Current 30-year fixed mortgage rates have fallen, according to data from Zillow. It fell by eight basis points 6.44%. However, rates for many other mortgage terms have increased. For example, the 15-year fixed rate has risen by 10 basis points 5.77%and the 5/1 ARM rate is up five basis points 6.67%.
On Thursday, the Federal Reserve announced that it will cut the Federal Funds Rate again (after cutting it by 50 basis points at its September meeting). Why aren’t mortgage rates falling across the board in response? First, because the Fed only cut rates by 25 basis points, which is considered a small decline. Second, most economists expected this reduction, so it was already included in current mortgage rates. Third, many things other than the Fed determine mortgage rates – for example, the 10-year Treasury yield, which has been rising for weeks.
Read more: How is the mortgage interest determined? It’s complicated.
Here are the current mortgage rates, according to the latest Zillow data:
-
30 years fixed: 6.44%
-
20 years fixed: 6.31%
-
15 years fixed: 5.77%
-
5/1ARM: 6.67%
-
7/1ARM: 6.64%
-
30 years VA: 5.87%
-
15 years VA: 5.51%
-
5/1 VA: 5.97%
-
30 years FHA: 5.61%
-
15-year FHA: 5.55%
-
5/1 FHA: 4.88%
Please note that these are national averages, rounded to the nearest hundredth.
More information: 5 strategies to get the lowest mortgage interest rate
Here are the current mortgage interest rates, according to the latest data from Zillow:
-
30 years fixed: 6.50%
-
20 years fixed: 6.27%
-
15 years fixed: 5.83%
-
5/1ARM: 6.71%
-
7/1ARM: 6.81%
-
30 years VA: 5.77%
-
15 years VA: 5.40%
-
5/1 VA: 5.75%
Again, the figures provided are national averages, rounded to the nearest hundredth. Mortgage refinancing rates are often higher than the rates when you buy a home, although that is not always the case.
Use Yahoo Finance’s free mortgage calculator to see how different interest rates and terms affect your monthly mortgage payment. It also shows how home price and down payment amount play a role.
Our calculator includes homeowners insurance and property taxes in your monthly payment estimate. You even have the option to enter costs for private mortgage insurance (PMI) and HOA dues if they apply to you. This data results in a more accurate estimate of monthly payments than if you simply calculated the principal and interest of your mortgage.
There are two main advantages to a 30-year fixed mortgage: your payments are lower and your monthly payments are predictable.
A mortgage with a fixed interest rate of 30 years has relatively low monthly costs, because you spread your repayment over a longer period than with, for example, a mortgage with a term of 15 years. Your payments are predictable because, unlike an adjustable-rate mortgage (ARM), your interest rate won’t change from year to year. Most years, the only things that can affect your monthly payment are any changes in your homeowner’s insurance or property taxes.
The biggest disadvantage of a 30-year fixed mortgage rate is the mortgage interest rate, both in the short and long term.
A 30-year fixed term has a higher rate than a shorter fixed term, and is higher than the introductory rate for a 30-year ARM. The higher your rate, the higher your monthly payment. You also pay much more interest over the term of your loan due to both the higher rate and the longer term.
The advantages and disadvantages of a mortgage interest rate with a fixed term of 15 years are in principle replaced by the interest rate with a term of 30 years. Yes, your monthly payments are still predictable, but another benefit is that shorter terms come with lower interest rates. In addition, you pay off your mortgage 15 years earlier. So you could potentially save hundreds of thousands of dollars in interest over the course of your loan.
However, because you pay off the same amount in half the time, your monthly costs are higher than if you opt for a 30-year term.
Dig deeper: Mortgages with a term of 15 years versus 30 years
Variable rate mortgages fix your interest rate for a predetermined period of time and then change it periodically. For example, with a 5/1 ARM, your rate stays the same for the first five years and then goes up or down once a year for the remaining 25 years.
The main benefit is that the introductory rate is usually lower than what you get with a 30-year fixed rate, so your monthly payments will be lower. (However, current average rates do not necessarily reflect this; in some cases, fixed rates are even lower. Check with your lender before deciding between a fixed or adjustable rate.)
With an ARM, you have no idea what the mortgage interest rate will be once the interest rate period ends, so you run the risk of your interest rate rising later. This can end up costing you more, and your monthly payments will be unpredictable from year to year.
But if you plan to move before the interest rate lock-in period is over, you can enjoy the benefits of a low interest rate without the risk of a rate hike later.
More information: Variable rate mortgage versus fixed rate mortgage
First of all, now is a relatively good time to buy a home compared to years past. Mortgage rates are significantly lower than in November last year, and home prices are no longer rising as they were during the height of the COVID-19 pandemic. So if you want or need to buy a home soon, you should feel pretty good about the current climate.
On the other hand, rates have increased in recent weeks. If you’re not in a hurry to buy, it’s best to wait until 2025, when mortgage rates are expected to be lower. Keep in mind that no one has a crystal ball on what mortgage rates will do, so there is no guarantee that rates will drop in 2025. And if interest rates fall, you’ll likely face more competition and perhaps even higher prices. the question.
Read more: What is more important: your home price or mortgage interest?
According to Zillow, the national average 30-year mortgage rate is currently 6.44%. But keep in mind that averages can vary depending on where you live. For example, if you buy in a city with a high cost of living, the rates may be higher.
Mortgage rates are not necessarily expected to decline through the remainder of 2024, but they are likely to decline in 2025.
Overall, mortgage rates have fallen over the past year. However, they have increased in recent weeks. Today, some rates have increased while others have decreased.
In many ways, securing a low mortgage refinance rate is similar to when you bought your home. Try to improve your credit score and lower your debt-to-income ratio (DTI). Refinancing on a shorter term will also get you a lower rate, although your monthly mortgage payments will be higher.
