Rates Surge Past Summer Highs: What This Means for You!

Today’s mortgage interest rates are throwing a bit of a curveball—some are creeping up, while others are taking a dip! The latest data shows that the 30-year fixed mortgage rate has slipped just a notch to a striking 6.72%, marking its highest level since July.

So, the burning question on every potential homebuyer’s mind: Will mortgage rates drop enough in 2025 to finally make that dream home attainable? The answer? Well, it’s a mixed bag.

Not too long ago, experts were optimistic about falling mortgage rates for 2025. However, a whirlwind of factors—including the 10-year Treasury yield, a slowdown in anticipated Federal Reserve rate cuts, and political vibes—have tempered those predictions. According to recent forecasts, experts now anticipate that the 30-year fixed rate will hover around 6.60% in Q1 2025 and dip to approximately 6.20% by Q4 2025. It’s a cautious outlook from industry insiders.

If you’re holding out for a dramatic drop before taking the plunge into homeownership, you might want to rethink your strategy. Waiting could cost you more than you think!

What’s your game plan? 2025 housing market — Is it a good time to buy a house?

Here’s a snapshot of the latest mortgage rates:

• 30-year fixed: 6.72%

• 20-year fixed: 6.55%

• 15-year fixed: 6.12%

• 5/1 ARM: 6.73%

• 7/1 ARM: 6.54%

• 30-year VA: 6.15%

• 15-year VA: 5.66%

• 5/1 VA: 6.38%

These rates reflect national averages, rounded to the nearest hundredth. Keep in mind that local rates may vary!

Thinking about refinancing? Here are the current rates:

• 30-year fixed: 6.70%

• 20-year fixed: 6.53%

• 15-year fixed: 5.99%

• 5/1 ARM: 6.05%

• 7/1 ARM: 6.70%

• 30-year VA: 6.04%

• 15-year VA: 5.83%

• 5/1 VA: 5.84%

Remember, these are national averages, and refinance rates can sometimes be higher than rates for purchasing a home.

Curious about whether now’s a good time to refinance? Is now a good time to refinance your mortgage?

Utilize the free mortgage calculator to explore how different terms and interest rates can affect your monthly payments.

Our calculator doesn’t stop at just the mortgage principal and interest—it also includes factors like property taxes and homeowners insurance, giving you a clearer picture of your potential monthly outlay.

Right now, the average 30-year mortgage rate stands at 6.72%. This term is a favorite among homebuyers, as it allows you to spread your payments over 30 years, keeping monthly costs manageable.

Meanwhile, the average 15-year mortgage rate is pegged at 6.12%. When weighing the choice between a 15-year and a 30-year mortgage, consider whether your priorities lie in short-term savings or long-term benefits.

A 15-year mortgage typically offers a lower interest rate than a 30-year option, allowing you to pay off your loan in half the time—meaning you save on interest in the long run. However, brace yourself for higher monthly payments since you’re paying off the same amount in a shorter timeframe!

Consider this scenario: with a $300,000 mortgage, a 30-year term at a 6.72% rate would result in a monthly payment of around $1,940, with a whopping $398,334 in interest over the loan’s lifetime. Ouch!

Now, flip that to a 15-year term at a 6.12% rate, and your monthly payment jumps to $2,551, but you’d only fork over $159,191 in interest. It’s a trade-off that’s worth considering!

With a fixed-rate mortgage, your interest rate is locked in for the life of the loan, offering stability. Refinancing could get you a new rate, but keep in mind your current rate is secure.

On the flip side, an adjustable-rate mortgage keeps your rate fixed for an initial period, after which it fluctuates based on market conditions. For instance, with a 7/1 ARM, your initial rate is locked for seven years, then it adjusts annually for the next 23 years. Risky or savvy? You decide!

While adjustable rates often start lower than fixed rates, recent trends have seen some fixed rates dipping below adjustable ones. It’s wise to chat with your lender to weigh your options!

Want to dive deeper? Fixed-rate vs. adjustable-rate mortgages

Mortgage lenders typically offer the best rates to those who come prepared—with higher down payments, solid credit scores, and low debt-to-income ratios. So, if you’re aiming for that lower rate, beef up your savings, improve your credit score, and tackle your debts before diving into the housing market!

If you’re hoping for rates to drop, be cautious. Unless you have no pressing timeline and can afford to wait until late 2024 or even 2025, focusing on your financial health is your best bet to snagging a lower rate.

To discover the best mortgage lender for your situation, apply for mortgage preapproval with several lenders. Just make sure to do this within a short window to keep your credit score intact while getting the best deals!

When shopping for a lender, don’t just look at interest rates. Pay attention to the mortgage annual percentage rate (APR)—this encompasses the interest rate, any fees, and discount points, giving you a fuller picture of your borrowing costs. This could be the key number to guide your decision!

As of today, the national average for a 30-year mortgage stands at 6.72%, while the average for a 15-year mortgage is at 6.12%. But remember, these are just averages—your local market might tell a different story!

Currently, the average 30-year fixed rate is sitting at 6.72%. However, if you have excellent credit and a hefty down payment, you might just snag an even better deal!

While a drastic drop in mortgage rates isn’t on the immediate horizon, expect small fluctuations as we move forward. Keep your eyes peeled!