Mortgage Rates Today, January 1: Refinance Rate Drops Offering a Modest Reprieve

As we ring in 2026, there’s a subtle shift in the mortgage market that’s worth paying attention to: the national average 30-year fixed refinance rate has dipped by 3 basis points, landing at 6.61%, according to Zillow. While this might not sound like a huge change, it’s a welcome bit of news in a housing market that’s been on a bit of a rollercoaster.

This particular decrease is coming after a bit of a jump just the day before, which shows just how much things can sway back and forth right now. It’s not a huge plunge, but it’s a pause, a breath of fresh air after a period of rising costs.

Mortgage Rates Today, January 1: Refinance Rate Drops Offering a Modest Reprieve

What the Numbers Tell Us

Let’s break down what’s really happening with these numbers. It’s not all good news, though. While the 30-year fixed refinance rate has inched down to 6.61%, other types of loans are telling a different story.

• 15-year fixed refinance rates have actually climbed significantly by 23 basis points, going from 5.40% to 5.63%. This means if you were hoping to lock in a shorter-term, faster payoff loan, the cost just went up.
• The 5-year adjustable-rate mortgage (ARM) has also seen an increase, jumping 19 basis points from 7.12% to 7.31%. This signals that shorter-term flexibility, which often comes with a lower initial rate, is becoming more expensive.

So, what we're seeing is a bit of a mixed bag. The long-term fixed rate is showing a tiny bit of kindness, but the shorter-term options are becoming pricier.

Loan Type	Previous Rate	Current Rate	Change (Basis Points)	Trend / Impact
30‑Year Fixed Refinance	6.62%	6.61%	–1 bp	Slight relief for long‑term borrowers
15‑Year Fixed Refinance	5.40%	5.63%	+23 bps	Shorter‑term payoff loans now more expensive
5‑Year ARM (Adjustable)	7.12%	7.31%	+19 bps	Flexibility costs more; higher initial rates

Why the Mixed Signals? My Take.

It’s New Year's Day, and many financial markets were closed. When there’s not a lot of new information coming out and fewer people trading, rates can sometimes move based on technical things or just because people are taking profits after a recent climb. This slight drop in the 30-year rate could be one of those “quiet day” moves.

But honestly, I don’t think this is the big turning point everyone is waiting for just yet. The overall picture is still one of higher borrowing costs. We're talking about rates in the mid-6% range, which is still more than double what we saw back in 2020 and 2021 when rates were incredibly low. The Federal Reserve is still being cautious about inflation, and they’ve made it pretty clear they want to keep rates higher for longer to make sure prices stay stable. So, this 3-basis-point drop is more of a sigh of relief than a full-blown celebration.

What This Means for You

If you’re thinking about refinancing, timing is always key. But so is having the right expectations.

• For those considering a 30-year refinance: That 3-basis-point drop isn’t quite enough on its own to make you rush to refinance. However, if your current rate is already high (say, above 7%), this small easing, especially if rates continue to drop a bit more, could make early 2026 a smart time to act. It's all about whether you can see a real financial benefit.
• For 15-year borrowers: That big jump in the 15-year rate shows just how quickly investor feelings and Treasury yields can move shorter-term loans. If your goal is to pay off your mortgage faster and you can comfortably manage higher monthly payments, locking in now might still be a good idea if your current rate is much higher than this new 5.63%.
• If you have an ARM: The climb in the 5-year ARM rate to 7.31% is a good reminder of the risks that come with adjustable rates when things are unpredictable. ARMs can look good at first with lower payments, but they’re now built on a lot more uncertainty. If your ARM is due to reset soon, it’s really important to seriously think about whether converting to a fixed rate loan makes more sense.

The Bigger Picture: Housing Costs and What’s Being Done

Even a tiny change in mortgage rates can have a massive impact on how affordable it is to buy a home. At 6.61%, that monthly payment on a $400,000 loan is around $2,550. That’s about $700 more each month compared to what it would have been at 3% back in 2021. This is still making it tough for many people to buy homes, especially first-time buyers, and it’s helping to keep rent prices high.

Policymakers are aware of this. We’re seeing more talk about programs that can help lower the effective interest rate for borrowers, more help with down payments, and even changes to how government-sponsored enterprises like Fannie Mae and Freddie Mac operate. These won’t directly lower the headline mortgage rates, but they could make buying a home more achievable for people who qualify.

What to Watch for Next

As we move further into 2026, the mortgage market will likely keep being influenced by a few big things:

1. Inflation: How prices are changing, especially for things like housing.
2. The Federal Reserve: What they decide to do with interest rates.
3. Treasury Yields: These are closely tied to mortgage-backed securities and have a big impact on mortgage rates.

That small dip in the 30-year refinance rate today is a nice symbolic way to start the year, but it’s not a trend yet. My advice? Keep an eye on the weekly rate changes. Pay attention to important economic reports like the jobs report and the Consumer Price Index (CPI) data that will come out later this month. And, most importantly, talk to lenders to see if refinancing makes sense for your specific financial situation and goals, not just because rates moved a little.

In a market that’s still playing it safe, even small shifts are news. But for most of us, patience and good planning are still the smarter play than trying to perfectly time the market.