Should you wait for lower rates?

Mortgage rates have fallen for several days in a row, but are still relatively high. According to Zillow, the current 30-year fixed interest rate is 6.67%and the 15-year fixed rate is 5.95%. So, should you buy early or hold out for lower prices?

First, mortgage rates should decline throughout 2025, but the declines will likely be gradual. Second, trying to time the real estate market is like timing the stock market. It’s often unsuccessful because there are numerous factors at play and you don’t know what will happen at any given moment. If you are financially ready to buy a home, you may want to start the process sooner rather than later. Remember, you can always refinance to a lower rate in a few years.

Do you have questions about buying, owning or selling a home in today’s market? Submit your question on the Yahoo Realtor Panel this google form.

Deepen: Is 2025 a good time to buy a house?

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

Fixed at 30 years: 6.67%
Fixed at 20 years: 6.45%
Fixed at 15 years: 5.95%
5/1 ARM: 6.94%
7/1 ARM: 6.91%
VA of 30 years: 6.12%
15-year VA: 5.56%
5/1 GO: 6.16%
30-year FHA: 6.33%
5/1 FHA: 6.38%

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: 6.67%
Fixed at 20 years: 6.46%
Fixed at 15 years: 5.92%
5/1 ARM: 7.24%
7/1 ARM: 7.45%
VA of 30 years: 6.10%
15-year VA: 5.72%
5/1 GO: 6.04%
5/1 FHA: 6.50%

Again, the figures provided are national averages rounded to the nearest hundredth. Although this is not always the case, mortgage refinancing rates are usually slightly higher than purchase rates.

A mortgage calculator can help you see how different mortgage terms and interest rates will affect your monthly payments. Use the free one Yahoo Finance Mortgage Calculator to play with different results.

Our calculator also takes into account factors like property taxes and homeowner’s insurance when estimating your monthly mortgage payment. This gives you a better 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 6.67%. A 30-year term is the most popular type of mortgage because by spreading your payments over 360 months, your monthly payment is relatively low.

If you had one $300,000 mortgage with a 30-year term and a rate of 6.67%, your monthly principal and interest payment would be approximately $1,930and would pay $394,752 of interest over the life of your loan, on top of that original $300,000.

The average 15-year mortgage rate is 5.95% today. Several factors must be considered when deciding between a 15 and 30 year mortgage.

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 the interest to compound.

However, because you are cutting the same debt payment in half, your monthly payments will be higher.

If you get the same $300,000 mortgage but with a 15-year term and a 5.95% rate, your monthly payment would increase to $2,523 — But I would only pay $154,225 in interest over the years.

Deepen: How much house can I afford? Use our home affordability calculator.

with a adjustable rate mortgageyour rate is locked in for a set period of time and then increases or decreases periodically. For example, with a 5/1 ARM, your rate stays the same for the first five years and then changes every year.

Adjustable rates usually start lower than fixed rates, but you run the risk of your rate going up after the introductory rate lock period is over. But an ARM might be a good fit if you plan to sell the home before the rate lock period ends; that way, you pay a lower rate without worrying about it going up later.

ARM rates have also been higher than fixed rates lately. Before committing to a fixed or adjustable rate mortgage, be sure to research the best lenders and rates. Some will offer more competitive adjustable rates than others.

Mortgage lenders typically offer the lowest mortgage rates to people with higher down payments, 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.

You can also lower your interest rate permanently by paying down discount points at closing A temporary interest rate reduction it is also an option; for example, you might get a 6% rate on a 2-1 buy. Your rate would start at 4% in the first year, increase to 5% in the second year, and then settle at 6% for the rest of your term.

Just think about whether these rewards are worth the extra money at closing. Ask yourself if you’ll be staying home long enough for the amount you save with a lower rate to offset the cost of buying your rate before you make your decision.

More information: How to get the lowest mortgage rates

Here are the interest rates for some of the most popular mortgage terms: According to Zillow data, the national average 30-year fixed rate is 6.67%, 15-year fixed rate is 5.95% and the 5/1 ARM rate is 6.94%.

The normal mortgage rate for a 30-year fixed loan is 6.67%. However, keep in mind that this is the national average based on Zillow data. The average may be higher or lower depending on where you live in the US

Mortgage rates probably won’t decline significantly in early 2025, although they could drop here and there.

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