Mortgage interest rates experienced a slight dip this week. Freddie Mac reports the national average for a 30-year fixed-rate mortgage fell by eight basis points to 6.96%, while the 15-year fixed rate decreased by 11 basis points to 6.16%.
Table Content:
- Current Mortgage Rates
- Current Mortgage Refinance Rates
- Free Mortgage Calculator
- How Mortgage Interest Rates Function
- Choosing the Right Mortgage Term Length
- Analyzing Mortgage Rate Trends
- Mortgage Interest Rates Today: FAQs
- What’s happening with mortgage interest rates today?
- How low will mortgage rates go in 2025?
- What’s the potential high for mortgage rates in 2025?
While these rates might still appear high, it’s important to remember they remain below the 50-year average. If you’ve found your dream home, acting sooner rather than later might be wise. Potential increases in rates over the coming weeks, possibly influenced by presidential decisions on tariffs, are a factor to consider.
Current Mortgage Rates
Zillow’s latest data provides the following current mortgage rates:
- 30-year fixed: 6.72%
- 20-year fixed: 6.44%
- 15-year fixed: 5.98%
- 5/1 ARM: 6.65%
- 7/1 ARM: 6.61%
- 30-year VA: 6.18%
- 15-year VA: 5.57%
- 5/1 VA: 6.08%
- 30-year FHA: 6.29%
These figures represent national averages rounded to the nearest hundredth. Remember that individual rates can vary.
Current Mortgage Refinance Rates
Zillow’s data also shows the following refinance rates:
- 30-year fixed: 6.73%
- 20-year fixed: 6.21%
- 15-year fixed: 6.03%
- 5/1 ARM: 6.63%
- 7/1 ARM: 6.40%
- 30-year VA: 6.13%
- 15-year VA: 5.85%
- 5/1 VA: 6.05%
These are national averages rounded to the nearest hundredth. Refinance rates often exceed purchase rates, but this isn’t always the case.
Free Mortgage Calculator
Utilize Yahoo Finance’s free mortgage payment calculator to assess the impact of different mortgage rates and loan terms on your monthly payments. The calculator incorporates homeowners insurance, property taxes, and other relevant expenses for a comprehensive payment estimate.
How Mortgage Interest Rates Function
A mortgage interest rate represents the lender’s fee for borrowing money, expressed as a percentage. There are two primary rate types: fixed and adjustable.
Fixed-rate mortgages maintain a constant rate throughout the loan’s lifespan. For instance, a 30-year mortgage at 6% retains that rate for the entire 30 years unless refinanced or the property is sold.
Adjustable-rate mortgages (ARMs) lock in a rate for a set period, after which it adjusts periodically. A 7/1 ARM with a 6% introductory rate remains at 6% for seven years, then fluctuates annually for the remaining 23 years based on market conditions.
Initially, mortgage payments primarily cover interest. While the total monthly payment remains consistent, the proportion allocated to interest decreases over time as more goes towards the mortgage principal, the original borrowed amount.
Choosing the Right Mortgage Term Length
A 30-year fixed-rate mortgage offers lower monthly payments and predictable fixed rates. However, it carries a higher interest rate than shorter terms, resulting in significantly more interest paid over time.
A 15-year fixed-rate mortgage accelerates home loan repayment and saves on interest due to lower rates and a halved repayment period. The trade-off is higher monthly payments.
Adjustable-rate mortgages (ARMs) can be advantageous if you plan to sell before the introductory rate expires. ARMs typically start lower than fixed rates but fluctuate after a predetermined period. Currently, 5/1 and 7/1 ARM rates closely resemble 30-year fixed rates, so compare various options before choosing an ARM solely for a lower initial rate.
Analyzing Mortgage Rate Trends
While 30-year and 15-year fixed mortgage rates decreased this week, they had risen for five consecutive weeks prior. The overall trend indicates rising rates. Freddie Mac data reveals the 30-year fixed rate is 27 basis points higher and the 15-year rate is 20 basis points higher than last year.
While a potential decrease in mortgage rates is anticipated throughout 2025, the extent of the decline remains uncertain due to various economic factors. Rates are expected to remain above 6%.
Mortgage Interest Rates Today: FAQs
What’s happening with mortgage interest rates today?
Freddie Mac reports this week’s national average 30-year mortgage rate decreased by eight basis points to 6.96%, and the 15-year mortgage rate dropped by 11 basis points to 6.16%.
How low will mortgage rates go in 2025?
Fannie Mae and the Mortgage Bankers Association (MBA) project the 30-year mortgage rate to reach 6.50% by the end of 2025.
What’s the potential high for mortgage rates in 2025?
While potential fluctuations are possible, a decrease in mortgage rates by the end of 2025 is more likely than a significant increase.
