Mortgage Rates Drop: What You Need to Know About 30-Year & 15-Year Loans!

Exciting news for homebuyers and those looking to refinance! As of Thursday, December 5, 2024, mortgage rates for both 30-year and 15-year fixed loans are making a favorable dip. With fresh employment figures and inflation data on the horizon, the upcoming reports will play a crucial role in determining if the Federal Reserve will drop the benchmark interest rate yet again at its final policy meeting of the year. Mortgage lenders are keenly observing these economic indicators as they often guide the rates on significant loans, like mortgages.

Currently, the average rate for a 30-year fixed mortgage sits at a competitive 6.79% for purchases and 6.81% for refinancing, marking a decrease of 13 basis points from 6.92% and 14 basis points from 6.95% in the previous week. For 15-year fixed mortgages, rates are now averaging 6.09% for purchasing and 6.14% for refinancing—down 11 and 8 basis points respectively from last week’s figures. Jumbo mortgages also reflect this trend, averaging at 6.84%.

⭐️ Must read: 6 ways to snag the lowest rate on your next mortgage

Current Purchase Rates as of December 5, 2024

Current Refinance Rates as of December 5, 2024

Mortgage rates are influenced by various factors, including inflation, economic trends, and the Federal Reserve’s target interest rate. Your individual credit score, down payment, and type of property can also greatly affect the rate you’re offered.

With rates fluctuating daily, it’s wise to lock in your mortgage rate once you find terms that align with your financial goals!

Your Mortgage Report: 30-Year Fixed Rates on the Move

The latest data reveals an average of 6.81% for 30-year fixed-rate mortgages, a slight drop from last week’s 6.84%. Meanwhile, 15-year fixed rates have climbed to 6.10%. Although these figures have come down from last year’s peaks, the market remains cautious as potential homebuyers stay on the sidelines.

“While the 30-year fixed-rate mortgage dropped ever so slightly, the market is in a wait-and-see mode,” says a leading economist. “The demand for homes is cooling, and inventory is still quite tight.”

4 Key Factors Impacting Your Mortgage Rate

Just a half percentage point can save you hundreds monthly! But remember, the rate offered to you hinges on your financial health and the specifics of the mortgage you choose.

• Your credit score. A solid credit score opens doors to better rates. Aim for a FICO score of at least 670 for the best mortgage deals.

• Your down payment. Putting down 20% or more can significantly lower your interest and eliminate pesky mortgage insurance!

• Your loan term. Choose wisely! Shorter terms usually mean lower interest rates but higher monthly payments. Longer terms can mean smaller payments but more interest overall.

• Interest rate type. Decide between fixed and variable rates. Fixed rates offer stability, while adjustable-rate mortgages (ARMs) can start lower but fluctuate over time.

Prequalification vs. Preapproval: Which Is Right for You?

Prequalification is a quick glance at your finances, giving you a rough idea of what you can afford. Preapproval is a more thorough examination, providing a more accurate estimate of your borrowing potential.

Mortgage Rates in the News

Mortgage lenders closely monitor the Federal Reserve’s actions, particularly the federal funds target interest rate. When the Fed rates fluctuate, mortgage rates often follow suit. As we navigate the post-pandemic economy, understanding these dynamics is crucial for making informed financial decisions.

With recent rate cuts and economic uncertainty, all eyes are on the Fed’s next meeting scheduled for December 17-18, where further cuts may be announced!

Dig deeper: Find out what to expect at the next Federal Reserve meeting and how it may affect your finances.

Frequently Asked Questions About Mortgage Rates

Can I Negotiate My Mortgage Rate?

While negotiating rates directly might be challenging, discussing options for reducing costs with lenders can be productive. Ask about mortgage points and other potential fees that can impact your overall costs.

Editor’s note: Rates shown are as of Thursday, December 5, 2024, at 6:15 a.m. ET. Rates can vary by region and are subject to change.