Let's look at a recent case of a newlywed couple I consulted with in St. Louis. Both had credit scores in the low 700s. They prepared a 10% down payment and received pre-approval for a 30-year fixed mortgage.

To understand this process, you need to know the structure of how interest rates are determined. The benchmark is the yield on 10-year Treasury bonds. This is combined with the Federal Reserve's benchmark interest rate, inflation indicators, and the supply and demand in the MBS market. These four factors create the average interest rate each week.

• 10-year Treasury bond yield
• Federal Reserve benchmark interest rate decisions
• Inflation indicators
• MBS market supply and demand
• Credit score, DTI, down payment

As of July 2026, the average interest rate for a 30-year fixed mortgage is in the high 6% range. The 15-year fixed rate is between the high 5% and low 6% range. The difference between the two products is usually 0.6 to 0.8 percentage points.

This couple also received a quote for a 15-year mortgage. Their monthly payment increased by nearly $500. It didn't fit their budget, so they ultimately chose the 30-year fixed option. Instead, they decided to pay extra on the principal whenever they had surplus funds each year.

I also explained the ARM products. The 5/1 ARM had a lower initial rate. However, this couple planned to stay in St. Louis for a long time. Therefore, they chose a fixed rate to avoid the risk of rate fluctuations.

The difference in credit scores is significant. A score above 760 typically receives average or lower rates. A score in the 680s increases rates by 0.2 to 0.5 percentage points. A score below 620 can see differences of over 1 percentage point.

St. Louis has housing prices that are lower than the national average. This means the burden of the down payment is relatively small. However, there are many older homes, so property taxes and insurance rates should also be checked.

The advice for Korean households is simple. Keep your credit card utilization below 30%. Do not open new cards right before applying for a loan. Prepare your income documentation in advance.

In the future, interest rates may move gradually based on Federal Reserve policies and price indicators. It is advisable to prepare for fluctuations within the current range rather than expecting drastic changes.