Today’s Mortgage Rates Are at 6.42% on December 15, 2024

It's no secret that the housing market is a hot topic right now, and today's mortgage rates are a big part of that conversation. As of December 15, 2024, the average 30-year fixed mortgage rate has climbed to 6.42%, according to data from Zillow. This slight increase might have you wondering what it means for you, whether you're a first-time homebuyer, looking to refinance, or just keeping an eye on the market. Let's break down what's happening with mortgage rates today.

Today's Mortgage Rates Are at 6.42% on December 15, 2024

Key Takeaways:

• The average 30-year fixed mortgage rate is now 6.42%.
• The 15-year fixed mortgage rate is at 5.79%.
• Although rates have increased for two consecutive days, they are down month-over-month.
• Rates are expected to fluctuate through the end of 2024 and into 2025.
• Focusing on your personal finances is key to securing a lower rate.

Current Mortgage Rate Overview

It's a bit of a rollercoaster when you're watching mortgage rates. While today's mortgage rates show an uptick, it's important to keep the bigger picture in mind. For the past couple of days, we’ve seen a slight increase, but when we look at the month-over-month data, the rates have actually decreased. The average 30-year fixed rate has come down by 13 basis points since November, and the 15-year fixed rate has dropped by 12 basis points. This means that although the daily numbers are showing an increase, things are still comparatively better than they were just a month ago.

According to the latest data from Zillow, here’s a snapshot of today’s national average mortgage rates:

• 30-year fixed: 6.42%
• 20-year fixed: 6.20%
• 15-year fixed: 5.79%
• 5/1 ARM: 7.07%
• 7/1 ARM: 7.22%
• 30-year VA: 5.89%
• 15-year VA: 5.57%
• 5/1 VA: 6.05%

It is crucial to remember that these are national averages. The rate you get will depend on your personal circumstances and the specific lender you work with.

Refinancing Rates Today

If you're not looking to buy but are hoping to refinance your current mortgage, here's how today's rates stack up:

• 30-year fixed: 6.51%
• 20-year fixed: 6.23%
• 15-year fixed: 5.84%
• 5/1 ARM: 7.76%
• 7/1 ARM: 7.18%
• 30-year VA: 5.80%
• 15-year VA: 5.58%
• 5/1 VA: 5.24%

It's worth mentioning that refinance rates are frequently a bit higher than purchase rates, though it's not always the case. These numbers, like the purchase rates, are national averages and rounded to the nearest hundredth [Source: Zillow].

Understanding Mortgage Terms: 30-Year vs. 15-Year

When you start diving into the details of mortgages, you'll quickly encounter the terms “30-year” and “15-year” fixed mortgages. These refer to the length of time you have to repay the loan.

• 30-Year Fixed Mortgage: This is by far the most popular choice. The appeal of a 30-year mortgage is that the payments are lower because you have 360 months to pay back the loan. However, you’ll end up paying significantly more in interest over the life of the loan.
• 15-Year Fixed Mortgage: The 15-year mortgage is a different beast altogether. Yes, your payments are higher each month, but that's because you’re paying off the loan in half the time. The interest rate is also usually lower, which means you save a lot in the long run.

Let's look at an example. If you take out a $300,000 mortgage at the current 30-year rate of 6.42%, your monthly payment will be about $1,880. By the end of those 30 years, you’ll have paid around $376,961 in interest, on top of the original $300,000. On the flip side, with a 15-year mortgage at 5.79%, the monthly payment would jump to $2,498. However, you'd only pay around $149,579 in interest, which is a substantial savings. It’s a trade-off between lower monthly payments versus the total interest paid over the life of the loan. For some, it's worth it to have the freedom to pay less each month, while others are more focused on the long-term savings.

Fixed-Rate vs. Adjustable-Rate Mortgages

Another important decision is whether to go with a fixed-rate or adjustable-rate mortgage (ARM).

• Fixed-Rate Mortgage: With a fixed-rate mortgage, the rate you get at the beginning is locked in for the life of the loan. This provides predictability, and you'll know exactly what your payments will be each month. The only time your rate would change is if you choose to refinance your mortgage.
• Adjustable-Rate Mortgage (ARM): An ARM has a rate that stays the same for a specific period, then changes based on market conditions. For instance, with a 7/1 ARM, your initial rate is locked for seven years, after which it can adjust annually for the remaining 23 years of the loan. ARMs often start with lower rates than fixed-rate mortgages, but that’s not always the case. It’s also possible that your rate will go up, potentially costing you more money. It's essential to weigh the pros and cons carefully. Recently, some fixed rates have even been lower than adjustable rates, so it's always worth it to compare and assess your options with the help of a lender.

How to Potentially Get a Lower Mortgage Rate

While we can't control the market rates, there are actions you can take to potentially secure a better mortgage rate. Lenders often provide the best rates to those who have:

• Higher down payments: A larger down payment shows you have more skin in the game.
• Great or Excellent credit scores: Your credit score is a key factor in determining your rate.
• Low debt-to-income ratios (DTI): Lenders want to know you can manage your current debts along with a mortgage.

It's often better to focus on what you can control, and not just wait for the rates to drop. It is expected that rates will continue to fluctuate through the end of 2024 and into 2025. If you are ready to buy, preparing your personal finances to be as strong as possible could get you a better rate than just waiting for the market to drop.

Choosing the Right Lender

Choosing a lender is another key aspect of the home buying process. It's not just about who gives you the lowest interest rate. It's advised to get pre-approved by multiple lenders (three or four) within a short period. Doing this will allow you to accurately compare offers without impacting your credit score too much.

When you are comparing lenders, it's also important to look at the annual percentage rate or the APR. The APR incorporates interest rates, discount points, and fees, so it shows the true cost of borrowing money. APR is one of the best metrics to consider while comparing different lenders.

Frequently Asked Questions (FAQs)

Let's address some of the common questions that come up when discussing current mortgage rates:

• What is a mortgage interest rate at right now? The current national average for a 30-year mortgage is 6.42% and 5.79% for a 15-year mortgage, but these are national averages. Your local rates may vary based on a number of factors [Source: Zillow].
• What's a good mortgage rate right now? While the national average for a 30-year mortgage is 6.42%, you could potentially get a better rate by having an excellent credit score, a big down payment, and a low DTI (debt-to-income) ratio.
• Are mortgage rates expected to drop? While they may fluctuate slightly, a dramatic drop in mortgage rates is unlikely in the near future.