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 rose six basis points to 6.78%and today’s 15-year fixed interest rate is three basis points 6.07%.

The economic outlook for Q1 2025 doesn’t look like mortgage rates will drop 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 debts, and save more for a down payment. Second, shop around with multiple mortgage lenders. Find one that offers the type of mortgage loan you want, good rates and low fees.

Dig deeper: 5 strategies to get the lowest mortgage rate

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

• 30 years fixed: 6.78%

• 20 years fixed: 6.55%

• 15 years fixed: 6.07%

• 5/1 ARM: 7.16%

• 7/1 ARM: 7.08%

• 30 years ago: 6.20%

• VA of 15 years: 5.68%

• 5/1 VA: 6.36%

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

Here are today’s mortgage refinance rates, according to the latest Zillow data:

• 30 years fixed: 6.84%

• 20 years fixed: 6.66%

• 15 years fixed: 6.15%

• 5/1 ARM: 7.50%

• 7/1 ARM: 7.44%

• 30 years ago: 6.13%

• VA of 15 years: 5.86%

• 5/1 VA: 6.05%

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

Read more: Is now a good time to refinance your mortgage?

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

Our calculator also considers factors such as 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 only looked at the principal and interest on the mortgage.

The average 30-year mortgage 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 shorter term loan.

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

A 15-year mortgage comes with a lower interest rate than a 30-year term. This is great in the long term, because you will pay off your loan 15 years earlier, and that is 15 years less for the interest to accumulate. 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 have a $300,000 mortgage. With a 30-year term and a rate of 6.78%, your monthly payment towards principal and interest would be approx. $1,952and you would have to pay $402,641 in interest over the life of your loan – on top of that original $300,000.

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

With a fixed rate mortgageyour rate is locked for the life of your loan. You will have a new rate if you refinance your mortgage, however.

An adjustable rate mortgage keep your rate the same for a predetermined period of time. So, the rate will go up or down depending on many factors, such as the economy and the maximum amount that your rate can change according to your contract. For example, with a 7/1 ARM, your rate would be locked for the first seven years, then change every year for the remaining 23 years of your term.

Adjustable rates are usually lower than fixed rates, but once the initial rate lock period ends, it’s possible that your rate will increase. Lately, however, some fixed rates have started lower than adjustable rates. Talk to your driver about their rates before choosing one or the other.

Dig deeper: Fixed rate mortgages versus adjustable rate mortgages

Mortgage lenders typically give 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 to save more, improve your credit scoreor pay off some debt before you start buying houses.

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

To find the the best mortgage lender for your situation, ask mortgage pre-approval with three or four companies. Just make sure you apply to all of them in a short amount 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 factors in the interest rate, any discount points and fees. The APR, which is also expressed as a percentage, reflects the true annual cost of borrowing money. This is probably the most important number to look at 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 are typically higher in expensive parts of the United States and lower in less expensive areas.

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

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