Mortgage Rates Today, January 7: Refinance Rates Go Higher Rising by 14 Basis Points

The national average for a 30-year fixed refinance rate has ticked up to 6.70% as of today, January 7, 2026, according to Zillow. This slight increase signals a need for homeowners considering a refinance to pay close attention to current market movements.

As we kick off 2026, it’s clear the market is still a bit of a rollercoaster. Today’s news from Zillow shows the 30-year fixed refinance rate has climbed to 6.70%, a 14 basis point jump from Tuesday’s 6.56%. That might not sound like a huge leap, but for those looking to refinance, it means their monthly payments could be a little higher than they were just yesterday. This is up 8 basis points from last week’s average of 6.62%, confirming a modest upward creep for those seeking longer-term stability.

My own experience working with homeowners over the years tells me that even small shifts like this can influence decisions. People are often waiting for that “perfect moment” to refinance, and seeing a rate move in the wrong direction can cause hesitation.

Mortgage Rates Today, January 7: 30‑Year Refinance Rate Rises by 14 Basis Points

Refinance Rates Edge Higher, With Mixed Movements Across Loan Types

While the headline for the 30-year fixed rate isn't the most encouraging, it's not all bad news if you look closer. Shorter-term loans are actually showing a bit of improvement. The 15-year fixed refinance rate has dipped by 5 basis points, going from 5.59% down to 5.54%. This is a welcome bit of good news for those who prefer to pay off their mortgages faster. Meanwhile, the 5-year adjustable-rate mortgage (ARM) refinance rate has stayed steady at 6.99%. This tells me that while fixed rates are seeing some fluctuation, ARMs are not offering much in the way of immediate savings, even if they might be attractive to some for their initial lower payments.

Current Refinance Rates Snapshot

To help you get a clearer picture, here’s a quick summary of how today's rates compare:

What This Means for Borrowers

So, what’s the takeaway from these numbers?

• For Long-Term Borrowers: That rise to 6.70% for a 30-year fixed refinance definitely makes it more expensive to lower your monthly payment over a long period. However, it's crucial to remember that these are national averages. There's always a chance you can find a lender offering slightly better terms, so shopping around is more important than ever.
• For Short-Term Borrowers: The dip in the 15-year fixed rate is a nice little window of opportunity. If you're looking to pay off your mortgage quicker and can comfortably manage slightly higher monthly payments, now might be a good time to explore this option. The savings over the life of a 15-year loan are often substantial.
• For ARM Borrowers: The stability in 5-year ARMs at 6.99% doesn't offer much incentive for refinancing unless you have a specific reason. While ARMs can be appealing for their potentially lower initial payments, at these levels, the security of a fixed rate often outweighs the variable risk, especially if your goal is to refinance to save money.

Market Trends and News Shaping Today's Rates

Understanding why rates are moving the way they are is key. We've seen some significant shifts recently. Remember those lower rates we saw at the end of 2025? Those came after the Federal Reserve made its third consecutive quarterly rate cut in December 2025. That was a moment of optimism for many.

However, mortgage rates don't always move in lockstep with the Fed's benchmark rate. They are more closely tied to the 10-year Treasury yield. Experts are predicting this yield will hover around 4% for much of 2026. Why? Well, inflation is still a concern, and that persistent inflation keeps upward pressure on longer-term bond yields, which in turn pushes up mortgage rates.

This has, understandably, led to a surge in refinance activity. The Mortgage Bankers Association reports a big jump in refinance applications compared to last year. Many homeowners who locked in rates above 7% in 2023 and 2024 are actively seeking ways to lower those payments. But there's an interesting trend emerging: because so many people refinanced at very low rates (below 5%) during the pandemic, we're also seeing a rise in people opting for Home Equity Lines of Credit (HELOCs) or home equity loans instead of a full cash-out refinance. They might want to tap into their home's value without jeopardizing their incredibly low existing mortgage rate. It's a smart move for them.

Looking Ahead: The 2026 Forecast

When I talk to clients, there’s always the question: “When will rates go back down to 3% or 4%?” Based on current expert opinions and forecasts, it's highly unlikely we'll see those pandemic-era rates again in 2026.

• Mortgage Bankers Association (MBA) Forecast: They anticipate 30-year mortgage rates will likely stay relatively stable, hovering around 6.4% throughout 2026. This suggests a period of consolidation rather than sharp declines.
• Fannie Mae Forecast: They offer a slightly more optimistic view, suggesting rates could dip to around 5.9% by the fourth quarter of 2026. This is still a significant improvement from today's 6.70%, but it’s a gradual decrease.
• Federal Reserve's Stance: The Fed has signaled that they may only implement one more rate cut in 2026. This cautious approach suggests that interest rates will likely remain in a similar range unless there's a major disruption in the economy.

Essentially, the consensus is that we’re in a higher-rate environment for the foreseeable future, and homeowners should prepare for that reality.

How to Secure the Best Refinance Rate in 2026

Given the current market, being strategic is your best bet. Experts agree that getting the best rate requires a two-pronged approach: improving your financial health and becoming a savvy shopper. On average, homeowners can save about $6,000 over the life of their loan just by getting at least five rate quotes.

Financial Preparation for a Better Rate

Before you even start talking to lenders, focus on these areas:

• Boost Your Credit Score: This is probably the single most impactful factor. Lenders reserve their absolute best rates for borrowers with credit scores of 740 or higher. Even moving up from a “good” score to a “very good” one can shave a noticeable amount off your interest rate.
• Lower Your Debt-to-Income (DTI) Ratio: This ratio compares your monthly debt payments to your gross monthly income. Lenders strongly prefer a DTI of 25% or less for the best rates. While many will approve loans with a DTI under 36%, your goal for top-tier rates should be lower.
• Build Home Equity: Ideally, you want at least 20% equity in your home. This not only helps you avoid Private Mortgage Insurance (PMI) on conventional loans but also qualifies you for the absolute lowest rates. If your home's value has appreciated since you bought it, that “organic” equity can be a huge advantage.

Smart Comparison Shopping Strategies

Once your finances are in order, it's time to shop:

• Shop on the Same Day: Mortgage rates are incredibly volatile and can change by the hour, let alone by the day. To get an accurate “apples-to-apples” comparison, try to get your official Loan Estimates from all the lenders you're considering on the same day. This ensures you're comparing offers based on the same market conditions for the exact same loan scenario.
• Compare the APR, Not Just the Rate: This is a crucial point I always emphasize. The interest rate is just one part of the cost. The Annual Percentage Rate (APR) includes the interest rate plus all the lender fees (like origination fees, appraisal fees, etc.). The APR gives you a much clearer picture of the total cost of the loan.
• Consider Shorter Terms: As we’ve seen today, 15-year fixed-rate mortgages are currently offering significantly lower rates than 30-year loans. If your budget allows for the higher monthly payments, the interest savings over time can be massive.

Negotiation and Advanced Tactics

Don't be afraid to negotiate or use some advanced strategies:

• Buy Discount Points: This is where you pay extra upfront at closing to permanently lower your interest rate for the life of the loan. It’s most effective if you plan to stay in your home for a long time. You'll want to calculate the “break-even point” – the number of months it takes for your monthly savings to recoup the cost of the points.
• Negotiate Lender Fees: Many fees charged by lenders are negotiable. Don't hesitate to ask for a waiver or reduction on things like application or processing fees. You can also use a Loan Estimate from one lender as leverage to ask another lender to match their rate or fees. It's a competitive market out there!
• Lock Your Rate: Once you find an offer you're happy with, consider locking in your interest rate. Most locks last for 30 to 90 days. This protects you from any potential rate increases while your loan is being processed.
• Check with Your Current Lender: Sometimes, your existing mortgage servicer might offer “streamlined” refinance options that require less paperwork or have lower fees. They want to keep your business, so it’s always worth a quick call to see what they can offer.

Outlook for Early 2026

The refinance market right now is presenting a bit of a mixed bag.

• The upward trend in long-term rates means that refinancing into a 30-year loan will cost a bit more each month.
• On a brighter note, shorter-term fixed loans are showing slight decreases, offering a bit of breathing room for those who prefer to pay off their debt faster.
• ARMs are holding steady but at a level that makes them less appealing than stable fixed-rate options, highlighting the inherent risks tied to variable borrowing.

Ultimately, the direction of mortgage rates will continue to be influenced by big economic forces like Federal Reserve policy, ongoing inflation trends, and the general demand for housing in the market. For now, homeowners need to carefully weigh whether the stability of a fixed rate is worth the current cost, or if exploring shorter-term options makes more sense for their financial future.