Some mortgage interest rates have increased today while others have decreased. According to Zillow, the 30 year fixed rate mortgage down by one basis point i 6.72%putting it at its highest point since July.
So, will mortgage rates fall enough in 2025 for you to buy a house? The short answer: Maybe.
The long answer: A few months ago, economists had much higher hopes for mortgage rates in 2025. Now—due to various factors, including the 10-year Treasury yield, fewer upcoming Federal Reserve rate cuts, and a second presidency Trump – predictions are much more conservative. According to its December Housing OutlookFannie Mae expects the 30-year fixed rate to be 6.60% in Q1 2025 and 6.20% by Q4 2025. Mortgage Bankers Association also forecast the 30-year fixed rate to be 6.60% in Q1 2025.
It may not be worth waiting if you are holding out for significantly lower mortgage rates before buying a home.
Dig deeper: Housing market 2025 — Is it a good time to buy a house?
Here are the current mortgage rates, according to the latest Zillow data:
-
30 years fixed: 6.72%
-
20 years fixed: 6.55%
-
15 years fixed: 6.12%
-
5/1 ARM: 6.73%
-
7/1 ARM: 6.54%
-
VA 30 years: 6.15%
-
VA 15 years: 5.66%
-
5/1 VA: 6.38%
Remember, these are national averages and rounded to the nearest hundredth.
Here are today's mortgage refinance rates, according to the latest Zillow data:
-
30 years fixed: 6.70%
-
20 years fixed: 6.53%
-
15 years fixed: 5.99%
-
5/1 ARM: 6.05%
-
7/1 ARM: 6.70%
-
VA 30 years: 6.04%
-
VA 15 years: 5.83%
-
5/1 VA: 5.84%
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.
Read more: Is now a good time to refinance your mortgage?
Use the free Yahoo Finance mortgage calculator to see how various mortgage terms and interest rates will affect your monthly payments.
Our calculator also takes into account factors such as property taxes and homeowner's insurance when determining your estimated monthly mortgage payment. This gives you a more realistic idea of your total monthly payment than if you were looking at mortgage principal and interest.
The average 30 year mortgage rate today is 6.72%. A 30 year term is the most popular type of mortgage because by spreading your payments over 360 months, your monthly payment is lower than with a shorter term loan.
The average 15 year mortgage rate is 6.12% today. When deciding between a 15 years and a 30 year mortgageconsider your short term versus long term goals.
A 15 year mortgage comes with a lower interest rate than a 30 year term. This is great in the long run because you'll pay off your loan 15 years earlier, and that's 15 less years for interest to accrue. But the trade-off is that your monthly payment will be higher as you pay the same amount in half the time.
Let's say you get a $300,000 mortgage. With a 30-year term and a rate of 6.72%, your monthly payment towards principal and interest would be approx. $1,940and you would pay $398,334 in interest over the life of your loan – on top of that original $300,000.
If you get the same $300,000 mortgage but with a 15-year term and a 6.12% rate, your monthly payment would jump up to $2,551. But you would only pay $159,191 in interest over the years.
With a fixed rate mortgageyour rate is locked for the life of your loan. However, you will get a new rate if you refinance your mortgage.
An adjustable rate mortgage keeps your rate the same for a certain period of time. Then, the rate will go up or down depending on several factors, such as the economy and the maximum your rate can change according to your contract. For example, with a 7/1 ARM, your rate would be locked in for the first seven years, then change every year for the remaining 23 years of your term.
Adjustable rates usually start lower than fixed rates, but once the initial rate lock-in period ends, your rate may go up. Recently, however, some fixed rates have been starting lower than adjustable rates. Talk to your lender about their rates before choosing one or the other.
Dig deeper: Fixed rate versus adjustable rate mortgages
Mortgage lenders typically give the lowest mortgage rates to people with higher down payments, excellent or excellent credit scores, and low debt-to-income ratios. So, if you want a lower rate, try to save more, improve your credit scoreor pay off some debt before you start shopping for homes.
Waiting for rates to drop is probably not the best way to get the lowest mortgage rate right now unless you're really in no rush and don't mind waiting until the end of 2024 or into 2025. If you you're ready to buy, focusing on your personal finances is probably the best way to lower your rate.
To find the best mortgage lender for your position, apply for mortgage pre-approval with three or four companies. Make sure you apply to all of them within a short period of time – doing so will give you the most accurate comparisons and have less impact on your credit score.
When choosing a lender, don't just compare interest rates. Look at the mortgage annual percentage rate (APR) — this factors in the interest rate, any discount points, and fees. The APR, also expressed as a percentage, reflects the true annual cost of borrowing money. This is probably the most important number to consider when comparing mortgage lenders.
According to Zillow, the national average 30-year mortgage rate is 6.72%, and the average 15-year mortgage rate is 6.12%. But these are national averages, so the average in your area could be different. The averages are usually higher in expensive parts of the US and lower in less expensive areas.
The average 30-year fixed mortgage rate is currently 6.72%, according to Zillow. However, you may get an even better rate with an excellent credit score, a substantial down payment, and a low debt-to-income ratio (DTI).
Mortgage rates are not expected to drop significantly in the near future, although they may inch down here and there.