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Freddie Mac PMMS for May 2026 shows the 30-year fixed averaging 6.30%. 15-year fixed is 5.64%. Rates change weekly (Freddie publishes Thursday at noon ET). Your actual rate depends on credit score, down payment, loan size, property type, and lender — typically within 0.25-0.5% of the PMMS average.

Most lenders require front-end DTI under 28-31% (mortgage PITI / gross income). For a $400K home with 20% down at 6.30%, monthly PITI is roughly $2,500-$2,800 (incl. tax, insurance). At 28% front-end DTI, you'd need gross income around $107K-$120K/year. CFPB Qualified Mortgage rules cap back-end DTI at 43%.

Mathematically, 15-year saves dramatically: ~$240K less interest on a $320K loan at 5.64% vs. 30-year at 6.30%. Practically, 15-year monthly payment is ~33% higher, requiring more income to qualify. Best for: high-earners near retirement; established income; want to be debt-free in 15 years. 30-year better for: cash flow flexibility, ability to invest the difference.

20% down payment avoids PMI on conventional loans. Alternatives: piggyback loan (80-10-10 structure), VA loan (0% down, no PMI ever), or wait until you have 20% saved. PMI typically costs 0.5-1.5% of loan annually, so on a $400K mortgage it adds $167-$500/month — significant cost.

Conventional PMI can be removed at 20% equity through a written request, automatically at 22% per Homeowners Protection Act. FHA MIP is harder — typically required for life of loan unless you put 10%+ down (then 11 years). To accelerate equity: extra principal payments, refinance after value rises, or pay down to 78% LTV.

On a $320K loan (30-yr fixed at 6.30%): about $393K total interest. So total payments are $713K to repay $320K borrowed. Drop to 5.30% rate: total interest falls to ~$315K. The interest paid is greater than principal at any rate above ~3.5% on a 30-year. This is why rate matters enormously.

Escrow is when the lender collects monthly contributions for property tax and insurance, holding them in escrow and paying the bills directly when due. Most loans with under 20% down require escrow. With 20%+ equity you can typically waive escrow (some lenders charge 0.25% rate premium). Escrow simplifies — no surprise tax bills.

Mortgage rates broadly follow the 10-year Treasury yield plus a spread (typically 1.5-2.5%). Federal Reserve policy moves Treasury yields. Other factors: investor demand for mortgage-backed securities, lender credit risk premium, your specific credit profile, loan type, and current market competition. Rates change daily but big moves usually align with major economic news (Fed meetings, CPI release, employment reports).