Mortgage rates are testing the 6% level again. According to Zillow, the average 30-year fixed mortgage rate is 6.00%, down 11 basis points. The 15-year fixed rate is 5.44%down eight basis points.
Realtor.com’s latest housing report expects average 30-year mortgage rates to remain near 6.3% through 2026, “as slowing economic growth and the end of the Fed’s quantitative tightening offset rising U.S. government debt and inflationary pressures that are expected to be temporary.”
Here are the current mortgage rates, according to the latest Zillow data:
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30 years fixed: 6.00%
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20 years fixed: 5.88%
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15 years fixed: 5.44%
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5/1 ARM: 6.14%
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7/1 ARM: 6.07%
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VA for 30 years: 5.67%
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VA for 15 years: 5.34%
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5/1 VA: 5.43%
Remember, these are national averages and rounded to the nearest hundredth.
Here are 8 strategies to get the lowest possible mortgage rate.
Here are today’s refinance mortgage interest rates, according to the latest Zillow data:
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30 years fixed: 6.15%
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20 years fixed: 6.01%
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15 years fixed: 5.64%
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5/1 ARM: 6.46%
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7/1 ARM: 6.71%
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VA for 30 years: 5.61%
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VA for 15 years: 5.39%
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5/1 VA: 5.29%
As with purchase mortgage rates, these are national averages that we’ve rounded to the nearest hundredth. Refinance rates can be higher than purchase mortgage rates, but that’s not always the case.
Use the mortgage calculator below to see how different mortgage rates will affect your monthly payments.
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You can bookmark the Yahoo Finance mortgage payment calculator and keep it handy for future use as you shop for homes and lenders. Be sure to use the drop-down menu to include private mortgage insurance costs and HOA fees if applicable. 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 the fee charged by a lender for lending money, expressed as a percentage. There are two basic types of mortgage rates: fixed and adjustable rates.
A fixed rate mortgage locks in your rate for the duration of your loan. For example, if you get a 30-year mortgage with an interest rate of 6%, your rate will remain at 6% for the entire 30 years. (Unless you’re refinancing or selling your home.)
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 an intro rate of 6%. Your rate would be 6% for the first five years, and then the rate would increase or decrease once a year for the last 25 years of your term. Whether your rate increases or decreases depends on several factors, such as the U.S. economy and housing market.
At the beginning of the mortgage term, most of the monthly payment goes towards interest. Over time, less of your payment goes toward interest and more toward the mortgage principal, or the amount you originally borrowed.
Two categories determine mortgage rates: those you can control and those you can’t.
What factors can you control? First, you can compare the best mortgage lenders to find the one that offers you the lowest rate and fees.
Second, lenders typically give lower rates to people with higher credit scores, lower debt-to-income (DTI) ratios, and hefty down payments. If you can save more or pay off debt before securing 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 ways the economy affects mortgage rates is long, but here are the basics. If the economy — think employment rates, for example — is struggling, mortgage rates fall to encourage lending, which helps stimulate the economy. If the economy is strong, mortgage rates rise to temper spending.
All other things being equal, refinance mortgage rates are usually slightly 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 it has relatively low monthly payments. But it comes with a higher interest rate than shorter terms, and because you accumulate interest over three decades, you’ll pay a lot of interest over the long term.
A 15-year mortgage can be a good choice because it has a lower rate than you’ll get with longer terms, so you’ll pay less interest over the years. You’ll also pay off your mortgage much faster. But your monthly payments will be higher because you pay off 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 2024 Home Mortgage Disclosure Act (HMDA) data, some of the banks with the lowest average mortgage rates are Bank of America and Citibank. However, it’s a good idea to shop around for the best rate not just with banks, but also with credit unions and mortgage companies.
Yes, 2.75% is a fantastic mortgage rate. You’re unlikely to get a rate of 2.75% in today’s market unless you’re taking an assumable mortgage from a seller who locked in that rate in 2020 or 2021 when rates were at their lowest.
According to Freddie Mac, the lowest 30-year fixed mortgage rate was 2.65%. This was the national average in January 2021. It is extremely unlikely that rates will fall below 3% again anytime soon.
Some experts say it’s worth refinancing when you can lock in a rate that’s 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 your break even would be after paying your refinance closing costs.