Mortgage rates have fallen significantly over the past few months: According to data from Zillow, the current 30-year mortgage rate is 5.70%, down 80 basis points since July 22. The 15-year mortgage rate is 5.04%, down 71 basis points from the same time in July.
The Federal Reserve is set to cut the federal funds rate six more times by the end of 2025, meaning mortgage rates will probably continue to fall. With interest rates already dropping significantly, now may still be a good time to buy, especially since competition is likely to increase as rates continue to fall. But if you already own a home and are looking to refinance, you might want to wait for better rates.
Read more: How Federal Reserve interest rate decisions affect mortgage rates
Current mortgage interest rates
According to the latest Zillow data, current mortgage rates are as follows:
30-Year Fixed Rate: 5.70%
20-Year Fixed Rate: 5.48%
15-year fixed rate: 5.04%
5/1 ARM: 5.94%
7/1 ARM: 5.91%
30-year VA: 5.17%
15-year VA: 4.86%
5/1 VA: 5.70%
Please note that these are national averages and are rounded to one decimal place.
Current mortgage refinance rates
According to the latest Zillow data, current mortgage refinance rates are as follows:
30-year fixed rate: 5.71%
20-year fixed rate: 5.37%
15-year fixed rate: 5.02%
5/1 ARM: 6.15%
7/1 ARM: 6.45%
5/1 FHA: 4.51%
30-year VA: 5.12%
15-year VA: 4.90%
5/1 VA: 5.59%
Again, the figures provided are national averages rounded to one decimal place. Mortgage refinance rates are often higher than interest rates for buying a home, but that’s not always the case.
Read more: Is now a good time to refinance your mortgage?
Monthly Mortgage Payment Calculator
Use the free Yahoo Finance mortgage calculator to see how different mortgage terms and interest rates will affect your monthly payment.
Our calculator estimates your monthly mortgage payment by factoring in factors like property taxes and homeowners insurance, giving you a more realistic idea of what your total monthly payments will be than if you only looked at mortgage principal and interest.
30-year fixed mortgage rate vs. 15-year fixed mortgage rate
Currently, the average interest rate on a 30-year mortgage is 5.70%. The 30-year loan is the most popular mortgage because by spreading your payments out over 360 months, your monthly payments are lower than with shorter-term loans.
Currently, the average interest rate for a 15-year mortgage is 5.04%. When deciding between a 15-year mortgage or a 30-year mortgage, consider your short-term and long-term goals.
A 15-year loan will have a lower interest rate than a 30-year loan, which is great in the long run because you pay off your loan 15 years sooner and have 15 fewer years for interest to accumulate, but your monthly payments will be higher because you’re paying off the same amount in half the time.
Let’s say you take out a $300,000 mortgage. With a 30-year term and a 5.70% interest rate, your monthly payments for principal and interest would be about $1,741, meaning you’ll pay the original $300,000 plus $326,832 in interest over the life of the loan.
For that same $300,000 mortgage with a 15-year term and 5.04% interest rate, your monthly payment would jump to $2,379, but over the years you’d only pay $128,155 in interest.
Fixed rate mortgages vs adjustable rate mortgages
With a fixed-rate mortgage, your interest rate stays the same for the life of your loan, unless you refinance your mortgage and a new interest rate applies.
With an adjustable rate mortgage, your interest rate stays constant for a set period of time. After that, your interest rate can go up or down depending on several factors, including economic conditions and the maximum amount your interest rate can change under your contract. For example, a 7/1 adjustable rate mortgage keeps your interest rate fixed for the first seven years and then adjusts annually for the remaining 23 years.
Variable interest rates usually start at a lower rate than fixed rates, but they may increase once the initial interest rate lock-in period ends. However, recently some fixed interest rates have started at a lower rate than variable rates. Discuss interest rates with your lender before choosing one or the other.
Learn more: Adjustable rate mortgages vs fixed rate mortgages
How to keep mortgage interest rates low
Mortgage lenders typically offer the lowest mortgage rates to people with high down payments, good or excellent credit scores, and low debt-to-income ratios, so if you want to lower your interest rate, try increasing your savings, improving your credit score, and paying off some of your debt before you start shopping for a home.
Waiting for rates to drop probably isn’t the best way to get the lowest mortgage rates right now unless you’re really in no hurry and don’t mind waiting until the end of 2024 or 2025. If you’re ready to buy, focusing on your personal finances is probably the best way to get a lower interest rate.
Read more: How to get the lowest mortgage interest rate
How to Choose a Mortgage Lender
To find the best mortgage lender for your situation, apply for mortgage pre-approval with three to four companies, but make sure you apply to all of them within a short period of time, as this will give you the most accurate comparison and will have less impact on your credit score.
When choosing a lender, don’t just compare interest rates. Look at the mortgage’s annual percentage rate (APR), which includes interest, discount points, and fees. The APR is also expressed as a percentage and reflects the actual yearly cost of borrowing money. This is the most important number to look at when comparing mortgage lenders.
Current Mortgage Rates: FAQs
What are the current mortgage interest rates?
According to Zillow, the national average 30-year mortgage rate is 5.70%, and the average 15-year mortgage rate is 5.04%. However, these are national averages, so the averages in your area may vary. Expensive areas of the U.S. have higher average interest rates, while cheaper areas have lower ones.
What is a fair mortgage interest rate right now?
According to Zillow, the average interest rate on a 30-year fixed mortgage is currently 5.70%, but if you have a great credit score, a large down payment and a low debt-to-income ratio (DTI), you could potentially get a better rate.
Are mortgage rates expected to fall?
Yes, mortgage rates are expected to continue to fall through 2024 and 2025.
