you want to buy a home worth $250,000 and need to borrow $200,000. You can choose between a 15- or a 30-year mortgage term. Each loan option has an interest rate of 3.5%. You’ll pay about $1,430 each month if you choose the 15-year loan. On the other hand, you’ll pay about $900 a month for your mortgage if you take the 30-year loan — a difference of over $500. Choosing a 30-year loan can help you lower your monthly payment.
- Opportunity to invest elsewhere: You may have leftover money to invest elsewhere if you get a 30-year mortgage. Let’s say you need to build an emergency fund or flesh out your retirement savings — a 30-year mortgage can help you divert your extra money to other options.
- More flexibility: Most mortgage companies no longer include a prepayment penalty in mortgage contracts. A prepayment penalty is a clause that requires you to pay a fixed fee if you pay off your loan early. This means that if you end up having extra cash, you can put it toward your mortgage’s principal balance.
Choosing a 30-year mortgage loan gives you more freedom to pay down your loan. For example, let’s say you can choose between a 15-year loan with a $1,500 monthly payment and a 30-year loan with a $1,000 monthly payment. You’d have $1,500 extra to spend each month. If you take the 15-year loan and your income decreases, you run the risk of foreclosure. However, if you choose the 30-year mortgage, you can either pay $1,000 each month or divert your extra $500 toward reducing your principal.
30-Year Mortgage Disadvantages
Despite the benefits, 30-year mortgage loans aren’t right for everyone. Let’s take a look at a few of the disadvantages of a 30-year loan.
- You’ll pay more in interest. Choosing a 30-year mortgage loan means you’ll rack up significantly more interest by the time you own your loan. Because this option gives you more time to pay off the loan, your lender also has more time to charge interest on the amount of money you borrow. Let’s take a look at an example.
Let’s say you have to choose between two $200,000 mortgage loans that each have an interest rate of 3.5%. If you take a 15-year loan, you’ll pay a total of about $57,350 in interest by the time you own your home. If you take the 30-year loan, you’ll end up paying over $123,000 in interest by the time you make your final mortgage payment. Options with shorter terms are always less expensive over time — 30-year loans are much more expensive in comparison.
- You’ll pay a higher APR. Mortgage lenders see you as a riskier borrower when you have a longer mortgage term. A 30-year term means you have twice the amount of time to default on your loan than someone who has a 15-year term.
To compensate for this risk, lenders charge a higher interest rate on 30-year loans. For example, Quicken Loans currently offers 30-year loans with an average APR of 3.652% and 15-year loans with an average APR of 3.466% APR. Though that might not seem like a huge difference, even a fraction of a percentage point can end up costing you thousands more by the time you own your home free and clear.
Best Mortgage Lenders for a 30-Year Loan
Let’s take a look at some of the best mortgage companies that offer 30-year loan options.
1. Best Overall: Quicken Loans®
Quicken Loans should be your first stop if you’re looking for an easy way to get a mortgage online. As America’s largest mortgage lender,1 Quicken Loans services nearly every type of loan, from higher-value jumbo loans to affordable, accessible FHA loans. Quicken Loans has helped millions of homeowners buy homes, and it offers an exceptionally easy online mortgage application process. The company’s Rocket Mortgage® platform makes the online application easy.
The company has streamlined the process so you can apply for your loan from a phone or tablet. The Rocket Mortgage® platform also includes tons of information that first time homebuyers will find useful. Rocket Mortgage® is one of the best choices, with a wide range of loan options and an easy approval process.
2. Best for Veterans: Veterans United
Veterans United is a mortgage lender that specializes in providing VA loans. VA loans are a special type of mortgage loan that requires a $0 down payment exclusively for veterans and service members. Veterans United also employs a full staff of former service members from each branch of the military who understand the VA loan process on a personal level. This means that you’ll get direct advice from men and women who have gone through the process themselves.
In addition to VA loans, Veterans United also offers streamlined VA refinance loans and conventional mortgage solutions. Take a look at Veterans United if you’re a service member or veteran looking for the easiest way to understand the VA loan process.
3. Best for Self-Employed Lenders: Luxury Mortgage
You might have a more difficult time finding a mortgage loan if you’re self-employed. Most lenders require you to submit proof of income, and that amount can fluctuate as business comes and goes.
Luxury Mortgage offers customized lending solutions for business owners, freelancers and other self-employed individuals. The company’s Asset Qualifier Program allows you to use the value of business assets you own to qualify for a mortgage. This can be especially beneficial for business owners who have devoted a large percentage of their income into assets to improve the value of their company. Luxury Mortgage can also help you find a loan with a credit score as low as 580 points and without employment or income documentation.
Luxury Mortgage is licensed to lend in: CA, CO, CT, DC, FL, GA, IL, MD, MA, MI, NC, NH, NJ, NY, PA, SC, TN, TX, VA, WA.
4. Best for an Online Mortgage Process: better.com
better.com is a new online mortgage company with a streamlined application. By cutting steps and expenses from the traditional mortgage process, Better.com can speed up your preapproval and offer you lower interest rates.
To get started, just answer a few questions about your income, co-borrowers on your loan, when you plan to purchase a property and your assets. You can complete this on your phone and receive a decision in as little as a few minutes. better.com even offers a Better Price Guarantee that ensures that you’re getting the most affordable APR possible.
5. Best for FHA Loans: PennyMac
PennyMac is a unique lender that provides both online and in-person FHA loan servicing. The company is one of the largest FHA lenders in the United States and its network can help you connect with over 32,000 realtors to find your perfect property.
The company also commits to on-time closing promises to help you close your loan or refinance on schedule. PennyMac might be the right choice for you if you’re looking for an affordable, convenient way to finance with an FHA loan.
Find the Right Loan for You
Choosing a home and committing to a mortgage is a major decision, so leave yourself plenty of time to learn about each of your options in detail. If you’re considering the leap from renter to homeowner, analyze the different loan terms can offer to decide if a 30-year mortgage is the right loan for you.
1Based on Quicken Loans data in comparison to public data records.
Get Ready for Take Off
Rocket Mortgage® is an online mortgage experience developed by Quicken Loans®, America’s largest mortgage lender. Rocket Mortgage® makes it easy to get a mortgage — you just tell the company about yourself, your home, your finances and Rocket Mortgage® gives you real interest rates and numbers. You can use Rocket Mortgage® to get approved, ask questions about your mortgage, manage your payments and more.
You can work at your own pace and someone is always there to answer your questions — 24 hours a day, 7 days a week. Want a fast, convenient way to get a mortgage? Give Rocket Mortgage® a try.