Mortgage Rates on the Rise: What You Need to Know
As we kick off 2025, mortgage rates are trending upward. According to recent data from Zillow, the 30-year fixed mortgage rate has increased by six basis points to 6.70%, while the 20-year fixed rate has risen by eight basis points to 6.56%, and the 15-year fixed rate has climbed by seven basis points to 6.10%.
Understanding the Current Mortgage Rate Landscape
While mortgage interest rates are expected to decrease throughout 2025, the declines are likely to be gradual and less pronounced than initially thought. If you’re in the market to buy a house, there are two key strategies to secure the lowest rate possible: improve your financial health by paying down debt or boosting your credit score, and shop around for mortgage lenders to find the best fit for your needs.
Current Mortgage Rates
Here are the current mortgage rates, based on the latest Zillow data:
- 30-year fixed: 6.70%
- 20-year fixed: 6.56%
- 15-year fixed: 6.10%
- 5/1 ARM: 6.71%
- 7/1 ARM: 6.63%
- 30-year VA: 6.14%
- 15-year VA: 5.74%
- 5/1 VA: 6.25%
Mortgage Refinance Rates
If you’re considering refinancing your mortgage, here are the current rates:
- 30-year fixed: 6.69%
- 20-year fixed: 6.60%
- 15-year fixed: 6.05%
- 5/1 ARM: 6.04%
- 7/1 ARM: 6.64%
- 30-year VA: 6.03%
- 15-year VA: 5.80%
- 5/1 VA: 6.31%
The Pros and Cons of 30-Year Fixed Mortgages
A 30-year fixed mortgage offers lower monthly payments and predictable payments, but comes with higher interest rates and more interest paid over the life of the loan.
The Pros and Cons of 15-Year Fixed Mortgages
On the other hand, a 15-year fixed mortgage offers lower interest rates and less interest paid over the life of the loan, but comes with higher monthly payments.
Adjustable-Rate Mortgages: Weighing the Risks and Rewards
Adjustable-rate mortgages offer lower introductory rates, but come with the risk of rate increases later on. If you plan to move before the intro-rate period ends, an ARM might be a good option.
Regional Variations in Mortgage Rates
Keep in mind that mortgage rates can vary depending on where you live. Cities with high costs of living may have higher rates.
Securing a Low Mortgage Refinance Rate
To refinance into a lower rate, focus on improving your credit score, lowering your debt-to-income ratio, and considering a shorter term.
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