Mortgage rates remain practically stable. According to Zillow, the average 30-year fixed rate is 6.16%, while the fixed term of 15 years is 5.61%. There is no momentum to go down substantially.
Here are the current mortgage rates, according to the latest data from Zillow:
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Fixed for 30 years: 6.16%
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Fixed for 20 years: 6.04%
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Fixed for 15 years: 5.61%
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ARM 5/1: 6.54%
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7/1 ARM: 6.51%
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30 year old VA: 5.61%
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VA of 15 years: 5.35%
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5/1VA: 5.57%
Remember, these are national averages and are rounded to the nearest hundredth.
Learn more about how mortgage rates are determined.
Here are the current mortgage refinance rates, according to the latest data from Zillow:
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Fixed for 30 years: 6.33%
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Fixed for 20 years: 6.30%
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Fixed for 15 years: 5.82%
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ARM 5/1: 6.63%
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7/1 ARM: 6.95%
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30 year old VA: 5.97%
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VA of 15 years: 5.77%
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5/1 VA: 5.42%
Again, the figures provided are national averages rounded to the nearest hundredth. Mortgage refinancing rates are typically higher than rates when purchasing a home, although this is not always the case.
Use the mortgage calculator below to see how different interest rates and loan amounts will affect your monthly payments. It also shows how the term length influences.
To dig deeper, use Yahoo Finance’s mortgage calculator, which includes homeowner’s insurance and property taxes in your monthly payment estimate. You even have the option to enter private mortgage insurance (PMI) costs and homeowners association dues, if they apply to you. These details result in a more accurate monthly payment estimate than if you simply calculated the principal and interest on your mortgage.
A 30-year fixed mortgage has two main advantages: its payments are lower and its monthly payments are predictable.
A 30-year fixed-rate mortgage has relatively low monthly payments because it spreads your payment over a longer period of time than, for example, a 15-year mortgage. Your payments are predictable because, unlike an adjustable-rate mortgage (ARM), your rate won’t change from year to year. Most years, the only thing that could affect your monthly payment is changes to your homeowner’s insurance or property taxes.
The main disadvantage of 30-year fixed mortgage rates is the mortgage interest, both short and long term.
A 30-year term loan has a higher rate than a shorter term loan. You’ll also pay much more in interest over the life of your loan due to both the higher rate and longer term.
The pros and cons of 15-year fixed mortgage rates essentially trade off with those of 30-year rates. Yes, your monthly payments will remain predictable, but another advantage is that shorter terms come with lower interest rates. Not to mention you’ll pay off your mortgage 15 years sooner. Therefore, you will potentially save hundreds of thousands of dollars in interest over the course of your loan.
However, because you will pay the same amount in half the time, your monthly payments will be higher than if you choose a 30-year term.
Adjustable rate mortgages lock your rate for a predetermined period of time and then change it periodically. For example, with a 5/1 ARM, your rate stays the same for the first five years and then moves up or down once a year for the remaining 25 years.
The main advantage is that the initial rate is usually lower than what you’ll 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, according to Zillow data. Talk to your lender before deciding between a fixed or adjustable rate.)
With an ARM, you have no idea what mortgage rates will be like once the rate introductory period ends, so you run the risk of your rate increasing later. Ultimately, this could end up costing more and your monthly payments are unpredictable from year to year.
But if you plan to move before the rate introductory period ends, you could reap the benefits of a low rate without risking a rate increase in the future.
The national average 30-year mortgage rate is 6.16% right now, according to Zillow. But keep in mind that averages may vary depending on where you live. For example, if you buy in a city with a high cost of living, rates could be even higher.
Mortgage rates are likely to remain in a tight range for the next few months. The Federal Reserve is considering one more cut in short-term interest rates before the end of the year; However, even if that happens, mortgage rates will likely resist falling much further.
Mortgage rates have been fluctuating, but there has been a general downward movement since the government shutdown. According to Freddie Mac data, they are below where they were a year ago.
In many ways, getting a low mortgage refinance rate is similar to when you bought your home. Try to improve your credit score and reduce your debt-to-income (DTI) ratio. Refinancing to a shorter term will also get you a lower rate, although your monthly mortgage payments will be higher.