Mortgage Rates Today, Jan 11: 30-Year Refinance Rate Drops by 5 Basis Points

Here's an update for anyone considering a home loan refinance! As of today, January 11th, the national average for a 30-year fixed refinance rate has dipped by 5 basis points, now sitting at 6.57%. This small shift, while seemingly minor, can have a noticeable impact on your monthly payments and overall savings over the life of your loan.

Mortgage Rates Today, Jan 11: 30-Year Refinance Rate Drops by 5 Basis Points

Key Takeaway:

• Today's Rates: On January 11th, the national average 30-year fixed refinance rate is 6.57%, a 5 basis point decrease.
• Policy Impact: A recent government policy of purchasing mortgage bonds has significantly influenced rates, causing a sharp drop earlier in the week.
• Refinance Activity is High: The market is seeing a substantial increase in refinance applications, driven by declining rates.
• Mixed Signals: While 30-year fixed refinance rates are down slightly, 15-year fixed rates have moved up.
• 2026 Outlook: Experts predict rates will likely remain above 6% for most of 2026, with forecasts ranging from 5.9% to 6.4% by year-end.
• Refinance Readiness: To qualify for a refinance, focus on maintaining a strong credit score, adequate home equity, a manageable DTI, and stable income.

What Does a 5 Basis Point Drop Really Mean for You?

Let's break down what a 5 basis point (bps) drop actually translates to in your wallet. A basis point is simply 0.01% of a percentage. So, a 5 bps drop means the rate went down by 0.05%.

Consider this: If you were looking to refinance a mortgage of, say, $300,000, this 0.05% difference can save you money. While the exact savings depend on the remaining term of your loan and how many years you have left, over a 30-year term, this small reduction can add up to a significant amount. For many homeowners, this could mean saving a few dollars each month, which, when compounded over time, becomes quite substantial. It's not a life-changing drop, but it's a positive move in the right direction, and when rates are hovering around these levels, every little bit counts.

Today's Mortgage Rate Snapshot (January 11, 2026):

Here’s a quick look at the national averages, according to Zillow:

It's interesting to see that while the 30-year fixed refinance rate is inching down, the 15-year fixed rate has actually moved up. This suggests that borrowers looking for shorter terms might be facing slightly less favorable conditions today, while those opting for the longer, more traditional 30-year route are seeing a modest benefit. The ARM rate also saw a slight dip, but ARMs can be trickier for long-term planning due to their varying interest rates.

Market News & Key Trends: Why Are Rates Moving?

The mortgage rate market isn't a vacuum; it's influenced by a complex interplay of economic signals, government policies, and investor sentiment. Let's explore some of the key drivers behind the current rate movements:

• The “Trump Policy Effect”: A significant event that has shaped the recent rate landscape was President Trump's executive order on January 9, 2026. His directive to purchase $200 billion in mortgage bonds was a bold move aimed at directly reducing housing costs. The immediate impact was palpable, causing the 30-year fixed average to plunge from 6.21% to an impressive 5.99% in a single day. This policy intervention injected a considerable amount of liquidity and confidence into the mortgage market, pushing rates down sharply. It’s a clear example of how government action can directly influence borrowing costs.
• Refinance Surge: This policy-driven rate decrease has clearly energized homeowners. The Mortgage Bankers Association (MBA) has reported that the Refinance Index has surged by a remarkable 108% compared to this time last year. This indicates a significant uptick in homeowners looking to capitalize on lower rates, especially those who may have secured their current mortgages at higher rates in previous years. It's a classic case of supply and demand: as rates fall, more people refinance.
• The Federal Reserve's Balancing Act: While the Federal Reserve did make three rate cuts in 2025, including one in December, it's crucial to understand that mortgage rates don't always mirror the Fed's actions perfectly. Mortgage rates are more closely tied to the bond market, particularly long-term Treasury yields. Factors like inflation expectations and the overall demand for these bonds play a much larger role. The Fed's actions set a tone, but the actual cost of borrowing for a mortgage is determined by a different set of forces.
• Economic Indicators Showing a Slowdown: The labor market, a key indicator of economic health, has been showing signs of cooling. With unemployment recently rising to 4.6% in November 2025, this provides further downward pressure on interest rates. A softer labor market often signals to investors that the economy might be slowing, which can lead to lower inflation expectations and, consequently, lower bond yields and mortgage rates.

Looking Ahead: 2026 Mortgage Rate Forecast

This is where things get interesting, and frankly, a bit uncertain. Predicting mortgage rates is never an exact science, but experts offer some insights:

• Fannie Mae's Crystal Ball: Fannie Mae, a major player in the housing finance system, forecasts that the 30-year fixed rate will likely stabilize around 5.9% by the end of 2026. This suggests a continued period of relatively stable, albeit not historically low, rates.
• MBA's More Cautious Outlook: The Mortgage Bankers Association (MBA) takes a more conservative stance, projecting rates to remain near 6.4% through the course of 2026. This difference in forecasts highlights the inherent uncertainty in economic predictions.
• Expert Consensus: The general agreement among many experts is that we can expect rates to remain above 6% for much of the year. The caveat to this is a significant economic shock or a pronounced recession, which could potentially drive rates lower, but no one is hoping for that!

My own take, based on years of watching these trends, is that while the policy-driven drop we saw earlier in January was significant, sustained sub-6% rates will depend heavily on inflation continuing its downward trajectory and the Fed signaling further rate cuts. We're in a period of adjustment, and while today's 5 bps drop is welcome, it's more of a ripple than a tidal wave.

Are You Considering a Refinance? Here’s What You Need:

Before you jump into a refinance, it's essential to understand the general requirements to ensure you likely qualify for a good rate. Lenders look for a few key things to be comfortable lending you money:

General Requirements for Refinancing:

• Credit Score: This is often the most critical factor. Most lenders want to see a minimum credit score of 620 for a conventional refinance. However, to get the best interest rates, you'll generally need a score of 740 or higher. Government-backed loans like FHA and VA sometimes have more lenient credit score requirements.
• Home Equity/LTV: Lenders want to see you have a stake in your home. For a conventional refinance, having at least 20% equity (meaning your loan is for 80% or less of your home's value, an 80% LTV) is usually required to avoid paying Private Mortgage Insurance (PMI). Some government loans offer more flexibility.
• Debt-to-Income (DTI) Ratio: This is your total monthly debt payments divided by your gross monthly income. Lenders typically prefer this to be 43% or less. However, some might go up to 50% or even higher if you have other strong compensating factors, like an excellent credit score or substantial cash savings.
• Payment History: A consistent history of making your mortgage payments on time is crucial. Most lenders will want to see no missed payments in the last 6 to 12 months.
• Stable Income/Employment: Lenders need to be confident you can continue to make your payments. They'll usually ask for proof of a reliable and stable income, typically verifying employment and income for the past two years.

The mortgage market is always in motion, and while today’s small drop is a positive sign for potential refinancers, it’s wise to stay informed and grounded in your financial planning.