Lower Mortgage and Refinance Rates in the USA – Secure a Better Deal Today

Mortgage rates have dropped, creating an opportunity for buyers and homeowners looking to refinance. According to Zillow, the 30-year fixed mortgage rate has decreased by nine basis points to 6.54%, while the 15-year fixed rate has fallen by 11 basis points to 5.82%.

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With ongoing trade concerns and new tariffs on Mexico, Canada, and China, mortgage rates may rise again soon. Locking in a lower rate now could help buyers secure better terms before potential increases. Additionally, purchasing a home before the spring market picks up may mean facing less competition.

Latest Mortgage Rates

Based on Zillow's most recent data, here are the national average mortgage rates:

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• 30-year fixed: 6.54%

• 20-year fixed: 6.32%

• 15-year fixed: 5.82%

• 5/1 ARM: 6.64%

• 7/1 ARM: 6.89%

• 30-year VA: 6.02%

• 15-year VA: 5.40%

• 5/1 VA: 6.54%

These figures are national averages, rounded to the nearest hundredth.

Current Refinance Rates

Refinance rates have also declined, according to Zillow’s latest report:

• 30-year fixed: 6.55%

• 20-year fixed: 6.24%

• 15-year fixed: 5.81%

• 5/1 ARM: 6.77%

• 7/1 ARM: 6.32%

• 30-year VA: 5.94%

• 15-year VA: 5.51%

• 5/1 VA: 6.11%

• 30-year FHA: 6.41%

• 15-year FHA: 5.81%

Refinance rates can be slightly higher than purchase rates, but this varies depending on the lender and market conditions. Homeowners looking to reduce their payments or shorten loan terms may benefit from acting while rates are lower.

Choosing Between a 30-Year and 15-Year Mortgage

Two of the most popular mortgage types are 30-year and 15-year fixed-rate loans. Each offers unique benefits:

• 30-year mortgage: Lower monthly payments but more interest paid over time.

• 15-year mortgage: Higher monthly payments but lower interest rates, allowing for faster repayment and overall savings.

Selecting the right mortgage term depends on a borrower’s financial goals and budget.

What Influences Mortgage Rates?

Mortgage rates are shaped by personal financial factors and broader economic conditions.

Factors borrowers can control:

• Credit score: Higher scores typically secure better rates.

• Debt-to-income ratio: Lower debt levels improve borrowing terms.

• Down payment: A larger down payment may result in a lower interest rate.

Factors beyond borrower control:

• Economic conditions: Inflation, job market trends, and Federal Reserve policies impact interest rates.

• Housing market dynamics: Supply and demand influence mortgage rates nationwide.

Should You Secure a Rate Now?

With mortgage rates currently lower, locking in a loan or refinancing could lead to long-term savings. However, rates may change as economic policies shift and inflation trends develop. Staying informed and consulting lenders can help buyers and homeowners determine the best time to move forward.

For those planning to buy or refinance, today’s lower rates present an opportunity to secure favorable terms before any potential increases.

Also Read: Mortgage Rates for January 27, 2025: Fed Meeting Could Impact Rates | Current Rates Update