The war is keeping mortgage rates higher than expected, but there are still ways to get a good deal.
Late last year, housing economists predicted 2026 would be when homebuyers saw 6% average rates — or at least near that — a threshold many prospective homeowners anticipated. By February, the mortgage rate market was ahead of schedule and rates dropped to 5.98%.
Then the Iran war started. Oil prices skyrocketed, triggering energy inflation and higher borrowing costs. Since March, they've been hovering between 6.30% and 6.50%, much higher than housing experts predicted.
"The wartime inflation is the story here, and that kind of changes the base case for what we expect going forward," Joel Berner, senior economist at Realtor.com, told CNBC Select. "As long as we're still involved in this conflict, and the Strait of Hormuz continues to be compromised, and oil isn't flowing the way that it once did, and prices are being held up, we're going to be kind of in this 6.3% to 6.4% range for the foreseeable future."
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And while the spring season hasn't been the blockbuster homebuying season housing experts were anticipating, activity has inched up from the year prior, despite higher-than-anticipated rates.
During the week ending May 8, the Mortgage Bankers Association (MBA) market composite index, which measures mortgage application volume, increased by 15% year over year.
If you're one of the many people looking to buy this spring, CNBC Select has good news for you: There are stellar lenders with rates over a half-a-point lower than the daily average. Here are our favorites.
Better
Why CNBC Select likes Better: Better is fast and affordable. It will preapprove you for a loan in three minutes without a hard credit check and its average closing time is 22 days, about half the industry average.
Drawbacks: Better has no physical locations, so those who prefer to do their lending in-person may want to consider borrowing elsewhere.
Better offers 30-year conventional mortgages with rates as low as 6.125% as of May 15, according to its website — about 0.50 points lower than the average rate, Mortgage News Daily.
Better Mortgage
Annual Percentage Rate (APR)
Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included
Types of loans
Conventional loan, FHA loan, Jumbo loan and adjustable-rate mortgage (ARM)
Terms
10–30 years
Credit needed
620
Minimum down payment
3.5% if moving forward with an FHA loan
Terms apply.
FourLeaf
Why CNBC Select likes FourLeaf: FourLeaf is an easy credit union to join. Just put $5 into the company's savings account and you can apply for its mortgage. Credit Unions are member-owned, so any profit is reinvested into financial products for members.
Drawbacks: FourLeaf's maximum jumbo loan size is $1.5 million, so if you need a mortgage bigger than that, you'll have to go elsewhere.
FourLeaf offers 30-year conventional mortgages with rates as low as 6.375% as of May 15, according to its website — about 0.25 points lower than the average rate, per Mortgage News Daily.
- Free rate lock for 60 days, so you can shop without worrying about losing your rate.
- It only takes a $5 deposit for membership, making it an accessible way to get the benefits of a credit union.
- Only has branches in New York and New Jersey
- Home loans not available in Texas
- No USDA or home equity loans
Navy Federal Credit Union
Why CNBC Select likes Navy Federal Credit Union: In addition to below-average conventional loan rates, Navy Federal also has some of the lowest VA loan rates on the market. In addition, if you find a competitor with a lower rate, the credit union will match that rate or pay you $1,000. Plus, you can lower your mortgage rate without refinancing.
Drawbacks: In order to become a member, you, your parent, sibling, spouse or grandparent must have served in the military. If you don't fall into this category, you won't be able to join or access a mortgage here.
Navy Federal offers 30-year conventional mortgages with rates as low as 6.000% as of May 15, according to its website — about 0.62 points lower than the average rate that day, per Mortgage News Daily.
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Why trust CNBC Select?
At CNBC Select, our mission is to deliver high-quality service journalism and comprehensive consumer advice to our readers, enabling them to make informed financial decisions. Every mortgage review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of financial products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties and we pride ourselves on our journalistic standards and ethics.
Our methodology
CNBC Select reviews mortgage products using a variety of criteria, including average rates, terms, availability, fees, types of loans offered, online experience and customer satisfaction.
Additionally, we incorporate findings from independent sources, including lender scores from the J.D. Power mortgage origination and servicing surveys and ratings from the Better Business Bureau.
For home equity loans, we review rates, repayment terms, the amount of equity required and the minimum and maximum loan amounts available.
We also consider requirements for credit scores, debt-to-income ratios and combined loan-to-value ratios.
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