Mortgage Rates: What You Need to Know
Rates Take a Slight Dip
Mortgage rates have decreased slightly, with the 30-year fixed rate dropping to 6.67%, the 15-year fixed rate falling to 6.00%, and the 5/1 ARM rate declining to 6.68%. This fluctuation is likely to continue as the Federal Reserve prepares to make a decision on the federal funds rate and the US economy responds to Trump’s presidency.
Current Mortgage Rates
Here are the current mortgage rates, according to Zillow data:
- 30-year fixed: 6.67%
- 20-year fixed: 6.51%
- 15-year fixed: 6.00%
- 5/1 ARM: 6.68%
- 7/1 ARM: 6.65%
- 30-year VA: 6.08%
- 15-year VA: 5.63%
- 5/1 VA: 6.23%
Understanding Mortgage Refinance Rates
Mortgage refinance rates tend to be slightly higher than purchase rates. Here are the current refinance rates, according to Zillow data:
- 30-year fixed: 6.65%
- 20-year fixed: 6.62%
- 15-year fixed: 5.89%
- 5/1 ARM: 6.04%
- 7/1 ARM: 6.68%
- 30-year VA: 6.05%
- 15-year VA: 5.77%
- 5/1 VA: 5.97%
The Impact of Mortgage Terms
A mortgage calculator can help you understand how different mortgage term lengths and interest rates will affect your monthly payments. For example, a 30-year mortgage with a 6.67% rate would result in a monthly payment of approximately $1,930, with a total interest payment of $394,752 over the life of the loan.
The Benefits of a 15-Year Mortgage
A 15-year mortgage comes with a lower interest rate than a 30-year term, but higher monthly payments. With a 15-year mortgage, you’ll pay off your loan 15 years sooner, saving on interest over time.
Adjustable-Rate Mortgages: What You Need to Know
Adjustable-rate mortgages offer a lower initial rate, but the risk of increased rates later on. They may be a good fit if you plan to sell your home before the rate-lock period ends.
Getting the Best Mortgage Rate
To secure the best mortgage rate, shop around for lenders, improve your credit score, and consider paying for discount points at closing. Additionally, consider temporary interest rate buydowns, but weigh the costs against the potential savings.
The Role of the Federal Reserve
The Federal Reserve’s decisions on the federal funds rate can impact mortgage rates. By understanding how the Fed’s actions affect interest rates, you can make informed decisions about buying or refinancing a home.
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