The rate you are offered depends on your FICA score, income, debt-ratio, where the property is located and other factors. Today 6.5-7% is pretty much the norm on a 30 year fixed...lenders are nervous due to all of the sub-prime mess. The best advice is to get a good mortgage broker who keeps abreast of the rapidly changing rates/programs and can get you the best deal. Banks generally are not looking out for your best interest...they are looking to maximize profits. Generally, the fee you pay a mortgage broker is nothing compared to the savings they can obain for you in interest, points, etc.

Many factors need to be considered as all have mentioned. Even the state youre looking to purchase in can determine difference in rates. Make sure you work with a mortgage consultant in the city youre looking to purchase. For example, if youre looking to purchase a new construction hi-rise condo in NY then you probably shouldnt be using a loan officer from Vermont (no offense to Vermont, I love Ben and Jerrys and syrup). sunny_hong@countrywide.com

You have gotten some excellent answers there are several factors involved.
1. FICO score
2. are you paying points/fees?
3. Are you talking a 30 year fixed?

Most important is to shop around and do not just rely on the Internet. Check local lenders too!

Your friend in Charlottesville

I think the other posters have provided you great advice but I would like to add that the 6th biggest mistake of the Top 10 mistakes people make with their mortgage is figuring “rate” is the most important feature. You could have a great rate but be in the wrong program for your personal circumstances and that can cost you dearly over the long term. My advice is to take the time to sit down face-to-face with a local mortgage planner to disclose all moving parts of your situation and design a mortgage plan that will focus on optimizing your cash flow today while being mindful of your long term retirement goals.
Regards, Dave

With a good FICO you can shop around, compare rates, fee structures, etc; one can always try to buy down points at settlement too....

This is a really tough time for non-cash buyers everywhere .... period ....

I agree with the others, great answers. Keep in mind, in 1950, the average mortgage interest rate was 4.25% (lowest in US history that I know of). In 1981 the interest rate had climbed to 17.5% so in comparison 6.x% is not bad.

I agree with the other posters thus far -- it really does depend on how your loan is structured -- what's your credit score? Are you documenting your income, your assets? What sort of loan program are you looking for? How much of a down payment are you putting? Are you going to owner occupy this home? Are you buying the home or refinancing it? What is your loan amount? Take a look at the link below to find out what exactly affects your interest rate.

To answer your question though and for ballpark purposes, with ideal circumstances (20% down, purchase loan, full documentation, 780+ credit score, $400k loan amount), competitive interest rates as of today would be around:

5/1 ARM @ 5.900%
7/1 ARM @ 6.200%
30 year fixed @ 6.400%

Hope this helps! Best of luck.

Interest rates also differ for level of income, assets, loan to value ratio and region in which you are buying. Regional banks that offer portfolio products have the ability to discount their rates from the larger national access lenders.

Interest Rates are different for buyers depending on their Fico scores (credit scores) Buyers with better scores get better rates.