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For a 30-year fixed rate mortgage, the average interest rate you’re currently paying is 6.16%, down 0.16% from last week. The average interest rate for a 15-year fixed mortgage is 5.38%, down 0.19% from the same time last week. Learn more about this week’s mortgage forecast here.
The Federal Reserve cut interest rates for the first time in more than four years on Sept. 18. With inflation at its lowest level since spring 2021 and a weakened labor market, the Fed is now focused on maintaining a balance between stable prices and maximum employment.
This first 50% cut, plus additional cuts planned for next year, will lower mortgage rates and bring more would-be homebuyers off the sidelines, but lower mortgage rates alone cannot fix today’s housing market, which is plagued by high home prices and limited inventory.
Current average mortgage interest rates
Refinancing your mortgage
The Federal Reserve has started to lower interest rates, and mortgage rates are already dropping. Compare multiple loan offers from different lenders to find the best rate for your situation. Enter your information below to receive custom quotes from CNET’s partner lenders.
About these rates: Like CNET, Bankrate is owned by Red Ventures. This tool features partner rates from lenders that you can use to compare multiple mortgage rates.
What do you need to know about mortgage rates today?
Over the past few years, the Fed has raised its benchmark interest rate multiple times to combat inflation, causing mortgage rates to soar in response, topping 8% at the end of last year. Mortgage rates are not only influenced by central bank monetary policy. They fluctuate daily in response to a variety of economic factors, including the bond market, investor expectations, inflation, and labor statistics.
Many home buyers expected mortgage rates to fall at the beginning of the year, but mortgage borrowings remained elevated. Interest rates finally fell significantly in August and continued to trend downwards as the market anticipates further rate cuts. The average interest rate on a 30-year fixed mortgage is now around 6.2%, the lowest since early 2023.
Now that the Federal Reserve has officially started to cut rates, mortgage rates are expected to continue to ease, but experts stress that it will be a gradual process: the Fed is unlikely to cut rates all at once or very quickly unless there are signs of an imminent economic crisis.
“When interest rates normalize, the housing market will normalize,” Fed Chairman Jerome Powell said in remarks after the central bank’s policy meeting on Sept. 18. But he acknowledged that other problems plaguing the housing market — high home prices and limited inventory — can’t be fixed by the central bank.
Check out the chart below to see how mortgage rates have changed over the past four years.
Will mortgage rates fall in 2024?
Mortgage rates are already about 1% below their 2024 peaks. Following an initial 0.5% cut in September, the Fed plans to cut rates by another 0.5% this year, with additional cuts planned for 2025.
“Mortgage rates have been trending downward since late July 2024, and this trend is likely to continue if the Fed cuts rates for the remainder of the year,” said Matt Vernon, head of consumer lending at Bank of America.
Based on current projections, the average interest rate on a 30-year fixed mortgage could fall to 6% by the end of the year. However, there is always room for volatility in the mortgage market. If upcoming inflation data or labor market reports indicate that the economy is softening too much, the Fed may be forced to make bigger or more frequent rate cuts, which could push mortgage rates even lower.
Still, many would-be buyers who are priced out of the market will likely continue to wait until mortgage rates drop another few percentage points, and experts warn that mortgage rates are unlikely to return to the 2% to 3% levels of a few years ago.
Here’s a look at what some major housing authorities expect average mortgage rates to be.
What types of mortgages are there?
Each mortgage has a loan term, or payment schedule. The most common mortgage terms are 15 and 30 years, but 10-, 20-, and 40-year mortgages are also available. With a fixed-rate mortgage, your interest rate is set and remains stable for the life of the loan. With an adjustable-rate mortgage, your interest rate is fixed for only a set period of time (usually 5, 7, or 10 years), after which your rate adjusts annually based on the market. A fixed-rate mortgage is better if you plan to stay in your home long-term, but an adjustable-rate mortgage may allow you to pay a lower interest rate up front.
30-Year Fixed Rate Mortgage
Currently, the average interest rate on a standard 30-year fixed mortgage is 6.16%. The 30-year fixed mortgage is the most common loan term. It often has a higher interest rate than a 15-year mortgage, but it offers a lower monthly payment.
15-Year Fixed Rate Mortgage
Currently, the average interest rate for a 15-year fixed mortgage is 5.38%. While your monthly payment will be larger than a 30-year fixed mortgage, interest rates on a 15-year loan are typically lower, so you’ll pay less interest in the long run and pay off your mortgage sooner.
5/1 Adjustable Rate Mortgage
The average interest rate on a 5/1 ARM is currently 5.83%. Typically, a 5/1 ARM offers a low introductory rate for the first five years of your mortgage. After that period, however, you may end up paying a higher interest rate depending on how the interest rate adjusts each year. If you plan to sell or refinance your home within five years, an ARM could be a good option.
Calculate your monthly mortgage payment
The decision to take out a mortgage always depends on your financial situation and long-term goals. The most important thing is to create a budget and work within your means. CNET’s mortgage calculator below can help homebuyers prepare for their monthly mortgage payment.
What are your tips for finding the best mortgage rates?
Mortgage rates and home prices are high, but the housing market won’t remain unaffordable forever. It’s always a good idea to save up for a down payment and improve your credit score so you can secure a competitive mortgage rate when the time is right.
Save for a larger down payment: A 20% down payment isn’t required, but a larger down payment means you’ll borrow less on your mortgage and save money on interest. Increase your credit score: A credit score of 620 will get you a conventional mortgage, but a score of 740 or higher will get you a lower interest rate. Pay off your debt: Experts recommend a debt-to-income ratio of 36% or less to get the best interest rate. If you don’t have other debts, you’ll be able to better manage your monthly payments. Research loans and assistance: Government-backed loans have more flexible borrowing requirements than conventional loans. Some government-backed or private programs may even offer assistance with down payments and closing costs. Compare lenders: Researching and comparing multiple loan offers from different lenders can help you secure the lowest mortgage rate that suits your situation.
