Mortgage and refinance rates today, January 4, 2025: Fixed rates don’t move much

Mortgage rates are falling today – but just barely. According to Zillow, the 30-year fixed mortgage rate decreased by one basis point 6.67%and the 15-year fixed rate fell four basis points to 6.00%.

Rates will probably decrease throughout 2025, but not drastically. If you’re otherwise ready to buy a home, now might be as good a time as any to start house hunting.

Dig deeper: Are you going to buy a house? How to know if you are ready.

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

• 30 years fixed: 6.67%

• 20 years fixed: 6.51%

• 15 years fixed: 6.00%

• 5/1 ARM: 6.68%

• 7/1 ARM: 6.65%

• 30 years ago: 6.08%

• VA of 15 years: 5.63%

• 5/1 VA: 6.23%

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

Learn more: 5 strategies to get the lowest mortgage rates

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

• 30 years fixed: 6.65%

• 20 years fixed: 6.62%

• 15 years fixed: 5.89%

• 5/1 ARM: 6.04%

• 7/1 ARM: 6.68%

• 30 years ago: 6.05%

• VA of 15 years: 5.77%

• 5/1 VA: 5.97%

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.

Use Yahoo Finance for free mortgage calculator to see how various interest rates and term lengths impact your monthly mortgage payment. It also shows how the price of the house and the amount of the down payment play into things.

Our calculator includes homeowners insurance and property taxes in your estimated monthly payment. You also have the option to enter costs for private mortgage insurance (PMI) and homeowner association rights, if those apply to you. These details result in a more accurate monthly payment estimate than if you just calculated your mortgage principal and interest.

There are two main advantages to a 30-year fixed mortgage: Your payments are lower, and your monthly payments are predictable.

A 30-year fixed-rate mortgage has relatively low monthly payments because it spreads your repayment over a longer period of time than with, say, a 15-year mortgage. Your payments are predictable because, unlike an adjustable rate mortgage (ARM), your rate doesn’t change from year to year. Most years, the only things that could affect your monthly payment are any changes to your home owners insurance o property taxes.

The main disadvantage to the 30-year fixed mortgage rates is mortgage interest – short and long term.

A 30-year fixed term comes with a higher rate than a shorter fixed term, and is higher than the introductory rate on a 30-year ARM. The higher your rate, the higher your monthly payment. You’ll also pay a lot more in interest over the life of your loan because of the higher rate and longer term.

The pros and cons of 15-year fixed mortgage rates are basically traded off from 30-year rates. Yes, your monthly payments will still be predictable, but another advantage is that shorter terms come with lower interest rates. Not to mention, you’ll pay off your mortgage 15 years sooner. So you’ll potentially save hundreds of thousands of dollars in interest over the course of your loan.

However, because you pay the same amount in half the time, your monthly payments will be higher than if you choose a 30-year term.

Dig deeper: 15-year vs. 30-year mortgages

Adjustable rate mortgages lock in your rate for a predetermined amount of time, then change it periodically. For example, with a 5/1 ARM, your rate stays the same for the first five years and then goes up or down once a year for the remaining 25 years.

The main advantage is that the introductory rate is usually lower than what you would get with a 30-year fixed rate, so your monthly payments will be lower. (Actual average rates do not necessarily reflect this – in some cases, fixed rates are actually lower. Talk to your mover before deciding between a fixed or adjustable rate).

With an ARM, you have no idea what the mortgage rates will be like once the intro-rate period ends, so you risk your rate going up later. This could end up costing you more, and your monthly payments are unpredictable from year to year.

But if you plan to move before the intro-rate period is over, you can take advantage of a low rate without risking a rate increase down the road.

Learn more: Adjustable-rate versus fixed-rate mortgage

First of all, Now is a relatively good time to buy a house compared to the last two years. Home prices are not as high as they were during the height of the COVID-19 pandemic. So, if you want or need to buy a house soon, you should feel good about the current climate.

In addition, mortgage rates are not expected to drop dramatically throughout 2025 as people expected a few months ago. Since rates are wavering right now – and competition tends to be less fierce in the winter months – it could be a good time to buy.

Read more: What is more important, the price of your house or the mortgage rate?

According to Zillow, the national average 30-year mortgage rate is 6.67% right now. But keep in mind that averages may vary depending on where you live. For example, if you buy in a city with a high cost of living, the taxes could be higher.

Mortgage rates are expected to decline overall in 2025, although they probably won’t come down anytime soon.

Mortgage rates have been going back and forth for a couple of weeks, and they were down a bit today.

In many ways, securing a mortgage refinancing rate is similar to when you bought your home. Try to improve your credit score and lower your debt-to-income ratio (DTI). Refinancing for a shorter term will also land you a lower rate, although your monthly mortgage payments will be higher.