How can you get a good deal in a high rate environment?

Mortgage rates continue to rise. According to Zillow, the national average 30-year fixed mortgage rate has risen six basis points to 6.78%and today’s 15-year fixed rate rises three basis points 6.07%.

The economic outlook for the first quarter of 2025 does not make it look like mortgage rates will fall anytime soon. So what can you do to get the lowest possible interest rate in a high rate environment? First, look for ways to improve your finances: improve your credit score, pay off debt, and save more for a down payment. Secondly, shop with several mortgage lenders. Find one that offers the type of mortgage loan you want, good rates and low fees.

Deepen: 5 strategies to get the lowest mortgage rate

Here are the current mortgage rates, according to the latest data from Zillow:

Fixed at 30 years: 6.78%
Fixed at 20 years: 6.55%
Fixed at 15 years: 6.07%
5/1 ARM: 7.16%
7/1 ARM: 7.08%
VA of 30 years: 6.20%
15-year VA: 5.68%
5/1 GO: 6.36%

Remember, these are national averages and rounded to the nearest hundredth.

Here are the current mortgage refinance rates, according to the latest data from Zillow:

Fixed at 30 years: 6.84%
Fixed at 20 years: 6.66%
Fixed at 15 years: 6.15%
5/1 ARM: 7.50%
7/1 ARM: 7.44%
VA of 30 years: 6.13%
15-year VA: 5.86%
5/1 GO: 6.05%

Again, the figures provided are national averages rounded to the nearest hundredth. Mortgage refinance rates are usually higher than rates when you buy a home, although this is not always the case.

Use the free one Yahoo Finance Mortgage Calculator to see how different mortgage terms and interest rates will affect your monthly payments.

Our calculator also takes into account factors like property taxes and homeowner’s insurance when determining your estimated monthly mortgage payment. This gives you a more realistic idea of your total monthly payment than if you were just looking at the mortgage principal and interest.

The average 30-year mortgage rate today is 6.78%. A 30-year term is the most popular type of mortgage because by spreading your payments over 360 months, your monthly payment is lower than with a short-term loan.

The average 15-year mortgage rate is 6.07% today. When deciding between a 15-year and 30-year mortgageconsider your short-term and long-term goals.

A 15-year mortgage has a lower interest rate than a 30-year term. This is great in the long run because you’ll pay off your loan 15 years earlier, and that’s 15 less years for interest to accrue. But the trade-off is that your monthly payment will be higher as you pay the same amount in half the time.

Let’s say you get one $300,000 mortgage. With a 30-year term and a rate of 6.78%, your monthly principal and interest payment would be approximately $1,952and would pay $402,641 of interest over the life of your loan, on top of that original $300,000.

If you get the same $300,000 mortgage but with a 15-year term and a rate of 6.07%, your monthly payment would increase to $2,543. But I would just pay $157,727 in interest over the years.

With a fixed rate mortgageyour rate is locked in for the life of your loan. However, you will get a new rate if you refinance your mortgage.

An adjustable rate mortgage keeps your rate the same for a predetermined period of time. The rate will then go up or down based on a number of factors, including the economy and the maximum amount your rate can change under your contract. For example, with a 7/1 ARM, your rate would be locked in for the first seven years, then change every year for the remaining 23 years of your term.

Adjustable rates usually start lower than fixed rates, but after the initial rate lock period ends, the rate may go up. Lately, however, some fixed rates have started below adjustable rates. Talk to your lender about their rates before choosing one or the other.

Deepen: Fixed rate mortgage vs. at adjustable rate

Mortgage lenders typically offer the lowest mortgage rates to people with higher down payments, excellent or excellent credit scores, and low debt-to-income ratios. So if you want a lower rate, try saving more, improving your credit scoreor pay off any debt before starting to buy homes.

Waiting for rates to drop probably isn’t the best method to get the lowest mortgage rate right now, unless you’re in a rush and don’t mind waiting until the end of 2025. If you’re ready to buy, focus on your personal finance is probably the best way to lower your rate.

To find the best mortgage lender for your situation, apply pre-approval of the mortgage with three or four companies. Just be sure to apply them all in a short period of time; doing so will give you the most accurate comparisons and have the least impact on your credit score.

When choosing a lender, don’t just compare interest rates. look at the mortgage annual percentage rate (APR) — this takes into account the interest rate, discount points and fees. The APR, which is also expressed as a percentage, reflects the actual annual cost of borrowing money. This is probably the most important number to consider when comparing mortgage lenders.

According to Zillow, the national average 30-year mortgage rate is 6.78% and the average 15-year mortgage rate is 6.07%. But these are national averages, so the average in your area could be different. Averages tend to be higher in expensive areas of the US and lower in less expensive areas.

The 30-year fixed mortgage rate is 6.78% right now, according to Zillow. However, you may be able to get an even better rate with an excellent credit score, a large down payment, and a low debt-to-income ratio (DTI).

Mortgage rates are not expected to drop dramatically in the near future, although they may drop here and there.

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