Mortgage rates have increased today. According to Zillow, the average 30-year fixed interest rate is up six basis points 6.78%and the 15-year fixed rate has risen three basis points to 6.07%.
You might be thinking, “Wait, weren't rates supposed to drop in 2025?” Yes, that was the expectation for a long time — and eventually, mortgage rates will probably fall by the end of the year. But many factors are keeping rates high for now. yesterday, The US Bureau of Labor Statistics released the December jobs reportwhich showed that many more jobs were created last month than predicted. This data has many economists suspecting that the Federal Reserve will not cut the federal funds rate at its January or March meetings.
If you are in no rush to buy a home, you could wait until the end of 2025 or into 2026 to start house hunting. But if you want to buy sooner rather than later, you may want to go ahead and start the process. After all, mortgage rates shouldn't be plummeting anytime soon.
Dig deeper: What determines mortgage rates? It's complicated.
Here are the current mortgage rates, according to the latest Zillow data:
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30 years fixed: 6.78%
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20 years fixed: 6.55%
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15 years fixed: 6.07%
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5/1 ARM: 7.16%
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7/1 ARM: 7.08%
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VA 30 years: 6.20%
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VA 15 years: 5.68%
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5/1 VA: 6.36%
Remember, these are national averages and rounded to the nearest hundredth.
Learn more: 5 strategies for getting the lowest mortgage rates
Here are today's mortgage refinance rates, according to the latest Zillow data:
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30 years fixed: 6.84%
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20 years fixed: 6.66%
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15 years fixed: 6.15%
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5/1 ARM: 7.50%
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7/1 ARM: 7.44%
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VA 30 years: 6.13%
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VA 15 years: 5.86%
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5/1 VA: 6.05%
Again, the numbers provided are national averages rounded to the nearest hundredth. Mortgage refinance rates are often higher than rates when you buy a house, although that's not always the case.
Use Yahoo Finance for free mortgage calculator to see how varying interest rates and term lengths will affect your monthly mortgage payment. It also shows how the price of the home and the amount of the down payment factor into things.
Our calculator includes homeowners insurance and property taxes in your monthly payment estimate. You even have the option to enter costs for private mortgage insurance (PMI) and home owner association charges if those apply to you. These details lead to a more accurate monthly payment estimate than if you calculated your mortgage principal and interest.
There are two main advantages to a 30-year fixed mortgage: Your payments are lower, and your monthly payments are predictable.
A 30-year fixed rate mortgage has relatively low monthly payments because you spread your repayment over a longer period of time than with, say, a 15-year mortgage. Your payments are predictable because, unlike an adjustable rate mortgage (ARM), your rate is not going to change from year to year. In most cases, the only things that could affect your monthly payment are any changes to your home owners insurance or property taxes.
The main disadvantage to 30 year fixed mortgage rates is mortgage interest – in the short and long term.
A 30-year fixed term comes with a higher rate than a shorter fixed term, and is higher than the intro rate for a 30-year ARM. The higher your rate, the higher your monthly payment. You will also pay much more in interest over the life of your loan due to the higher rate and longer term.
Basically, the pros and cons of 15-year fixed mortgage rates are swapped from the 30-year rates. Yes, your monthly payments will still be predictable, but another advantage is that shorter terms come with lower interest rates. Not to mention, you'll pay off your mortgage 15 years earlier. So you will save hundreds of thousands of dollars in interest over the term of your loan.
However, because you repay the same amount in half the time, your monthly payments will be higher than if you chose a 30-year term.
Dig deeper: 15 year versus 30 year mortgages
Adjustable rate mortgages lock in your rate for a set period of time, then change it from time to time. For example, with a 5/1 ARM, your rate stays the same for the first five years and then goes up or down once a year for the remaining 25 years.
The main advantage is that the introductory rate is usually lower than what you get with a 30-year fixed rate, so your monthly payments will be lower. (Current average rates don't necessarily reflect this, though – in some cases, fixed rates are actually lower. Talk to your lender before deciding between a fixed or adjustable rate.)
With an ARM, you have no idea what mortgage rates will be once the intro rate period ends, so there is a risk that your rate will increase later. This could end up costing more, and your monthly payments are unpredictable from year to year.
But if you plan to move before the intro rate period ends, you could benefit from a low rate without risking a rate increase down the road.
Learn more: Adjustable rate mortgage versus fixed rate
First, now is a relatively good time to buy a house compared to the last few years. Home prices are not increasing as they were during the height of the COVID-19 pandemic. So, if you want or need to buy a house soon, you should feel pretty good about the current climate.
Also, it is not predicted that mortgage rates will drop significantly throughout 2025 as people expected a few months ago. As rates are swinging now — and competition tends to be less fierce during the winter months — it could be a good time to buy.
Read more: Which is more important, the price of your home or the mortgage rate?
According to Zillow, the national average 30-year mortgage rate is currently 6.78%. But remember that averages can vary depending on where you live. For example, if you are buying in a city with a high cost of living, rates could be higher.
Mortgage rates are expected to decline across the board in 2025, although they probably won't fall significantly anytime soon.
No, mortgage rates are generally increasing. They will probably decrease later this year, but the US is still in a high rate environment.
In many ways, securing a low mortgage refinance rate is similar to when you bought your home. Try to improve your credit score and lower your score debt to income ratio (DTI). Refinancing to a shorter term will also give you a lower rate, although your monthly mortgage payments will be higher.