Mortgage rates moved in different directions this week, according to data compiled by Bankrate. See the table below for a breakdown of how each loan type moved.
Mortgage rates could gradually come down this year, according to Greg McBride, CFA, Bankrate chief financial analyst. As the Federal Reserve held off on hikes at the end of 2023, the average 30-year mortgage rate dove to under 7 percent. The central bank now expects to cut rates in 2024 — a direction that would affect many areas of the economy, including on the 10-year Treasury, the main driver of fixed mortgage rates.
“The 10-year Treasury yield that serves as a baseline for fixed mortgage rates will have a bouncy journey lower, moving back above 4 percent early in 2024 but trending lower as inflation cools and the Fed gets closer to cutting rates,” says McBride. “For mortgage rates, that portends a general downtrend — albeit with fits and starts — in 2024.”
Rates last updated January 11, 2024.
These rates are marketplace averages based on the assumptions indicated here. Actual rates displayed across the site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Thursday, January 11th, 2024 at 7:30 a.m.
Today’s 30-year mortgage rate flat for the week
Today’s average rate for the benchmark 30-year fixed mortgage is 7.06 percent, unchanged from a week ago. A month ago, the average rate on a 30-year fixed mortgage was higher, at 7.21 percent.
At the current average rate, you’ll pay a combined $669.34 per month in principal and interest for every $100,000 you borrow.
There are many benefits to choosing a fixed-rate mortgage when buying new house, including predictable mortgage payments.
Learn more: What is a fixed-rate mortgage and how does it work?
15-year mortgage rate moves up, +0.01%
The average 15-year fixed-mortgage rate is 6.43 percent, up 1 basis point over the last week.
Monthly payments on a 15-year fixed mortgage at that rate will cost approximately $867 per $100,000 borrowed. That’s clearly much higher than the monthly payment would be on a 30-year mortgage at that rate, but it comes with some big advantages: You’ll come out several thousand dollars ahead over the life of the loan in total interest paid and build equity much more quickly.
5/1 adjustable rate mortgage advances, +0.01%
The average rate on a 5/1 adjustable rate mortgage is 6.41 percent, ticking up 1 basis point since the same time last week.
Adjustable-rate mortgages, or ARMs, are mortgage loans that come with a floating interest rate. To put it another way, the interest rate will change at regular intervals, unlike fixed-rate mortgages. These loan types are best for those who expect to refinance or sell before the first or second adjustment. Rates could be considerably higher when the loan first adjusts, and thereafter.
While borrowers shunned ARMs during the pandemic days of super-low rates, this type of loan has made a comeback as mortgage rates have risen.
Monthly payments on a 5/1 ARM at 6.41 percent would cost about $626 for each $100,000 borrowed over the initial five years, but could climb hundreds of dollars higher afterward, depending on the loan’s terms.
Jumbo mortgage interest rate falls, -0.03%
The current average rate you’ll pay for jumbo mortgages is 7.10 percent, a decrease of 3 basis points over the last week. This time a month ago, the average rate for jumbo mortgages was above that, at 7.25 percent.
At today’s average jumbo rate, you’ll pay $672.03 per month in principal and interest for every $100,000 you borrow. That represents a decline of $2.03 over what it would have been last week.
Refinance rates
30-year mortgage refinance rate trends upward, +0.04%
The average 30-year fixed-refinance rate is 7.25 percent, up 4 basis points since the same time last week. A month ago, the average rate on a 30-year fixed refinance was higher, at 7.30 percent.
At the current average rate, you’ll pay $682.18 per month in principal and interest for every $100,000 you borrow. That’s $2.71 higher compared with last week.
Where are mortgage rates going?
At its most recent meeting in December, the Federal Reserve signaled it was done raising interest rates and would begin cuts in 2024. In response, mortgage rates dropped to under 7 percent, and remain there as of early January.
This dynamic could hold throughout the year, says McBride.
“Mortgage rates will spend the bulk of the year in the 6s, with movement below 6 percent confined to the back half of the year,” says McBride.
The rates on 30-year mortgages mostly follow the 10-year treasury, which shifts continuously as economic conditions dictate, while the cost of variable-rate home loans mirror the Fed’s moves. These broader factors influence overall rate movement. Your rate might be higher or lower than what trends show, depending on your credit score and other factors.
What these rates mean for your mortgage
While mortgage rates are notoriously volatile, there is some consensus that we won’t see rates back at 3 percent. If you’re shopping for a mortgage now, it might be wise to lock your rate when you find an affordable loan. If your house-hunt is taking longer than anticipated, revisit your budget so you’ll know exactly how much house you can afford at prevailing market rates.
Keep in mind: You could save thousands over the life of your mortgage by getting at least three loan offers, according to Freddie Mac research. You don’t have to stick with your bank or credit union, either. There are many types of mortgage lenders, including online-only and local, smaller shops.
“All too often, some [homebuyers] take the path of least resistance when seeking a mortgage, in part because the process of buying a home can be stressful, complicated and time-consuming,” says Mark Hamrick, senior economic analyst for Bankrate. “But when we’re talking about the potential of saving a lot of money, seeking the best deal on a mortgage has an excellent return on investment. Why leave that money on the table when all it takes is a bit more effort to shop around for the best rate, or lowest cost, on a mortgage?”
More on current mortgage rates
Methodology
Bankrate displays two sets of rate averages that are produced from two surveys we conduct: one daily (“overnight averages”) and the other weekly (“Bankrate Monitor averages”).
The rates on this page represent our overnight averages. For these averages, APRs and rates are based on no existing relationship or automatic payments.
Learn more about Bankrate’s rate averages, editorial guidelines and how we make money.
Source: bankrate.com