Mortgage Rates: What You Need to Know
Rates Take a Dip, But Don’t Expect a Steep Drop
The average 30-year fixed interest rate has decreased by five basis points to 6.67%, while the 15-year fixed rate has dropped by four basis points to 5.95%. Although mortgage rates are still high, this could be a good time to buy a house, as waiting for lower rates might not be very helpful.
Current Mortgage Rates
Here are the current mortgage rates, according to our latest data:
- 30-year fixed: 6.67%
- 20-year fixed: 6.45%
- 15-year fixed: 5.95%
- 5/1 ARM: 6.94%
- 7/1 ARM: 6.91%
- 30-year VA: 6.12%
- 15-year VA: 5.56%
- 5/1 VA: 6.16%
- 30-year FHA: 6.33%
- 5/1 FHA: 6.38%
Refinance Rates: Hold On for a Better Deal
If you’re looking to refinance your existing mortgage into a better rate, you may want to hold out for a while longer. Refinance rates are usually higher than purchase rates, and the current rates are:
- 30-year fixed: 6.67%
- 20-year fixed: 6.46%
- 15-year fixed: 5.92%
- 5/1 ARM: 7.24%
- 7/1 ARM: 7.45%
- 30-year VA: 6.10%
- 15-year VA: 5.72%
- 5/1 VA: 6.04%
- 5/1 FHA: 6.50%
Understanding Mortgage Terms
A mortgage calculator can help you see how various mortgage term lengths and interest rates will affect your monthly payments. For example, with a $400,000 mortgage with a 30-year term and a 6.67% rate, you’ll make a monthly payment of about $2,573 toward your mortgage principal and interest. However, you’ll end up paying $526,337 in interest over the years.
Fixed-Rate vs. Adjustable-Rate Mortgages
With a fixed-rate mortgage, your rate is locked in from day one. However, you will get a new rate if you refinance your mortgage. An adjustable-rate mortgage keeps your rate the same for a set period of time, then changes depending on several factors.
The Impact of the Federal Reserve
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 2025 meetings. When economists expect a Fed rate cut, mortgage interest rates typically decrease ahead of the meeting rather than after.
What to Expect in 2025
Mortgage rates will probably gradually drop throughout 2025, but they’re unlikely to plummet anytime soon. Depending on what happens with the economy, inflation, and the Fed, any decreases may be relatively small.
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