Compare Current Mortgage Rates in January 2025

The average 15-year fixed mortgage APR is 6.38%, according to Bankrate’s latest survey of the nation’s largest mortgage lenders. The listings that appear on this page are from companies that pay Credible compensation. This table does not include all companies or all available products. For products indicated as a jumbo (e.g. 30-year fixed jumbo rate), displayed information follows the same assumptions as a conventional loan but set at loan above the conforming limit. Non-QM loans may have lower credit score requirements, or offer low-down-payment options without mortgage insurance. Adjustable-rate mortgages are fitting for borrowers who expect to move before their first rate adjustment, or who can afford a higher future payment.

Compare current Citi mortgage rates today

The process for refinancing a mortgage is similar to getting a purchase mortgage in that it entails shopping for rates and loan terms based on your credit score and completing an application. Instead of obtaining an appraisal on the property being initially purchased a new mortgage loan rates appraisal is required on the home you are refinancing. Also, unlike a new purchase mortgage, refinancing does not require a down payment. For these types of loans with lower down payment options, the borrower can be required to acquire private mortgage insurance (PMI).

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You need to apply for mortgage preapproval to find out how much you could qualify for. Lenders use the preapproval process to review your overall financial picture — including your assets, credit history, debt and income — and calculate how much they’d be willing to lend you for a mortgage. When buying a home, a higher mortgage interest rate will raise your monthly principal and interest payment.

• Mortgage points represent a percentage of an underlying loan amount—one point equals 1% of the loan amount.
• Homeowners who put down at least 20% will be able to save the most.
• This is an added cost paid by the borrower, which protects their lender in case of default or foreclosure.
• The borrower agrees to pay the lender over time, typically in a series of regular payments divided into principal and interest.
• However, rates currently average a few basis points above MBA’s forecast.

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This means that the regular payment required will stay the same, but different proportions of principal vs. interest will be paid over the life of the loan with each payment. Macroeconomic factors kept the mortgage market relatively low for much of 2021. In particular, the Federal Reserve had been buying billions of dollars of bonds in response to the pandemic’s economic pressures. The current national mortgage rates forecast indicates that rates are likely to remain high compared to recent years, and stay well above 6% for now. This week, 30-year rates went up by 0.06 percentage points, while 15-year mortgage rates rose by 0.13 percentage points. I’ve covered the housing market, mortgages and real estate for the past 12 years.

Pros and cons of a 30-year mortgage

For example, if your interest rate is 7% and your loan balance is $100,000, you’ll pay $7,000 in interest for one year. “With a 15-year mortgage, the monthly payment would be $2,930 on the first loan and $3,025 on the second, a difference of $95.” Paying discount points allows you to lower your mortgage rate by prepaying interest as a lump sum of cash at closing. Additionally, many current homeowners are choosing to hold off on selling their properties because of high interest rates and home prices, a phenomenon dubbed “lock-in effect,” according to a Fannie Mae study.

Top offers on Bankrate vs. national average interest rates

Our expert advisory board members, along with credible economists add valuable insights, provide accurate and unbiased commentary. A fixed-rate mortgage has the same interest rate for the entire loan term. On a 30-year mortgage with a fixed rate of 6%, your interest rate will be 6% for all 30 years. Variable rate products, such as ARMs, have interest rates that can change over the life of the loan.

What Are Mortgage Points?

Following its decision to cut its key interest rate by 50 basis points in September, the Federal Reserve lowered the fed funds rate by an additional 25 basis points at its November meeting. Though mortgage rate activity is likely to be volatile in the coming weeks, experts say rates are unlikely to surge to the highs of earlier this year. Compare rates and terms among the best mortgage lenders to find a deal that fits your unique situation. Curinos uses its own standardized parameters, such as a $350,000 conventional mortgage loan. These daily mortgage rate calculations assume an 80% LTV ratio, a credit score of at least 740 and a 60-day lock period.

• However, if you’re comfortable with some level of risk and anticipate selling or refinancing before potential rate adjustments kick in, an adjustable-rate mortgage could offer initial lower rates that might suit your needs.
• Terms, conditions and fees for accounts, programs, products and services are subject to change without notice.
• Our mortgage calculator can help you determine whether your mortgage payment leaves enough room in your budget to comfortably cover your other monthly bills.
• The end result is a good snapshot of daily rates and how they change over time.
• On a $1 million 30-year home loan with a $200,000 down payment, the monthly payment would be $6,181 if the interest rate was 7.25%.
• We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey.
• They offer a no-down-payment solution for borrowers who purchase real estate in an eligible rural area.
• At its November meeting, the Fed cut the federal funds rate by 25 basis points.

Rates remain elevated Current mortgage rates, January 3, 2025

For example, advanced preparation and meeting with multiple lenders can go a long way. Even lowering your rate by a few basis points can save you money in the long run. Before joining Bankrate in 2020, I spent more than 20 years writing about real estate and the economy for the Palm Beach Post and the South Florida Business Journal. I’ve had a front-row seat for two housing booms and a housing bust. I’ve twice won gold awards from the National Association of Real Estate Editors, and since 2017 I’ve served on the nonprofit’s board of directors.

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It’s welcomed news for borrowers since rates ended 2024 on the upswing. A good mortgage rate, which is usually represented as the lowest available rate for a 30-year fixed mortgage, will depend on the borrower. Lenders will advertise the lowest rate offered but yours will depend on factors like your credit history, income, other debts, and your down payment. For instance, a good mortgage rate for someone who has a low credit score tends to be higher than for someone who has a higher credit score. The Fed maintained the federal funds rate at its peak level for almost 14 months, beginning in July 2023. This first reduction was by 0.50 percentage points, and the second was by 0.25%.

Market data affecting today’s mortgage rates

Though today’s market data more so points to headwinds, likely putting upward pressure on mortgage rates in the short-term. According to research by Freddie Mac, mortgage borrowers who shopped around for the best rate saved significant sums of money on interest and fees compared to those who did not. If the bond yield increases, mortgage rates tend to go up, and vice versa. The 10-year Treasury yield is usually the best standard to judge mortgage rates. That’s because many mortgages are refinanced or paid off after 10 years, even if the norm is a 30-year fixed-rate mortgage loan.

Insights From Economists: Detailed Predictions for Interest Rates in January 2025

With each rate adjustment, a borrower’s mortgage rate can either increase, decrease, or stay the same. These loans are unpredictable since monthly payments can change each year. To assess mortgage rates, we first needed to create a credit profile. This profile included a credit score ranging from 700 to 760 with a property loan-to-value ratio (LTV) of 80%. With this profile, we averaged the lowest rates offered by more than 200 of the nation’s top lenders. These rates represent what real consumers will see when shopping for a mortgage.

When should you lock in your mortgage rate?

A government loan backed by the Federal Housing Administration for low- to moderate-income borrowers. FHA loans feature low credit score and down payment requirements. Historically speaking, borrowers with higher credit scores are less likely to default on their mortgages, so they qualify for lower rates. Before the pandemic, post-pandemic upheavals, and war in Ukraine, you could look at the above figures and make a pretty good guess about what would happen to mortgage rates that day.

Current mortgage and refinance rates

The average 30-year fixed rate mortgage (FRM) hit a record weekly low of 2.65% on Jan. 7, 2021, and a record weekly high of 8.89% on Dec. 16, 1994, according to Freddie Mac. Individuals and businesses use mortgages to buy real estate without paying the entire purchase price upfront. The borrower repays the loan plus interest over a specified number of years until they own the property free and clear.

• He has expertise in all mortgage products, including conventional, FHA, and VA loans.
• For example, average rates might be 7.12% on Tuesday and 7.06% on Wednesday.
• This week, 30-year rates went up by 0.06 percentage points, while 15-year mortgage rates rose by 0.13 percentage points.
• A 30-year mortgage is a conventional home loan that offers a fixed rate for a 30-year term.
• When mortgage interest rates decrease, the first step a consumer should take is to determine how this change may affect their current home-buying experience.
• The initial interest rate on an ARM is often lower than the rate on a 30-year fixed-rate mortgage.
• Generally, the higher your down payment, the lower your rate may be.
• For instance, the Federal Reserve’s decisions on the federal funds rate can indirectly affect mortgage rates.
• A pair of economic reports come out today, starting with the Institute for Supply Management’s index on the manufacturing sector.

Why do mortgage rates change every day?

Her work has been published by Forbes Advisor, Capital One, MassMutual, Prudential, Reader’s Digest, The Motley Fool, Investopedia, International Business Times, Business Insider, Bankrate, and other outlets. From not saving enough for a down payment to skipping pre-approval, don’t fall victim to these first-time homebuyer mistakes. Getting preapproved for a mortgage is a great first step in the homebuying process.

VA loans allow no down payment and have exceptionally low mortgage rates. Cash-out refinances pose a greater risk for mortgage lenders, so they’re often priced higher than new home purchases and rate-term refinances. Because they have to be exceptionally strong or weak for us to rely on them. But, with that caveat, mortgage rates today might nudge upward or barely budge. However, be aware that “intraday swings” (when rates change speed or direction during the day) are a common feature right now. Like a conventional 30-year mortgage, a 20-year mortgage is a home loan with a fixed rate but with a shorter 20-year term.

Who Should Consider a 15-year Mortgage?

• Rates for a home purchase and mortgage refinance are often similar.
• To find the average mortgage rates today, we use data from approximately 40 lenders, assuming a down payment of at least 20% and an applicant credit score in the 680–739 range.
• Cash-out refinances pose a greater risk for mortgage lenders, so they’re often priced higher than new home purchases and rate-term refinances.
• In April 2024, the Mortgage Bankers Association (MBA) forecast mortgage rates to hit 6.4% this year.
• They also discuss prioritizing the customer experience, effectively scaling your operations, and how to develop an adaptable product mix as we go into 2025 and beyond.
• Remember, every mortgage lender weighs these factors a little differently.
• This could work well if you’re not planning to stay in your home long term or if you’re in a market where rates are high but are expected to drop.
• Variable rate products, such as ARMs, have interest rates that can change over the life of the loan.

The cost can vary depending on many factors, including your lender and how much you’re borrowing. It’s possible to get the seller or lender to pay a portion or all of these costs. Once you’ve selected your lender, you should ask your loan officer about the options you have to lock in a rate. Mortgage rate locks usually last between 30 and 60 days, and they exist to give you a guarantee that the rate your lender offered you will still be available when you actually close on the loan. If your loan doesn’t close before your rate lock expires, you should expect to pay a rate lock extension fee.