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National mortgage rates were mostly down compared to a week ago, according to rates data collected by Bankrate. Average rates for 30-year fixed, 5/1 ARMs and jumbo loans receded, while rates for 15-year mortgages increased.
Mortgage rates could gradually come down this year, according to Greg McBride, CFA, Bankrate chief financial analyst. Rates began retreating in the back half of 2023 as inflation continued to cool and the Federal Reserve halted rate increases. The central bank now forecasts rate cuts in 2024 — a move that would have broad economic impact, including on the 10-year Treasury, a key benchmark for fixed-rate mortgages.
“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 accurate as of January 29, 2024.
The rates listed here are marketplace averages based on the assumptions shown here. Actual rates available on-site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Monday, January 29th, 2024 at 7:30 a.m.
Today’s 30-year mortgage rate eases, -0.04%
The average rate you’ll pay for a 30-year fixed mortgage today is 6.99 percent, down 4 basis points over the last week. Last month on the 29th, the average rate on a 30-year fixed mortgage was unchanged, at 6.99 percent.
At the current average rate, you’ll pay principal and interest of $664.63 for every $100,000 you borrow. That’s down $2.69 from what it would have been last week.
The 30-year mortgage is the most popular home loan, and it has a number of advantages. Among them:
- Lower monthly payment: Compared to a shorter-term mortgage, such as 15 years, the 30-year mortgage offers more affordable monthly payments spread over time.
- Stability: With a 30-year fixed mortgage, you lock in a set principal and interest payment, making it easier to plan your housing expenses for the long term. Remember: Your monthly housing payment can change if your homeowners insurance premiums and property taxes go up or, less likely, down.
- Buying power: Because you have lower payments, you might qualify for a bigger loan or a more expensive house.
- Flexibility. Lower monthly payments can free up some of your monthly budget for other goals, like saving for emergencies, retirement, college tuition or home repairs and maintenance.
15-year mortgage rate moves up, +0.01%
The average rate for the benchmark 15-year fixed mortgage is 6.50 percent, up 1 basis point over the last week.
Monthly payments on a 15-year fixed mortgage at that rate will cost approximately $871 per $100,000 borrowed. The bigger payment may be a little harder to find room for in your monthly budget than a 30-year mortgage payment, but it comes with some big advantages: You’ll save thousands of dollars over the life of the loan in total interest paid and build equity much faster.
5/1 ARM rate retreats, -0.26%
The average rate on a 5/1 ARM is 6.12 percent, down 26 basis points over the last week.
Adjustable-rate mortgages, or ARMs, are mortgage loans that come with a floating interest rate. In other words, the interest rate will change at regular intervals, unlike fixed-rate mortgages. These types of loans are best for people who expect to refinance or sell before the first or second adjustment. Rates could be materially 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 6.12 percent would cost about $607 for each $100,000 borrowed over the initial five years, but could increase by hundreds of dollars afterward, depending on the loan’s terms.
Jumbo mortgage interest rate moves down, -0.05%
The average jumbo mortgage rate today is 7.02 percent, down 5 basis points from a week ago. A month ago, the average rate was above that, at 7.05 percent.
At the average rate today for a jumbo loan, you’ll pay a combined $666.65 per month in principal and interest for every $100,000 you borrow. That represents a decline of $3.36 over what it would have been last week.
Refinance rates
30-year fixed-rate refinance declines, -0.03%
The average 30-year fixed-refinance rate is 7.19 percent, down 3 basis points over the last seven days. A month ago, the average rate on a 30-year fixed refinance was lower, at 7.14 percent.
At the current average rate, you’ll pay $678.11 per month in principal and interest for every $100,000 you borrow. That’s a decline of $2.03 from last week.
Where are mortgage rates heading?
The Federal Reserve has signaled that it intends to cut rates in 2024, depending on inflation and employment data and other factors. The Fed meets again on Jan. 31.
Current average 30-year mortgage rates are slightly below 7 percent as of mid-January. As the year progresses, expect rates to slowly trend downward, 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. The specific rate you’d qualify for is tied to your credit score, loan type and other variables.
What current rates mean for your mortgage
While mortgage rates change daily, it’s unlikely we’ll see rates back at 3 percent any time soon. 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.
You could save serious money on interest 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