Compare Current Mortgage Rates Today Jan 3, 2025

For others, it could mean downsizing, or foregoing amenities or important contingencies like a home inspection. However, be careful about giving up contingencies because it could cost more in the long run if the house has major problems not fixed by the seller upon inspection. At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey.

Compare Today’s Mortgage Rates

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 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).

• Most rate locks last 30 to 60 days to give the lender enough time to process the loan.
• 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.
• For borrowers with variable or sporadic incomes, a 15-year mortgage makes sense only if there is a realistic plan to make the mortgage payment during the lean periods.
• The rates below are an average of quotes offered by many lenders and are adjusted to incorporate lender fees and points.
• Once you’ve selected your lender, you should ask your loan officer about the options you have to lock in a rate.
• Navigating today’s mortgage rates can be tricky, but don’t worry—we’re here to help.
• In fact, first-time home buyers put only 6 percent down on average.

How to refinance your current mortgage

The main benefit of a 20-year mortgage is the savings homeowners receive from lower interest rates and paying it off sooner than 30 years. Use the loan amount printed on your preapproval letter as a guide for your house-hunting journey, but avoid borrowing the maximum. Our mortgage calculator can help you determine whether your mortgage payment leaves enough room in your budget to comfortably cover your other monthly bills.

How to Get the Best Mortgage Rates

• Even lowering your rate by a few basis points can save you money in the long run.
• Because they have to be exceptionally strong or weak for us to rely on them.
• For those who plan to stay in their home long-term, a fixed-rate mortgage is typically recommended.
• In this case, a lender might raise its rates to deter new business and give loan officers time to process loans currently in the pipeline.

However, this decline may be slow, and short-term rate increases are possible. If you’re closing soon, locking in your rate may offer stability, but trust your instincts and risk tolerance when deciding whether to float or lock. A good mortgage rate is one that aligns with current market trends and your financial situation. As of January 2, 2025, the average rate for a 30-year fixed mortgage is 6.91%, while the 15-year fixed mortgage averaged 6.13%, according to Freddie Mac. The 15-year FRM offers borrowers a briefer term with less accrued interest, but the monthly payments will be much higher.

America’s Riskiest Borrowers Are Nursing a Financial Hangover

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.

Pros and cons of a 30-year mortgage

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.

• A conventional mortgage can be fixed-rate with terms varying from 10 to 30 years or an adjustable-rate mortgage (ARM) with terms up to 10 years.
• You will get an idea of the interest rate, APR, closing costs, and monthly payment, but you should bear in mind that these numbers will change depending on your credit score and other financial details.
• These rates are benchmark rates for those with good credit, not the teaser rates that make everyone think they will get the lowest rate available.
• Annual percentage rate (APR) can help you compare the ‘real’ cost of two loans.
• They see an opportunity to lock in a lower rate and payment for the rest of their loan.
• 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.
• Learn about her role at Polly, her passion for data analytics, and her vision for innovation, mentorship, and improving customer experiences in the mortgage sector.
• I’ve covered the housing market, mortgages and real estate for the past 12 years.

Why are mortgage rates so high?

• Lenders measure your debt-to-income (DTI) ratio by dividing your total monthly debt by your before-tax income.
• Take the time to explore offerings from various lenders, including banks, credit unions, and online mortgage providers.
• Loan rates are impacted by interest rates on bonds, mortgage backed securities and actions taken by the Federal Reserve.
• Additionally, applying for multiple mortgages in a short period of time won’t affect your credit score as each application is counted as one query within a 45-day window.
• This profile included a credit score ranging from 700 to 760 with a property loan-to-value ratio (LTV) of 80%.
• 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.
• A 15-year mortgage is a smart option for borrowers who want to save money on interest and can afford larger monthly payments without compromising their other financial goals and responsibilities.
• While other mortgage rates sites show rates being quoted to borrowers with top credit profiles, the HousingWire Mortgage Rates Center shows actual locked rates with borrowers of all credit profiles.
• If you’re ready to pursue a mortgage, you can use our ranking of the best mortgage lenders to assess your options.
• Getting the hang of the ins and outs of interest rates can be challenging.

A teaser rate is a lower initial rate offered on a mortgage loan for a set time period before the actual fixed mortgage rate goes into effect. Teaser rates are often obtained through an adjustable-rate mortgage (ARM) loan, that have 3-, 5- or 7-year options. The Fed doesn’t set mortgage rates, but its decisions move factors that influence them, including the 10-year Treasury yield, often the benchmark for fixed mortgage rates. Mortgage rates change daily due to fluctuations in the broader economy. Factors such as inflation, economic growth and policies set by the Federal Reserve can impact rates.

Rates remain elevated Today’s mortgage rates, January 2, 2025

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?

And if you’re refinancing, your financial situation may have changed enough that your current lender is no longer your best bet. They see an opportunity to lock in a lower rate and payment for the rest of their loan. Auto sales for December will be released throughout the day as individual vehicle manufacturers provide their sales figures. The minimum you’ll need to put down will depend on the type of mortgage. Many lenders require a minimum of 5% to 20%, whereas others like government-backed ones require at least 3.5%.

• The central bank doesn’t set specific mortgage rates, but its policies set the tone for what banks and other lenders charge for loans.
• Another important consideration in this market is determining how long you plan to stay in the home.
• Rates, payments, and all information displayed are for informational purposes only and are subject to change without notice.
• At the time this was published, the average 30-year fixed mortgage rate reached 6.95%.
• Discount points equate to percentage points – so, one discount point costs 1% of your mortgage amount, or $1,000 for every $100,000, and will lower the rate by a quarter of a percent, or 0.25.
• A mortgage is a type of loan used to purchase or maintain a home, land, or other types of real estate.

What Affects Current Mortgage Rates?

In April 2024, the Mortgage Bankers Association (MBA) forecast mortgage rates to hit 6.4% this year. However, rates currently average a few basis points above MBA’s forecast. The average weekly mortgage rate reached 6.84% for the week ending November 21, according to Freddie Mac, surging weekly over the course of October and into November but remaining lower than October 2023, when they peaked at 7.79%. The APR is the total cost of your loan, which is the best number to look at when you’re comparing rate quotes. Some lenders might offer a lower interest rate but their fees are higher than other lenders (with higher rates and lower fees), so you’ll want to compare APR, not just the interest rate. In some cases, the fees can be high enough to cancel out the savings of a low rate.

APRs not included. For our most recent APR information, please visit our

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.

Forbes Advisor Average Mortgage Rates for January 2025

Since a lender sets rates based on the risk they may take, borrowers who are less creditworthy or have a lower down payment amount may be quoted higher rates. In other words, the lower the risk, the lower the rate for the borrower. Between that time and July 2023, the Fed aggressively raised the federal funds rate to fight decades-high inflation. While the fed funds rate can influence mortgage rates, it doesn’t directly do so. In fact, the fed funds rate and mortgage rates can move in opposite directions. A 10-year home loan is also best for those who want to refinance their mortgage and have been paying down their existing loan for a while.

Interest rate differences have a bigger impact on your monthly payment the larger your loan is. The fee amounts shown above include estimates of loan costs and closing costs you may pay in connection with a mortgage transaction with the assumptions above. This includes fees the lender charges, including points and underwriting fees, and third party services the lender does not let you shop for such as a flood certification fee. It does not include title charges, recording costs, prepaids, initial escrow deposit, and other fees. Mortgage rates drop or rise daily, reacting to changing economic conditions, central bank policy decisions, and investor sentiment. Many forecasts predict mortgage rates will decrease gradually through 2025.

Unfortunately, some lenders don’t have the capacity or manpower to process a large number of refinance loan applications. Remember, every mortgage lender weighs these factors a little differently. The average 15-year FRM hit a record weekly low of 2.1% on July 29, 2021, and a record weekly high of 18.63% on Sep. 10, 1981, according to Freddie what are today’s mortgage rates Mac. It’s important to understand what will affect your individual rate and work towards optimizing your finances so you can receive the most competitive rate based on your financial situation. Generally, the higher your down payment, the lower your rate may be. Homeowners who put down at least 20% will be able to save the most.

Forecast: Mortgage rates to settle in 2025

You might be surprised to find that a lender is willing to give you a lower interest rate in order to keep your business. Rates for a home purchase and mortgage refinance are often similar. First, Richmond President Tom Barkin talked about his concerns over inflationary pressures and economic growth. Fed Governor Adriana Kugler also has an interview scheduled for 4pm ET. A pair of economic reports come out today, starting with the Institute for Supply Management’s index on the manufacturing sector.

Our daily mortgage rate averages are based on data from Zillow Group Marketplace. As this involves a different rate source and methodology, the averages will not directly align with those we published prior to May 1, 2024. All the historical data and analysis in this article and future articles is also based on this new data source.

1 adjustable-rate mortgage

The rates below are an average of quotes offered by many lenders and are adjusted to incorporate lender fees and points. The best mortgage rate for you will depend on your financial situation. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories, except where prohibited by law for our mortgage, home equity and other home lending products.

• Also, cashing out equity can result in a higher rate when refinancing.
• The APR reflects the total cost of your loan on an annual basis and any discount points being charged.
• After a promising downward trend, mortgage rates got spooked in October and began climbing again amid election anxieties and strong economic and jobs data ahead of the next federal interest rate decision in November.
• With a fixed-rate mortgage, your interest rate is set in stone for the entire length of your loan.
• As this involves a different rate source and methodology, the averages will not directly align with those we published prior to May 1, 2024.
• If you don’t lock in right away, a mortgage lender might give you a period of time—such as 30 days—to request a lock, or you might be able to wait until just before closing on the home.

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.

A conventional mortgage can be fixed-rate with terms varying from 10 to 30 years or an adjustable-rate mortgage (ARM) with terms up to 10 years. Jumbo loans offer the same fixed and variable rate terms as conventional mortgage loans, though their interest rates are typically lower. A 15-year mortgage is a smart option for borrowers who want to save money on interest and can afford larger monthly payments without compromising their other financial goals and responsibilities. Every Thursday, Freddie Mac, a government-sponsored buyer of mortgage loans, publishes a weekly average of 30-year mortgage rates. As recently as Sept. 26, the average sank to a two-year low of 6.08%.

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.

The Fed’s monetary policy directly affects adjustable-rate mortgages, since their interest rates are calculated using a number — known as an index — that fluctuates with the broader economy. Note that if you live in an HOA community or need private mortgage insurance, your monthly payment will be higher. Mortgage points represent a percentage of an underlying loan amount—one point equals 1% of the loan amount. Mortgage points are a way for the borrower to lower their interest rate on the mortgage by buying points down when they’re initially offered the mortgage. If you don’t lock in your rate, rising interest rates could force you to make a higher down payment or pay points on your closing agreement in order to lower your interest rate costs. 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.

In fact, first-time home buyers put only 6 percent down on average. So get multiple quotes from at least three different lenders to find the right one for you. Also, cashing out equity can result in a higher rate when refinancing. Of course, given so many unknowables, these forecasts might be even more speculative than usual. And their past record for accuracy — due to the volatile nature of interest rates — hasn’t been wildly impressive.

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.

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%.

Applying for a mortgage on your own is straightforward and most lenders offer online applications, so you don’t have to drive to a physical location. Additionally, applying for multiple mortgages in a short period of time won’t affect your credit score as each application is counted as one query within a 45-day window. Forbes Advisor provides daily and weekly average mortgage rates from trusted sources like Curinos and Freddie Mac, helping you make home-financing choices with confidence.

Remember, if rates drop sharply, you are free to refinance and lock in a lower rate and payment later on. Adjustable-rate loans have a low interest rate that’s fixed for a set number of years (typically five or seven). After the initial fixed-rate period, the interest rate adjusts every year based on market conditions. In this case, a lender might raise its rates to deter new business and give loan officers time to process loans currently in the pipeline. Looking further ahead, Fannie Mae and the Mortgage Bankers Association (MBA) each has a team of economists dedicated to monitoring and forecasting what will happen to the economy, the housing sector and mortgage rates.