Mortgage Rates on the Rise: What You Need to Know
Rates Inch Upward
Mortgage rates have taken a slight uptick this week, with the 30-year fixed rate increasing by two basis points to 6.93% and the 15-year fixed rate rising by one basis point to 6.14%. While the week-over-week increases are minor, national mortgage interest rates are now higher than they were this time last year.
The Bigger Picture
Both the 30-year and 15-year mortgage rates have increased by 27 basis points since last January. Unfortunately, it’s unlikely that rates will drop in the next month or so. Economists don’t foresee the Federal Reserve cutting the federal funds rate at its upcoming meeting, and investors are waiting to see how a second presidential term will affect the economy.
Shopping for a Mortgage Lender
If you’re trying to snag a low home loan rate soon, it’s better to shop around for a mortgage lender than rely on rates decreasing. With rates on the rise, it’s essential to explore your options and find the best deal for your situation.
Current Mortgage Rates
According to the latest Zillow data, here are the current mortgage rates:
- 30-year fixed: 6.72%
- 20-year fixed: 6.48%
- 15-year fixed: 6.04%
- 5/1 ARM: 6.72%
- 7/1 ARM: 6.71%
- 30-year VA: 6.18%
- 15-year VA: 5.65%
- 5/1 VA: 6.20%
Mortgage Refinance Rates
Here are today’s mortgage refinance rates, according to the latest Zillow data:
- 30-year fixed: 6.78%
- 20-year fixed: 6.64%
- 15-year fixed: 6.07%
- 5/1 ARM: 6.81%
- 7/1 ARM: 6.67%
- 30-year VA: 6.13%
- 15-year VA: 5.78%
- 5/1 VA: 5.90%
Understanding Mortgage Rates
A mortgage interest rate is a fee for borrowing money from your lender, expressed as a percentage. You can choose from two types of rates: fixed or adjustable. A fixed-rate mortgage locks in your rate for the entire life of your loan, while an adjustable-rate mortgage locks in your rate for a predetermined amount of time and then changes it periodically.
Choosing the Right Mortgage
A 30-year fixed-rate mortgage is a good choice if you want a lower mortgage payment and the predictability that comes with having a fixed rate. However, you’ll pay more in interest over the years. A 15-year fixed-rate mortgage can help you pay off your home loan quickly and save money on interest, but you’ll need to be sure you can comfortably afford the higher monthly payments.
The Future of Mortgage Rates
Mortgage rates will likely decrease throughout 2025, but due to the uncertainty of how the economy will react to the upcoming presidential term, it’s unclear how drastically they will fall. We can expect to see rates stay above 6%.
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