Mortgage Rates Take a Slight Dip, But What’s Next?
As the market waits with bated breath for Fed Chair Jerome Powell’s comments on the future of the federal funds rate, mortgage rates have inched down, but only slightly. According to Zillow, the 30-year fixed mortgage rate has decreased by two basis points to 6.65%, while the 15-year interest rate is down one basis point to 5.96%.
Current Mortgage Rates: A National Snapshot
Here are the current mortgage rates, based on the latest Zillow data:
- 30-year fixed: 6.65%
- 20-year fixed: 6.41%
- 15-year fixed: 5.96%
- 5/1 ARM: 6.90%
- 7/1 ARM: 6.87%
- 30-year VA: 6.09%
- 15-year VA: 5.53%
- 5/1 VA: 6.04%
Mortgage Refinance Rates: What You Need to Know
Meanwhile, mortgage refinance rates are often higher than rates for buying a house, although that’s not always the case. Here are the current mortgage refinance rates, according to Zillow:
- 30-year fixed: 6.69%
- 20-year fixed: 6.44%
- 15-year fixed: 6.02%
- 5/1 ARM: 7.00%
- 7/1 ARM: 7.42%
- 30-year VA: 6.09%
- 15-year VA: 5.67%
- 5/1 VA: 6.01%
- 30-year FHA: 6.21%
- 15-year FHA: 6.13%
The Pros and Cons of 30-Year Fixed Mortgages
A 30-year fixed mortgage has its advantages, including lower monthly payments and predictable payments. However, the main disadvantage is the higher mortgage interest paid over the life of the loan.
The Alternative: 15-Year Fixed Mortgages
On the other hand, 15-year fixed mortgages come with lower interest rates and the potential to save hundreds of thousands of dollars in interest over the course of the loan. However, monthly payments will be higher due to the shorter repayment period.
Adjustable-Rate Mortgages: Weighing the Risks and Rewards
Adjustable-rate mortgages offer lower introductory rates, but the risk of rate increases later on can be unpredictable. If you plan to move before the intro-rate period ends, an ARM might be a good option. However, it’s essential to consider the potential risks and rewards before making a decision.
What’s Ahead for Mortgage Rates?
While mortgage rates may decrease by the end of 2025, any declines will likely be gradual. In the meantime, rates could get higher before they get lower. By understanding the factors that affect mortgage rates, such as inflation and the Fed, you’ll be better prepared to make informed decisions when buying or refinancing a home.
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