January 5, 2025: Dive into Today’s Dropping Mortgage & Refinance Rates!

Feeling the heat of today’s mortgage market? If you’re dreaming of owning a home or refinancing your existing mortgage, you’re not alone. But here’s a silver lining: mortgage rates have taken a slight dip this week!

According to recent data, the average 30-year fixed mortgage rate has ticked down by five basis points to a cool 6.67%. Not to be outdone, the 15-year fixed rate has also dropped—now sitting at 6.00%, thanks to a 12 basis point decrease.

Curious about the current rates? Let’s break it down for you:

• 30-year fixed: 6.67%

• 20-year fixed: 6.51%

• 15-year fixed: 6.00%

• 5/1 ARM: 6.68%

• 7/1 ARM: 6.65%

• 30-year VA: 6.08%

• 15-year VA: 5.63%

• 5/1 VA: 6.23%

Keep in mind, these figures reflect national averages rounded to the nearest hundredth.

Now, for those considering a refinance, here are the latest rates:

• 30-year fixed: 6.65%

• 20-year fixed: 6.62%

• 15-year fixed: 5.89%

• 5/1 ARM: 6.04%

• 7/1 ARM: 6.68%

• 30-year VA: 6.05%

• 15-year VA: 5.77%

• 5/1 VA: 5.97%

Remember, these are national averages rounded to the nearest hundredth. Typically, mortgage refinance rates can be higher than those for purchasing a home, but there are exceptions.

Want to dive deeper? Check out the mortgage calculator to see how various terms and rates can shape your monthly payments.

Our calculator helps you factor in property taxes and homeowners insurance to give you a more accurate picture of your total monthly outlay—not just principal and interest.

With a 30-year mortgage averaging at 6.67%, it’s the most sought-after option for many buyers. Why? Spreading payments over 360 months keeps those monthly bills more manageable.

The 15-year mortgage is also tempting at 6.00%. Weighing the pros and cons between a 15-year and 30-year mortgage? Consider your immediate and future financial goals.

Sure, a 15-year term means lower interest rates and paying off your home faster, but it also means higher monthly payments. Balance is key!

For instance, let’s say you take out a $300,000 mortgage. A 30-year term at 6.67% brings your monthly payment to around $1,930, costing you a whopping $394,752 in interest over the life of the loan!

But if you opt for that same $300,000 mortgage at a 15-year term with a 6.00% rate, your monthly payment jumps to about $2,532, but your total interest plummets to $155,683.

Going for a fixed-rate mortgage means locking in your rate for the life of your loan—unless you choose to refinance.

Conversely, an adjustable-rate mortgage starts with a fixed rate for a set time, then varies based on the economy. For example, a 7/1 ARM keeps your rate steady for the first seven years before adjusting annually for the remaining term.

Adjustable rates can be lower at the start, but watch out—once that initial lock-in period ends, your rate could rise. Lately, some fixed rates have started lower than adjustable rates, so make sure to consult with your lender!

Want to know more? Fixed-rate vs. adjustable-rate mortgages

Mortgage lenders typically reward those with higher down payments, excellent credit scores, and low debt-to-income ratios with the best mortgage rates. Want to snag a lower rate? Consider saving more or boosting your credit score.

If you’re not in a rush, waiting for a dramatic drop in rates might be tempting, but if you’re ready to buy, focusing on your finances is your best bet for securing a great rate.

To find the best mortgage lender for you, consider applying for mortgage preapproval with a few companies. Do them all in a short period for the most accurate comparisons with minimal impact on your credit score.

Remember to not just compare interest rates when selecting a lender. Look into the annual percentage rate (APR) as well. It reflects the total cost of borrowing including fees and points, giving you the most comprehensive view of what you’ll actually pay.

Currently, the average 30-year mortgage rate is 6.67%, with the 15-year rate at 6.00%. However, these figures vary by region—so be sure to check local averages. Typically, urban areas see higher rates than more rural regions.

While the average 30-year mortgage rate stands at 6.67%, those with excellent credit and a decent down payment might snag even better rates!

Don’t expect mortgage rates to plummet anytime soon, but a slow decline isn’t off the table. Stay informed, stay proactive, and take charge of your home-buying journey!