Mortgage rates have not moved since yesterday. For example, according to Zillow, the 30-year mortgage rate dropped by just one percentage point 6.87%. Meanwhile, the 15-year interest rate increased by only one percentage point 6.17%.
This morning, the US Bureau of Labor Statistics released the latest Consumer Price Index (CPI), a key measure of inflation. Month-on-month core inflation rose 0.2% in December, down from 0.3% in November. Core inflation for the year also increased by 3.2%. This is still above the Fed’s 2% target, but it is the first annual decline since July. The figures are better than economists had expected but still high enough to ensure that the Federal Reserve will not cut its rate at the January meeting. Therefore, loan rates can remain stagnant for a long time.
Dig deeper: How inflation affects mortgage rates
Here are the current mortgage rates, according to the latest Zillow data:
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30 years fixed: 6.87%
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20 years fixed: 6.77%
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15 years fixed: 6.17%
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5/1 ARM: 6.72%
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7/1 ARM: 6.69%
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VA for 30 years: 6.36%
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15 year VA: 5.77%
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5/1 VA: 6.51%
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30 year FHA: 6.33%
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5/1 FHA: 6.38%
Remember, these are national averages and rounded to the nearest hundredth.
Read more: Here’s how mortgage rates are determined
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Here are today’s mortgage rates, according to the latest Zillow data:
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30 years fixed: 6.91%
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20 years fixed: 6.80%
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15 years fixed: 6.18%
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5/1 ARM: 6.68%
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7/1 ARM: 6.78%
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VA for 30 years: 6.35%
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15 year VA: 5.96%
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5/1 VA: 6.28%
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5/1 FHA: 6.50%
Again, the numbers given are national averages rounded to the nearest hundredth. Mortgage refinance rates are often higher than home buying rates, although not always.
Use Yahoo Finance’s free mortgage calculator to see how different interest rates and terms will affect your monthly mortgage payment. It also shows how the price of the home and the amount of the down payment play into things.
Our calculator includes homeowners insurance and property taxes in your monthly payment estimate. You even have the option to include the cost of private mortgage insurance (PMI) and homeowners association fees if that applies to you. This information results in a more accurate monthly payment estimate than if you simply calculated the loan principal and interest.
There are two main advantages of a 30-year fixed mortgage: Your payments are low, and your monthly payments are predictable.
A 30-year fixed-rate loan has lower monthly payments because you’re spreading your payment over a longer period of time than, say, a 15-year loan. Your payments are predictable because, unlike an adjustable-rate mortgage (ARM), your rate won’t change from year to year. For many years, the only things that may affect your monthly payment are any changes in homeowners insurance or property taxes.
The main downside to 30-year mortgage rates is the interest on the mortgage – both short term and long term.
A 30-year fixed term comes with a higher rate than a shorter fixed term, and is higher than the introductory rate of a 30-year ARM. The higher your rate, the higher your monthly payment. You will also pay more interest over the life of your loan due to both the higher rate and longer term.
The pros and cons of 15-year mortgage rates are basically changed to 30-year rates. Yes, your monthly payments will still be predictable, but another benefit is that shorter terms come with lower interest rates. Not to mention you will be paying off your mortgage in 15 years soon. So you will save hundreds of thousands of dollars in interest over the life of your loan.
However, because you pay the same amount for half the term, your monthly payments will be higher if you choose a 30-year term.
Dig deeper: 15 year versus 30 year loans
Adjustable rate mortgages lock in your rate for a fixed period of time, then change it periodically. 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 big advantage is that the introductory rate is usually lower than what you would get with a 30-year fixed rate, so your monthly payments will be lower. (Current average rates don’t reflect this, however – 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 your loan rates will be once the introductory period is over, so you run the risk of your rate increasing over time. This can ultimately end up costing more, and your monthly payments are not predictable from year to year.
But if you plan to move before the intro-rate period ends, you can reap the benefits of a lower rate without risking rate hikes down the road.
Read more: Adjustable rate versus fixed rate mortgage
The national average for a 30-year mortgage is currently 6.87%, according to Zillow. But remember that prices can vary depending on where you live. For example, if you are buying in a city with a high cost of living, the prices can be even higher.
Mortgage rates will likely fall in 2025, but as the country waits to see how Trump’s leadership will affect inflation and other aspects of the economy, it is unclear how much rates could fall this year.
With occasional exceptions, mortgage rates have been on the rise for the past few weeks.
In many ways, getting a low rate mortgage refinance is the same as when you buy your home. Try to improve your credit score and lower your debt-to-income (DTI) ratio. Refinancing for a shorter period of time will also give you a lower rate, although your monthly mortgage payments will be higher.
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