Mortgage Rates on the Rise: What You Need to Know
Current Mortgage Rates: A Snapshot
As of now, the 30-year fixed mortgage rate has climbed to 6.88%, while the 15-year fixed rate has increased to 6.16%. Adjustable-rate mortgages (ARMs) have seen a mixed bag, with some rates decreasing and others remaining steady. However, ARM rates are still comparable to or higher than fixed rates, making them less appealing.
Understanding Your Mortgage Options
When shopping for a mortgage lender, it’s essential to explore your options. You may qualify for both conventional and FHA loans, for instance. Discuss the pros and cons of each with your loan officer to determine which is the better deal for you in the short and long term.
National Averages: A Closer Look
Here are the current mortgage rates, based on our latest data:
- 30-year fixed: 6.88%
- 20-year fixed: 6.76%
- 15-year fixed: 6.16%
- 5/1 ARM: 6.81%
- 7/1 ARM: 6.98%
- 30-year VA: 6.36%
- 15-year VA: 5.75%
- 5/1 VA: 6.50%
- 30-year FHA: 6.33%
- 5/1 FHA: 6.39%
Refinancing: What You Need to Know
Refinance rates are typically higher than purchase rates. Our calculator can help you navigate the complexities of refinancing and determine how different mortgage term lengths and interest rates will impact your monthly payments.
The 15-Year vs. 30-Year Mortgage Conundrum
When comparing 15- versus 30-year mortgage rates, remember that the shorter term will save you money on interest in the long run. However, your monthly payments will be higher because you’re paying off the same loan amount in half the time.
The Impact of the Federal Reserve
The Federal Reserve’s decision on the federal funds rate has a significant impact on mortgage rates. In 2024, mortgage rates trended downward before the September Federal Reserve meeting, when the central bank announced a 50-basis-point slash to the federal funds rate. Since then, mortgage rates have increased or held steady.
What’s Ahead for Mortgage Rates?
Mortgage rates will likely gradually drop throughout 2025, but they’re unlikely to plummet anytime soon. The trajectory of future mortgage rates will largely depend on the Federal Reserve’s decision on whether or not to cut the federal funds rate at its upcoming meetings.
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