Mortgage interest rates have fallen for several days in a row, but are still relatively high. According to Zillow, the current 30-year fixed rate is 6.67%and the 15-year fixed interest rate is 5.95%. So, should you buy quickly or wait for lower rates?
First, mortgage rates should fall in 2025, but the decline will likely be gradual. Second, trying to time the real estate market is like trying to time the stock market. It is often fruitless because there are countless factors at play and you don’t know what will happen at any given time. If you’re financially ready to purchase a home, you may want to start the process sooner rather than later. Keep in mind that you can always refinance at a lower rate in a few years.
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Dig deeper: Is 2025 a good time to buy a house?
Here are the current mortgage rates, according to the latest Zillow data:
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30 years fixed: 6.67%
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20 years fixed: 6.45%
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15 years fixed: 5.95%
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5/1ARM: 6.94%
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7/1ARM: 6.91%
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30 years VA: 6.12%
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15 years VA: 5.56%
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5/1 VA: 6.16%
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30 years FHA: 6.33%
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5/1 FHA: 6.38%
Please note that these are national averages, rounded to the nearest hundredth.
Read more: How is the mortgage interest determined?
Here are the current mortgage interest rates, according to the latest Zillow data:
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30 years fixed: 6.67%
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20 years fixed: 6.46%
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15 years fixed: 5.92%
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5/1ARM: 7.24%
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7/1ARM: 7.45%
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30 years VA: 6.10%
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15 years VA: 5.72%
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5/1 VA: 6.04%
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5/1 FHA: 6.50%
Again, the figures provided are national averages, rounded to the nearest hundredth. While this is not always the case, mortgage refinancing rates are typically slightly higher than purchase rates.
A mortgage calculator can help you see how different mortgage terms and interest rates will affect your monthly payments. Use Yahoo Finance’s free mortgage calculator to play with different outcomes.
Our calculator also takes into account factors like property taxes and homeowners insurance when estimating your monthly mortgage payment. This gives you a better idea of your total monthly costs than if you only looked at the principal and interest of the mortgage.
The current average 30-year mortgage rate is 6.67%. A term of 30 years is the most popular mortgage type, because by spreading your payments over 360 months your monthly costs are relatively low.
If you had a $300,000 mortgage with a 30-year term and a 6.67% rate, your monthly principal and interest payments would be approximately $1,930and you would pay $394,752 in interest over the life of your loan – on top of the original €300,000.
The average 15-year mortgage rate is currently 5.95%. When choosing between a mortgage with a term of 15 or 30 years, several factors must be taken into account.
A mortgage with a term of 15 years has a lower interest rate than a mortgage with a term of 30 years. This is great in the long run because you’ll pay off your loan 15 years sooner, which is 15 fewer years before interest accrues.
However, because you’re squeezing the same debt payment in half the time, your monthly payments will be higher.
If you get the same $300,000 mortgage, but with a 15-year term and a 5.95% rate, your monthly payment would increase to $2,523 – but you would only pay $154,225 in the spotlight over the years.
Dig deeper: How much house can I afford? Use our housing affordability calculator.
With a variable-rate mortgage, your interest rate is fixed for a specific period and then increased or decreased periodically. For example, with a 5/1 ARM, your rate stays the same for the first five years and then changes every year.
Adjustable rates usually start lower than fixed rates, but you run the risk of your rate increasing once the introductory interest rate setting period is over. But an ARM can be a good solution if you plan to sell the house before your fixed-rate period expires. This way you pay a lower rate without having to worry that it will increase later.
ARM rates have also been higher than fixed rates lately. Before you commit to a fixed or adjustable mortgage rate, shop around for the best lenders and rates. Some offer more competitive, customizable rates than others.
Mortgage lenders typically give the lowest mortgage rates to people with higher down payments, excellent credit scores and a low debt-to-income ratio. So if you want a lower rate, try saving more, improving your credit score, or paying off some debt before you start buying homes.
You can also permanently buy out your interest by paying for discount points at closing. A temporary interest rate buydown is also an option. For example, you might get a 6% interest rate on a 2-1 buydown. Your rate starts at 4% for the first year, increases to 5% for the second year, and then settles at 6% for the remainder of your term.
Consider whether these buydowns are worth the extra money at closing. Before you make a decision, ask yourself whether you will live in the home long enough that the amount you save with a lower rate will offset the cost of lowering your rate.
More information: How to get the lowest mortgage interest rate
Here are the interest rates for some of the most popular mortgage terms: According to Zillow data, the national average 30-year fixed rate is 6.67%, the 15-year fixed rate is 5.95%, and the 5/1 ARM rate is 6. 94%. .
A normal mortgage interest rate on a 30-year loan is 6.67%. However, keep in mind that this is the national average based on Zillow data. The average may be higher or lower depending on where you live in the US
Mortgage rates are unlikely to fall significantly in early 2025, although they may take a step back here and there.