New Year, New Rates: Today’s Mortgage & Refinance Update for Jan 1, 2025!

As we step into 2025, the mortgage landscape is shifting. Recent data reveals a rise in mortgage rates, with the 30-year fixed rate climbing six basis points to a notable 6.70%, the 20-year fixed rate inching up eight basis points to 6.56%, and the 15-year fixed rate ascending seven basis points to 6.10%.

While experts predict a gradual decline in mortgage interest rates throughout 2025, don’t expect any sudden drops. If you’re eager to dive into homeownership, there are two golden strategies to capture the best rate: first, enhance your financial profile—think reducing debt or elevating your credit score; second, shop around for mortgage lenders to discover the perfect match for your mortgage needs, including fees and loan types.

Want to know more? Check out our guide on 5 strategies for getting the lowest mortgage rates.

Here’s a snapshot of today’s mortgage rates:

• 30-year fixed: 6.70%

• 20-year fixed: 6.56%

• 15-year fixed: 6.10%

• 5/1 ARM: 6.71%

• 7/1 ARM: 6.63%

• 30-year VA: 6.14%

• 15-year VA: 5.74%

• 5/1 VA: 6.25%

Remember, these figures represent national averages, rounded for your convenience.

Curious about how mortgage rates are determined? Discover more here.

Looking to refinance? Here are the current refinance rates:

• 30-year fixed: 6.69%

• 20-year fixed: 6.60%

• 15-year fixed: 6.05%

• 5/1 ARM: 6.04%

• 7/1 ARM: 6.64%

• 30-year VA: 6.03%

• 15-year VA: 5.80%

• 5/1 VA: 6.31%

Again, these are national averages, rounded for ease of understanding. Keep in mind that refinance rates can be higher than rates for purchasing a new home.

Want to crunch some numbers? Use our free mortgage calculator to visualize how different interest rates and loan lengths impact your monthly payments. It even factors in your home price and down payment!

Our calculator can help you account for homeowners insurance and property taxes, giving you a more precise monthly estimate than simple principal and interest calculations.

Why consider a 30-year fixed mortgage? Two key advantages stand out: lower monthly payments and predictable costs.

With a 30-year fixed-rate mortgage, you’ll benefit from lower monthly payments by spreading your repayment over a longer term. Plus, your interest rate remains stable, avoiding the unpredictability of adjustable-rate mortgages (ARMs).

However, it’s essential to weigh the downsides—specifically, the higher overall interest payments over 30 years compared to shorter terms.

On the flip side, a 15-year fixed mortgage comes with lower interest rates and allows you to pay off your home sooner, potentially saving you a significant amount on interest over time. But, be prepared for higher monthly payments.

Interested in comparing mortgage options? Learn more about 15-year vs. 30-year mortgages.

Adjustable-rate mortgages offer an enticing lower initial rate, but be cautious—they may lead to unpredictable payments if rates rise after the introductory period.

While the national average for a 30-year mortgage stands at 6.70%, remember that rates vary by location, especially in high-cost living areas.

Rates may decline in 2025, but the economy’s trajectory, influenced by various factors, including political shifts, remains uncertain.

Despite recent cuts to the federal funds rate, mortgage rates have seen an upward trend in recent weeks. Securing a low refinance rate requires the same strategic mindset as your initial home purchase—focus on improving credit and lowering your debt-to-income ratio.