Today's Mortgage Rates | Rates Rise as Investors Gear Up for Fed Cut

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• Mortgage rates for December 15, 2024, are hovering around the mid-6% range. 
• Rates are up slightly ahead of an expected Fed cut on Wednesday.
• As the Fed lowers its benchmark rate, mortgage rates should ease. But that hinges on inflation coming down.

Mortgage rates were around 6.20% at the start of last week, but they're up slightly today, according to Zillow data. Rates may ease a bit once the Federal Reserve's meeting wraps up later this week.

Traders overwhelmingly expect the Fed to announce another quarter-point cut on Wednesday, according to CME FedWatch, following cuts in September and November.

The Fed will also release an updated summary of economic projections at this meeting, which will give us some insight into where central bankers see the federal funds rate going in 2025. This will likely have an impact on mortgage rates. 

"The more interesting aspect of next Wednesday's announcement will be updates to the Fed's summary of economic projections and any forward guidance offered by Chair Powell in the ensuing press conference," Danielle Hale, Realtor.com's chief economist, said in an emailed statement. "I expect that we will see a pull-back in the Fed's expected cuts in 2025 relative to their September projections. This will underscore the Fed's commitment to fully reigning in inflation back to the 2% target."

If the Fed doesn't end up lowering rates as much as expected, mortgage rates might not drop as much. Analysts have already been revising their 2025 mortgage rate forecasts in light of recent stubborn inflation data, and many now expect rates to only decrease moderately next year.

Mortgage Rates Today

Mortgage Refinance Rates Today

Mortgage Calculator

Use our free mortgage calculator to see how today's mortgage rates will affect your monthly and long-term payments.

By plugging in different term lengths and interest rates, you'll see how your monthly payment could change.

30-Year Mortgage Rates

Average 30-year mortgage rates are around the mid-6% range, according to Zillow data. This rate was 6.56% in November. Rates rose substantially last month, though they're a bit lower now.

The 30-year fixed-rate mortgage is the most popular home loan. With this type of mortgage, you'll pay back what you borrowed over 30 years, and your interest rate won't change for the life of the loan.

The lengthy 30-year term allows you to spread out your payments over a long period of time, meaning you can keep your monthly payments lower and more manageable. The trade-off is that you'll have a higher rate than you would with shorter terms, like a 15-year mortgage. 

15-Year Mortgage Rates

Average 15-year mortgage rates have been hovering in the high 5% range, according to Zillow data. In November, 15-year rates averaged 5.92%.

If you want the predictability that comes with a fixed rate but are looking to spend less on interest over the life of your loan, a 15-year fixed-rate mortgage might be a good fit for you. Because these terms are shorter and have lower rates than 30-year fixed-rate mortgages, you could potentially save tens of thousands of dollars in interest. However, you'll have a higher monthly payment than you would with a longer term.

ARM Rates

Rates on adjustable-rate mortgages have been higher than fixed rates in recent days. Last month, the average mortgage rate for a 7/1 ARM was 6.82%, while the average rate for a 5/1 ARM was 6.83%, according to Zillow data. 

When you get an ARM, you'll have a fixed mortgage rate for a certain period of time, after which your rate will adjust periodically. On a 7/1 ARM, for example, your rate will stay fixed for seven years, and then adjust once a year after that until you pay off the loan or refinance.

ARM rates are often (but not always) lower than their fixed-rate counterparts, making an ARM a good deal if you're looking to save on your monthly mortgage payment. But the risk with an ARM is that your monthly payment could increase if rates are up when your rate starts adjusting. 

FHA Interest Rates

FHA interest rates were 5.41% last month, and they're higher today.

FHA loans are insured by the Federal Housing Administration. This federal backing allows lenders to work with borrowers with lower credit scores and less money for a down payment, making these loans a good option for low-income and first-time homebuyers. They also typically have lower rates compared to conventional mortgages.

To get an FHA loan, you'll need a credit score of at least 580 and a down payment of 3.5%. If you can afford to put 10% down on a house, you could qualify for an FHA loan with a score down to 500, though not all lenders offer this option.

VA Mortgage Rates

Current VA mortgage rates are around 5.70%, according to Zillow data. Last month, VA rates averaged 5.97%.

VA loans are available to veterans and military members who meet minimum service requirements. They're backed by the Department of Veterans Affairs, and require no down payment or mortgage insurance.

Mortgage Refinance Rates

Refinance rates have been comparable to purchase rates recently. Last month, 30-year refinance rates averaged 6.62%, while 15-year refinance rates were around 5.96%.

How Much Do Mortgage Rates Need to Drop to Refinance?

If you're wondering if you should refinance now, you'll need to crunch the numbers to see if it makes sense. Some experts advise only refinancing if you can reduce your rate by a percentage point or more, but it really comes down to whether it works for your individual circumstances.

If you can save enough each month by refinancing that you can recoup your costs in a reasonable amount of time, it might be worth it. You can calculate this by dividing your closing costs by the amount you're saving on your monthly mortgage payment. So, if you paid $3,000 to refinance and were able to lower your monthly payment by $200, it would take you 15 months to break even on your refinance.

5-Year Mortgage Rate Trends

Here's how 30-year and 15-year mortgage rates have trended over the last five years, according to Freddie Mac data.

What Factors Influence Mortgage Rates?

Mortgage rates are determined by a variety of different factors, including larger economic trends, Federal Reserve policy, your state's current mortgage rates, the type of loan you're getting, and your personal financial profile.

While many of these factors are out of your control, you can work on improving your credit score, paying off debt, and saving for a larger down payment to ensure you get the best rate possible.

How Does the Fed Affect Mortgage Rates?

The Fed aggressively raised the federal funds rate in 2022 and 2023 to slow economic growth and get inflation under control. As a result, mortgage rates spiked.

Mortgage rates aren't directly impacted by changes to the federal funds rate, but they often trend up or down ahead of Fed moves. This is because mortgage rates change based on investor demand for mortgage-backed securities, and this demand is often impacted by how investors expect Fed hikes to affect the broader economy. 

In September, the Fed started lowering its benchmark rate, and it cut rates again in November. Mortgage rates are still elevated, but over time they should ease as the Fed lowers rates.

Mortgage Rate Predictions 2025

Mortgage rates increased last month, but they're expected to drop next year as the Fed lowers its benchmark rate and inflation cools. However, that forecast could change depending on how the economy evolves in 2025. Right now, the Fed is poised to achieve a so-called "soft landing," where it successfully brings inflation back down to its 2% target without sparking an economic downturn. In this scenario, mortgage rates may only decrease moderately in 2025. 

But if the economy cools too much and a recession looks likely, rates may fall more substantially. Or, if inflation stops decelerating or ticks back up, mortgage rates could rise.