After five consecutive weeks of increases, mortgage rates are finally falling today. According to Freddie Mac, the average 30-year fixed mortgage rate fell eight basis points to 6.96%and the average 15-year rate fell by 11 basis points to 6.16%.
It is not known whether these declines will continue. President Trump has discussed imposing tariffs, which could push rates back up. You may want to lock in a mortgage rate now to avoid higher rates in the coming weeks.
Dig Deeper: Mortgage rates fall as Trump suspends rates in first days in office
Here are the current mortgage rates, according to the latest Zillow data:
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Fixed over 30 years: 6.66%
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Fixed over 20 years: 6.55%
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15 years fixed: 5.96%
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ARM 5/1: 6.66%
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ARM 7/1: 6.62%
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VA over 30 years: 6.11%
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VA over 15 years: 5.54%
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5/1 VA: 6.11%
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FHA 30 years: 6.29%
Remember, these are national averages rounded to the nearest hundredth.
Learn more: 5 Strategies for Getting the Lowest Mortgage Rates
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Here are today’s mortgage refinance interest rates, according to the latest data from Zillow:
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Fixed over 30 years: 6.73%
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Fixed over 20 years: 6.44%
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Fixed over 15 years: 6.01%
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ARM 5/1: 7.76%
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ARM 7/1: 6.55%
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VA over 30 years: 6.11%
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VA over 15 years: 5.86%
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5/1 VA: 6.09%
As with purchase mortgage rates, these are national averages that we have rounded to the nearest hundredth. Refinancing rates can be higher than purchase mortgage rates, but as you can see above, that’s not always the case.
Yahoo Finance offers a free mortgage payment calculator to help you see how different mortgage rates impact your monthly payments.
Our calculator goes even further by including factors like home insurance and property taxes in your calculation. You can even add private mortgage insurance fees and HOA dues if they apply to you. These monthly expenses, along with your mortgage principal and interest rate, will give you a realistic idea of what your monthly payment could be.
A mortgage interest rate is a fee for borrowing money from your lender, expressed as a percentage. There are two main types of mortgage rates: fixed rates and variable rates.
A fixed-rate mortgage locks in your rate for the life of your loan. For example, if you get a 30-year mortgage with a 6% interest rate, your rate will stay at 6% for 30 years. (Unless you are refinancing or selling the house.)
An adjustable rate mortgage keeps your rate the same for the first few years, then changes it periodically. Let’s say you get a 5/1 ARM with a 6% launch rate. Your rate would be 6% for the first five years, then it would increase or decrease once a year for the last 25 years of your term. Whether your rate goes up or down depends on several factors, such as the economy and the U.S. housing market.
At the beginning of your mortgage term, most of your monthly payment goes toward interest. Over time, less of your payment goes toward interest and more toward the mortgage principal, or the amount you originally borrowed.
Dig Deeper: Variable rate or fixed rate mortgage: which should you choose?
Two categories determine mortgage rates: those you can control and those you can’t control.
What factors can you control? First, you can compare the best mortgage lenders to find the one that offers you the lowest rates and fees.
Second, lenders generally give lower rates to people with higher credit scores, lower debt-to-income (DTI) ratios, and sizable down payments. If you can save more or pay off debt before getting a mortgage, a lender will likely offer you a better interest rate.
What factors can’t you control? In short, the economy.
The list of how the economy impacts mortgage rates is long, but here are the basic details. If the economy – think of employment rates, for example – is struggling, mortgage rates fall to encourage borrowing, which helps stimulate the economy. If the economy is strong, mortgage rates rise to moderate spending.
All things being equal, mortgage refinance rates are generally a bit higher than purchase rates. So don’t be surprised if your refinancing rate is higher than you expected.
Two of the most common mortgage terms are 30-year and 15-year fixed-rate mortgages. Both lock in your rate for the entire term of the loan.
A 30-year mortgage is popular because its monthly payments are relatively low. But that comes with a higher interest rate than shorter terms, and because you’re accumulating interest for three decades, you’ll pay a lot of interest in the long run.
A 15-year mortgage can be attractive because the rate is lower than what you’ll get with longer terms, so you’ll pay less interest over the years. You will also pay off your mortgage much faster. But your monthly payments will be higher because you repay the same loan amount in half the time.
Basically, 30-year mortgages are more affordable month to month, while 15-year mortgages are cheaper in the long run.
According to 2023 Home Mortgage Disclosure Act (HMDA) data, some of the banks with the lowest median mortgage rates are Citibank, Wells Fargo, and USAA. However, it’s a good idea to shop around for the best rate not only from banks, but also from credit unions and specialist mortgage companies.
Yes, 2.75% is a fantastic mortgage rate. You’re unlikely to get a 2.75% rate in today’s market unless you take out an assumable mortgage from a seller who locked in that rate in 2020 or 2021, when rates were at historic lows .
According to Freddie Mac, the lowest 30-year fixed mortgage rate ever recorded was 2.65%. This was the national average in January 2021. It is extremely unlikely that rates will fall this low again anytime soon.
Some experts say it’s worth refinancing when you can lock in a rate 2% lower than your current mortgage rate. Others say 1% is the magic number. It all depends on your financial goals when refinancing and when you will break even after paying the refinancing closing costs.
