Mortgage rates rose again this week. The good news is that the week-over-week increases are modest — according to Freddie Mac, the 30-year fixed rate rose two basis points to 6.93%and the 15-year fixed rate rose just one basis point to 6.14%.
Bad news? National mortgage rates are now officially higher than they were this week last year. Both 30-year and 15-year mortgage rates have risen 27 basis points since last January.
Rates are unlikely to fall in the next month. Economists do not expect the Federal Reserve to cut the federal funds rate at its Jan. 29 meeting, and investors are waiting to see how a second Trump term will affect the economy. If you’re trying to get a low interest rate home loan soon, you better be looking for a mortgage lender rather than relying on rates to reduce.
Dig deeper: How the Federal Reserve Affects Mortgage Rates
Here are the current mortgage rates, according to the latest data from Zillow:
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30 years fixed: 6.72%
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20 years fixed: 6.48%
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15 years fixed: 6.04%
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5/1 ARM: 6.72%
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7/1 ARM: 6.71%
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30-year VA: 6.18%
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15-year VA: 5.65%
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5/1 VA: 6.20%
Remember, these are national averages and rounded to the nearest hundredth.
Learn more: 5 strategies to get the lowest mortgage rate
Here are today’s mortgage refinance rates, according to the latest data from Zillow:
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30 years fixed: 6.78%
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20 years fixed: 6.64%
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15 years fixed: 6.07%
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5/1 ARM: 6.81%
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7/1 ARM: 6.67%
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30-year VA: 6.13%
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15-year VA: 5.78%
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5/1 VA: 5.90%
Again, the numbers listed are national averages rounded to the nearest hundredth. Mortgage refinance rates are often higher than home buying rates, although this is not always the case.
Learn more: Want to refinance your mortgage? Here are 7 home refinancing options.
Yahoo Finance has a free mortgage payment calculator. Use the calculator to see how different mortgage rates and loan terms can affect your monthly payments.
Our calculator also takes into account home insurance, property taxes and other costs that affect your monthly payment. This will give you a better idea of what you would realistically pay in a month than just looking at the mortgage principal and interest.
AND mortgage interest rate is the fee for borrowing money from your lender, expressed as a percentage. You can choose between two types of rates: fixed or adjustable.
A fixed rate mortgage locks in your rate for the life of your loan. For example, if you get a 30-year mortgage with an interest rate of 6%, your rate will remain at 6% for the entire 30 years unless you refinance or sell it.
An adjustable rate mortgage it locks in your rate for a predetermined amount of time and then changes it periodically. Let’s say you get a 7/1 ARM with an initial rate of 6%. Your rate would be 6% for the first seven years, and then the rate would increase or decrease once a year for the last 23 years of your term. Whether your rate goes up or down depends on several factors, such as the economy and housing market.
At the start of your mortgage term, most of your monthly payment goes towards interest. Your monthly payment according to mortgage principal and the interest stays the same over the years — however, less and less of your payment goes toward interest, and more goes toward the mortgage principal, or the amount you originally borrowed.
Learn more: Adjustable rate mortgages vs. fixed rate mortgages
A 30-year fixed rate mortgage is a good choice if you want lower mortgage payments and the predictability that comes with a fixed rate. Just know that your rate will be higher than if you choose a shorter term and will result in paying significantly more interest over the years.
You might like a 15-year fixed rate mortgage if you want to pay off your home loan quickly and save money on interest. These shorter terms come with lower interest rates, and since you’re cutting your repayment time in half, you’ll save a lot on interest in the long run. But you’ll need to make sure you can comfortably afford the higher monthly payments that come with 15-year terms.
Read more: How to decide between a 15-year and a 30-year fixed rate mortgage
Typically, an adjustable rate mortgage can be good if you plan to sell before the prime rate period ends. Adjustable rates usually start lower than fixed rates and then your rate will change after a predetermined amount of time. However, 5/1 and 7/1 ARM rates are currently very similar to 30-year fixed rates. Before getting a lower-rate-only ARM, compare your rate options from term to term and lender to lender.
Mortgage rates started to fall in August and early September — but have largely stagnated or risen since mid-September.
In fact, it has risen for three consecutive weeks.
Mortgage rates are likely to decline through 2025, but with uncertainty over how a Trump presidency will affect the economy, it’s unclear how drastically they will fall. We can expect rates to remain above 6%.
Read more: When will the real estate market crash again?
This week’s national average 30-year mortgage rate rose two basis points to 6.93%, and the average 15-year mortgage rate rose one basis point to 6.14%, according to Freddie Mac.
According to the December forecast, Fannie Mae expects the 30-year mortgage rate to be 6.20% by the end of 2025. The Mortgage Bankers Association’s (MBA) December forecast is less bullish, putting the 30-year rate at 6.40% in the fourth quarter of 2025.
There’s a decent chance that mortgage rates will decrease overall in 2025, not increase. However, we will have to see how the next few months shake out as markets react to Trump’s upcoming presidency and when the Fed decides to cut its rate.
