Current mortgage rates are significantly lower than rates last January. This time last year, the average 30-year fixed mortgage rate was above 7%, according to Freddie Mac. Now, the 30-year year-over-year rate has fallen 98 basis points to 6.06%. This is a good time to shop around for the mortgage lender that offers the best deal and lock in a rate.
Here are the current mortgage rates, according to the latest data from Zillow:
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Fixed for 30 years: 5.86%
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Fixed for 20 years: 5.82%
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Fixed for 15 years: 5.33%
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ARM 5/1: 6.11%
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7/1 ARM: 6.14%
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30 year old VA: 5.46%
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VA of 15 years: 5.09%
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5/1VA: 5.16%
Remember, these are national averages and have been rounded to the nearest hundredth.
Here are the current mortgage refinance rates, according to the latest data from Zillow:
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Fixed for 30 years: 6.05%
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Fixed for 20 years: 5.92%
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Fixed for 15 years: 5.47%
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ARM 5/1: 6.39%
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7/1 ARM: 6.29%
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30 year old VA: 5.41%
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VA of 15 years: 5.08%
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5/1VA: 5.12%
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30-year FHA: 5.83%
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.
Dive deeper into the 7 home refinancing options.
Refinance interest rates
Your mortgage rate plays a big role in the amount of your monthly payment. Use this mortgage calculator to see how your mortgage amount, rate, and term length will affect your monthly payments:
You can bookmark Yahoo Finance’s mortgage payment calculator and keep it on hand for future use as you research homes and lenders.
A mortgage interest rate is a fee for borrowing money from your lender, expressed as a percentage. You can choose between two types of rates: fixed or adjustable.
A fixed-rate mortgage fixes your rate for the entire life of your loan. For example, if you take out a 30-year mortgage with a 6% interest rate, your rate will remain at 6% for the entire 30-year term unless you refinance or sell.
An adjustable-rate mortgage fixes your rate for a predetermined period and then adjusts it periodically. Let’s say you get a 7/1 ARM with a 6% introductory rate. His rate would be 6% for the first seven years, then the rate would increase or decrease once a year for the last 23 years of his term. Whether your rate goes up or down depends on several factors, such as the economy and the real estate market.
At the beginning of your mortgage term, most of your monthly payment goes toward interest. Your monthly mortgage principal and interest payment stays the same over the years; However, less and less of your payment goes toward interest and more goes toward mortgage principal or the amount you originally borrowed.
A 30-year fixed-rate mortgage is a good option if you want a lower mortgage payment and the predictability that comes with having a fixed rate. Just know that your rate will be higher than if you choose a shorter term and you’ll pay significantly more interest over the years.
You may want to consider a 15-year fixed-rate mortgage if your goal is to pay off your home loan quickly and save money on interest. These shorter terms come with lower interest rates, and since you’ll cut your repayment time in half, you’ll save a lot on interest in the long run. But you’ll need to make sure you can comfortably afford the higher monthly payments that come with 15-year terms.
Typically, an adjustable rate mortgage might be good if you plan to sell before the introductory rate period ends. Adjustable rates generally start lower than fixed rates, then your rate will change after a predetermined period of time. However, 5/1 and 7/1 ARMs recently have similar (or even higher) 30-year fixed rates. Before getting an ARM just for a lower rate, compare your rate options from term to term and lender to lender.
Mortgage rates have generally fallen since late May, and home loan rates remain lower than the same period a year ago. Economists don’t expect dramatic declines in mortgage rates until late 2026. Even with the most recent cut in December to the federal funds rate, mortgage rates continue to fluctuate within a range, barely budging since mid-October.
According to Freddie Mac, the national average 30-year mortgage rate decreased 10 basis points to 6.06% over the week, while the average 15-year mortgage rate fell eight basis points to 5.38%.
According to its December forecast, the MBA expects the 30-year mortgage rate to be near 6.4% through 2026. Fannie Mae also predicts a 30-year rate above 6% through next year, although it will fall to 5.9% in the fourth quarter of 2026.
Mortgage rates are likely to remain little changed in 2027. The MBA forecast 30-year fixed rates of 6.3% through most of 2027, before rising to an average of 6.4% in the fourth quarter of 2027. Fannie Mae predicts average rates near 5.9% for all of 2027.