Mortgage Rates Today, Jan 13: 30-Year Refinance Rate Drops by 8 Basis Points

Today, the average rate for a 30-year fixed refinance has dipped by a noticeable 8 basis points, settling at 6.43%, according to Zillow. This downward tick, while seemingly small, can translate into significant savings for many looking to adjust their home loans. This recent drop, especially the 8-basis-point decrease in the 30-year fixed refinance rate, is a breath of fresh air. It signals a potential shift, and for those who’ve been waiting on the sidelines, it might just be the nudge they need.

Mortgage Rates Today, Jan 13: 30-Year Refinance Rate Drops by 8 Basis Points

What's Driving This Rate Drop?

You might be wondering what caused this change. It's not just random chance; there are real economic forces at play.

One major factor came directly from President Trump's directive on January 12, 2026, where the federal government committed to purchasing $200 billion in mortgage bonds. This is a significant move. When the government buys more mortgage bonds, it increases demand for them. Think of it like this: more demand for something usually means its “price” (in this case, the interest rate) goes down. This action is a clear indication of an effort to stimulate the housing market and, as we're seeing, it's having an immediate impact.

This injection into the bond market led to benchmark 30-year fixed rates falling below 6% for the first time since September 2022. That's a pretty big deal and a psychological milestone for both buyers and refinancers.

The Impact on Refinance Applications

With rates declining, the effect on refinance activity has been nothing short of dramatic. Zillow’s data points to a surge in refinance applications, up over 108% compared to early 2025. This isn't surprising at all. If you secured a mortgage when rates were higher, say 7% or 8%, and you now have the opportunity to refinance into a lower rate like the current 6.43%, it’s a no-brainer. This allows homeowners to potentially lower their monthly payments, reduce the total interest paid over the life of the loan, or even tap into some home equity if needed. I always advise my clients to run the numbers; even a small drop can add up over 30 years.

A Look at Other Refinance Rates

While the 30-year fixed refinance rate is grabbing headlines with its drop, it’s also important to see what’s happening with other loan types.

• The 15-year fixed refinance rate has seen a slight increase, up 4 basis points from 5.43% to 5.47%. This shorter-term loan is still a very attractive option for those who can manage a higher monthly payment and want to pay off their mortgage faster and save on interest.
• The 5-year Adjustable-Rate Mortgage (ARM) refinance rate has experienced a more significant jump, up 7 basis points from 7.21% to 7.28%. ARMs can be appealing with their lower initial rates, but as this increase shows, they come with the risk of future rate hikes.

Here’s a quick snapshot of how things stand today:

What Does This 8 Basis Point Drop Mean for You?

An 8-basis-point drop might sound like pocket change, but let’s break down what it could mean in real dollars for someone looking to refinance. For every $100,000 borrowed, a decrease of 0.08% on a 30-year fixed mortgage can save you approximately $6-$7 per month. Over the course of a typical loan, this can add up to thousands of dollars in savings.

For example, if you have a $300,000 mortgage:

• At 6.51% (last week's average), your principal and interest payment would be around $1,680.
• At 6.43% (today's average), your principal and interest payment would be around $1,659.

That’s a saving of $21 per month, which adds up to an impressive $7,560 over 30 years! It’s why I always encourage people to seriously consider refinancing when rates move favorably, even by seemingly small increments.

30-Year Fixed vs. 15-Year Fixed: Which to Choose?

With the 30-year fixed rate dipping and the 15-year fixed rate nudging up slightly, the decision between the two becomes even more relevant.

• 30-Year Fixed Mortgage:
  • Pros: Lower monthly payments, providing more financial flexibility each month. This is ideal if you need to free up cash flow or are managing a tighter budget.
  • Cons: You'll pay more interest over the life of the loan because you're borrowing for a longer period.
• 15-Year Fixed Mortgage:
  • Pros: Lower overall interest paid, and you'll own your home outright much faster. The interest rates are typically lower than those for 30-year loans, and we're seeing that hold true.
  • Cons: Higher monthly payments, which might not be feasible for everyone.

Your choice really depends on your current financial situation, your long-term goals, and your comfort level with monthly payments versus total interest paid.

Major Market Drivers and the Federal Reserve

Beyond the President’s directive, other factors are influencing mortgage rates. The Federal Reserve Funds rate is currently in the 3.75% to 4.00% range. This is a result of three consecutive cuts made late last year. The Fed’s actions are a key indicator of the broader economic climate. When the Fed lowers its target rate, it generally signals a move towards easier monetary policy, which can encourage borrowing and stimulate the economy. Mortgage rates often, though not always directly, follow the direction indicated by the Fed.

Looking Ahead: What's in Store for 2026?

While today’s news is certainly positive for homeowners and potential buyers, the crystal ball for the rest of 2026 isn't entirely clear. Industry experts have varying opinions:

• Stability Expected: Organizations like the Mortgage Bankers Association (MBA) and Fannie Mae are generally forecasting that 30-year fixed rates will likely hover around the 6.0% to 6.4% range for much of the year. This suggests that the recent drops might stabilize, offering a relatively predictable borrowing environment.
• Potential for Further Dips: However, some analysts believe rates could eventually fall further, potentially reaching 5.5%, especially if the economy heads into a recession. Conversely, persistent inflation, even at a projected 2.7%, remains a significant factor that could put upward pressure on rates, preventing them from dropping too low.

My own take is that while we might see some fluctuations, the overall trend seems to be heading towards a more stable, and hopefully lower, rate environment than we've experienced in the recent past. The key will be watching inflation data and any future moves by the Federal Reserve.

For now, if you’re considering refinancing or buying, today’s dip in mortgage rates is a compelling reason to explore your options. It’s always wise to get personalized quotes and discuss your situation with a trusted mortgage professional to make the best decision for your financial future.