Mortgage rates are testing the 6% level again. According to Zillow, the average 30-year fixed mortgage rate is 6.00%, down 11 basis points. The 15-year fixed interest rate is 5.44%down eight basis points.
Realtor.com’s latest housing report projects average 30-year mortgage rates will remain near 6.3% through 2026 “as slower economic growth and the end of the Fed’s quantitative tightening offset rising U.S. government debt and inflationary pressures that are expected to be only temporary.”
Here are the current mortgage rates, according to the latest Zillow data:
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30 years fixed: 6.00%
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20 years fixed: 5.88%
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15 years fixed: 5.44%
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5/1 Arm: 6.14%
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7/1 Arm: 6.07%
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30 years VA: 5.67%
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15 years VA: 5.34%
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5/1 Virginia: 5.43%
Remember, these are national averages and rounded to the nearest percentile.
Here are 8 strategies for getting the lowest mortgage rate possible.
Here are today’s mortgage refinance rates, according to the latest Zillow data:
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30 years fixed: 6.15%
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20 years fixed: 6.01%
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15 years fixed: 5.64%
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5/1 Arm: 6.46%
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7/1 Arm: 6.71%
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30 years VA: 5.61%
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15 years VA: 5.39%
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5/1 Virginia: 5.29%
As with buyout mortgage rates, these are national averages and we’ve rounded to the nearest hundredth. Refinancing rates can be higher than purchase mortgage rates, but that’s not always the case.
Use the mortgage calculator below to see how different mortgage rates will affect your monthly payment.
You can bookmark the Yahoo Finance Mortgage Payment Calculator and keep it in a convenient place for future use when shopping for a home and with a lender. Be sure to include private mortgage insurance fees and HOA fees using the drop-down menus, if applicable to you. These monthly costs, along with your mortgage principal and interest rate, will give you a realistic idea of your monthly payments.
A mortgage interest rate is the fee, expressed as a percentage, that a lender charges for borrowing money. There are two basic types of mortgage rates: fixed and adjustable.
A fixed-rate mortgage locks in your interest rate for the entire term of your loan. For example, if you get a 30-year mortgage with an interest rate of 6%, your interest rate will remain at 6% for the entire 30 years. (Unless you refinance or sell your home.)
An adjustable-rate mortgage keeps the interest rate constant for the first few years and then changes it periodically. Let’s say you get a 5/1 ARM with an introductory rate of 6%. The tax rate is 6% for the first five years, then increases or decreases annually for the last 25 years of the term. Whether your interest rate goes up or down depends on several factors, such as the economy and the U.S. housing market.
At the beginning of your mortgage term, the majority of your monthly payment goes toward interest. Over time, less of your payment goes toward interest and more goes toward paying down the mortgage principal, or the amount you originally borrowed.
Mortgage interest rates are determined by two categories: those you can control and those you can’t.
What factors can you control? First, you can compare the best mortgage lenders to find the one that offers you the lowest rates and fees.
Second, lenders typically offer lower interest rates to people with higher credit scores, lower debt-to-income (DTI) ratios, and larger down payments. A lender may give you a better interest rate if you can save more or pay off debt before getting a mortgage.
What factors are beyond your control? In short, economics.
There are many ways the economy affects mortgage rates, but here are the basic details. If the economy — such as employment rates — struggles, mortgage rates fall to encourage borrowing, which helps boost the economy. If the economy is strong, mortgage rates rise to curb spending.
All else being equal, mortgage refinance rates are typically slightly higher than purchase rates. So don’t be surprised if your refinance rate is higher than you expected.
The two most common mortgage terms are the 30-year and 15-year fixed-rate mortgages. Both lock in the interest rate for the entire term of the loan.
The 30-year mortgage is popular because its monthly payments are relatively low. But it has a higher interest rate than short-term interest rates, and because you’re accruing interest over thirty years, you’ll pay a lot in interest in the long run.
A 15-year mortgage can be a good choice because it has a lower interest rate than a longer-term mortgage, so you pay less in interest over the years. You’ll also pay off your mortgage faster. But your monthly payments will be higher because you’ll pay off the same loan amount in half the time.
Basically, a 30-year mortgage is cheaper month-over-month, while a 15-year mortgage is cheaper in the long run.
Banks with the lowest median mortgage rates include Bank of America and Citibank, according to Home Mortgage Disclosure Act of 2024 (HMDA) data. However, it’s best to shop around not only with banks, but also with credit unions and companies that specialize in mortgages, to get the best rates.
Yes, 2.75% is a very good mortgage rate. You’re unlikely to get a 2.75% rate in today’s market unless you get an affordable mortgage from a seller who locked in that rate in 2020 or 2021, when interest rates were at an all-time low.
The lowest ever 30-year fixed mortgage rate is 2.65%, according to Freddie Mac. This is the national average for January 2021. It is extremely unlikely that interest rates will fall below 3% again anytime soon.
Some experts say refinancing is worth it when you can lock in an interest rate that’s 2 percent lower than your current mortgage rate. Others say 1% is the magic number. It all depends on what your financial goals are when you refinance, and what your break-even point is after paying the refinance closing costs.
