Mortgage rates have experienced another slight uptick this week. Freddie Mac reports that the average 30-year fixed rate has risen by two basis points to 6.93%, while the 15-year fixed rate has climbed one basis point to 6.14%.
Table Content:
- Current Mortgage Rates
- Current Mortgage Refinance Rates
- Related Resources:
- Utilizing a Mortgage Payment Calculator
- Understanding Mortgage Rates: Fixed vs. Adjustable
- Factors Influencing Mortgage Rate Determination
- Comparing 30-Year and 15-Year Fixed Mortgages
- Frequently Asked Questions about Mortgage Rates
Several factors contribute to these persistently high mortgage interest rates. Market anticipation of the impact of political changes on the U.S. economy and housing market plays a significant role. Additionally, mortgage rate trends often align with the 10-year Treasury yield, which has been on an upward trajectory for the past month. Furthermore, the Federal Reserve’s decision to hold steady on the federal funds rate contributes to this trend. Consequently, a significant drop in rates is unlikely in the near future. Prospective homebuyers hoping for lower rates may find that waiting is not the optimal strategy.
Current Mortgage Rates
Based on the latest Zillow data, here are the current national average mortgage rates, rounded to the nearest hundredth:
- 30-year fixed: 6.74%
- 20-year fixed: 6.69%
- 15-year fixed: 6.05%
- 5/1 ARM: 6.69%
- 7/1 ARM: 6.64%
- 30-year VA: 6.17%
- 15-year VA: 5.69%
- 5/1 VA: 6.18%
Remember that these are national averages; your individual rate may vary.
Learn more: 5 strategies to get the lowest mortgage rates
Current Mortgage Refinance Rates
Current national average mortgage refinance rates, according to Zillow data, are as follows:
- 30-year fixed: 6.79%
- 20-year fixed: 6.59%
- 15-year fixed: 6.07%
- 5/1 ARM: 6.19%
- 7/1 ARM: 6.78%
- 30-year VA: 6.18%
- 15-year VA: 5.84%
- 5/1 VA: 6.13%
These are also national averages rounded to the nearest hundredth. Refinance rates are often slightly higher than purchase mortgage rates, but as the data indicates, this is not always the case.
Related Resources:
- Best mortgage lenders of January 2025: Link
- When will the housing market crash again?: Link
- How much house can I afford? Affordability calculator: Link
Utilizing a Mortgage Payment Calculator
A mortgage payment calculator can be an invaluable tool for potential homebuyers. By inputting various mortgage rates, you can visualize their impact on your monthly payments. Factors like homeowners insurance, property taxes, private mortgage insurance, and HOA dues can be included to provide a comprehensive understanding of potential monthly housing costs.
Understanding Mortgage Rates: Fixed vs. Adjustable
A mortgage interest rate represents the cost of borrowing money from a lender. Fixed-rate mortgages maintain a consistent interest rate throughout the loan’s lifespan, providing payment stability. Conversely, adjustable-rate mortgages (ARMs) have an initial fixed rate that adjusts periodically based on market fluctuations.
Early in a mortgage term, a larger portion of the monthly payment is allocated to interest. Over time, this shifts, with more of the payment going towards the principal balance. Choosing between a fixed and adjustable rate depends on individual financial circumstances and risk tolerance.
Dig deeper: Adjustable-rate vs. fixed-rate mortgage — Which should you choose?
Factors Influencing Mortgage Rate Determination
Mortgage rates are influenced by a combination of controllable and uncontrollable factors. Borrowers can influence their rates by comparing lenders to find the best terms, improving their credit score, lowering their debt-to-income ratio, and making a larger down payment. However, broader economic conditions, which are beyond individual control, also significantly impact rates. A struggling economy often leads to lower rates to stimulate borrowing, while a strong economy may result in higher rates to curb spending.
Comparing 30-Year and 15-Year Fixed Mortgages
30-year and 15-year fixed-rate mortgages are two prevalent mortgage options. 30-year mortgages offer lower monthly payments but accrue more interest over the longer term. Conversely, 15-year mortgages have higher monthly payments but result in significant interest savings and faster loan payoff. The best choice depends on individual budgetary constraints and long-term financial goals.
Frequently Asked Questions about Mortgage Rates
This section addresses common queries about mortgage rates:
What bank is offering the lowest mortgage rates?
Historically, banks like Citibank, Wells Fargo, and USAA have offered competitive rates. However, it’s crucial to compare offers from various lenders, including credit unions and mortgage specialists.
Is 2.75% a good mortgage rate?
While 2.75% is an exceptionally low rate, achieving it in the current market is unlikely unless assuming an existing mortgage with that rate.
What is the lowest-ever mortgage rate?
The historical low for a 30-year fixed mortgage rate was 2.65% in January 2021. A return to such low rates is improbable in the foreseeable future.
At what rate should you refinance your mortgage?
Refinancing is generally considered advantageous when securing a rate at least 1% to 2% lower than your current rate, considering closing costs and break-even points.
