30-year mortgage rates have been rising steadily. They are currently at 6.76%, up 6 basis points from yesterday, 14 basis points from last weekend, and 13 basis points from this time last month.
You may be wondering when mortgage rates will fall enough to noticeably affect your monthly payment. The answer? Probably not in 2024, but in 2025. The Federal Reserve may only cut the federal funds rate once this year, but it will likely cut it four times in 2025. When the federal funds rate falls, mortgage rates tend to follow.
Current mortgage interest rates
According to the latest Zillow data, current mortgage rates are as follows:
30-Year Fixed Rate: 6.76%
20-year fixed rate: 6.36%
15-year fixed rate: 5.98%
5/1 ARM: 6.50%
7/1 ARM: 6.67%
30-year VA: 5.87%
15-year VA: 5.49%
5/1 VA ARM: 6.25%
Please note that these are national averages and are rounded to one decimal place.
MORE: Is it a good time to buy a house?
Monthly Mortgage Payment Calculator
Use the free Yahoo Finance mortgage calculator to see how different mortgage terms and interest rates will affect your monthly payment.
Our calculator estimates your monthly mortgage payment by factoring in factors like property taxes and homeowners insurance, giving you a more realistic idea of what your total monthly payments will be than if you only looked at mortgage principal and interest.
30-year fixed mortgage rate vs. 15-year fixed mortgage rate
Currently, the average interest rate on a 30-year mortgage is 6.76%. The 30-year loan is the most popular mortgage because by spreading your payments out over 360 months, your monthly payments are lower than with shorter-term loans.
Currently, the average interest rate for a 15-year mortgage is 5.98%. When deciding between a 15-year mortgage or a 30-year mortgage, consider your short-term and long-term goals.
A 15-year loan will have a lower interest rate than a 30-year loan, which is great in the long run because you pay off your loan 15 years sooner and have 15 fewer years for interest to accumulate, but your monthly payments will be higher because you're paying off the same amount in half the time.
Let's say you take out a $300,000 mortgage. With a 30-year term and a 6.76% interest rate, your monthly payments for principal and interest would be about $1,948, meaning you'll pay $401,204 in interest over the life of the loan on top of the original $300,000.
For that same $300,000 mortgage with a 15-year term and 5.98% interest rate, your monthly payment would jump to $2,528, but over the years you'd only pay $155,099 in interest.
Fixed rate mortgages vs adjustable rate mortgages
With a fixed-rate mortgage, your interest rate stays the same for the life of your loan, unless you refinance your mortgage and a new interest rate applies.
With an adjustable rate mortgage, your interest rate stays constant for a set period of time. After that, your interest rate can go up or down depending on several factors, including economic conditions and the maximum amount your interest rate can change under your contract. For example, a 7/1 adjustable rate mortgage will keep your interest rate fixed for the first seven years and then change annually for the remaining 23 years.
Floating interest rates usually start out lower than fixed interest rates, but once the initial interest rate lock-in period is over, the interest rate may increase. However, more recently, fixed interest rates have started out lower than floating interest rates.
Learn more: Adjustable rate mortgages vs fixed rate mortgages
How to keep mortgage interest rates low
Mortgage lenders typically offer the lowest mortgage rates to people with high down payments, good or excellent credit scores, and low debt-to-income ratios, so if you want to lower your interest rate, try increasing your savings, improving your credit score, and paying off some of your debt before you start shopping for a home.
Waiting for rates to drop probably isn't the best way to get the lowest mortgage rates right now unless you're really in no hurry and don't mind waiting until the end of 2024 or 2025. If you're ready to buy, focusing on your personal finances is probably the best way to get a lower interest rate.
Read more: How to get the lowest mortgage interest rate
How to Choose a Mortgage Lender
To find the best mortgage lender for your situation, apply for mortgage pre-approval with three to four companies, but make sure you apply to all of them within a short period of time, as this will give you the most accurate comparison and will have less impact on your credit score.
When choosing a lender, don't just compare interest rates. Look at the mortgage's annual percentage rate (APR), which includes interest, discount points, and fees. The APR is also expressed as a percentage and reflects the actual yearly cost of borrowing money. This is the most important number to look at when comparing mortgage lenders.
Current Mortgage Rates: FAQs
What are the current mortgage interest rates?
According to Zillow, the national average 30-year mortgage rate is 6.76%, and the average 15-year mortgage rate is 5.98%. However, these are national averages, so the average in your area may vary. Expensive areas of the U.S. have higher average interest rates, while cheaper areas have lower average interest rates.
What is a fair mortgage interest rate right now?
According to Zillow, the average interest rate on a 30-year fixed mortgage is currently 6.76%, but if you have a great credit score, a large down payment and a low debt-to-income ratio (DTI), you could potentially get a better rate.
Are mortgage rates expected to fall?
Yes, mortgage rates are expected to fall slightly in 2024. Then, a more substantial drop is predicted in 2025, when experts expect the Federal Reserve to cut the federal funds rate several times.