Mortgage and refinance rates today, October 17, 2024: Short-term increases, long-term decreases

Mortgage rates have skyrocketed this week. According to Freddie Mac, the 30-year fixed mortgage rate rose 12 basis points 6.44%and the 15-year fixed rate is up 22 basis points 5.63%. This results in three consecutive weekly increases for 30-year rates and four consecutive weeks for 15-year rates.

Believe it or not, there’s good news: Both 30-year and 15-year fixed rates are over 1% lower than they were this time last year. Yes, it can be frustrating when mortgage rates rise – but if you’re looking to buy a home, you’re still in a much better position than you were a year ago.

Dig Deeper: Mortgage rates rise for the third week in a row as buyers become more cautious

Current mortgage rates

Here are the current mortgage rates according to the latest Zillow data:

• 30 years fixed: 6.13%

• 20 years fixed: 5.97%

• 15 years fixed: 5.47%

• 5/1 ARM: 6.72%

• 7/1 ARM: 6.62%

• 30 year old VA: 5.54%

• 15 year old VA: 5.02%

• 5/1 VA: 5.73%

• 5/1 FTA: 4.87%

Remember, these are national averages rounded to the nearest hundredth.

Learn more: 5 Strategies to Get the Lowest Mortgage Rates

Today’s Mortgage Refinance Rates

Here are today’s mortgage refinance rates, according to the latest Zillow data:

• 30 years fixed: 6.28%

• 20 years fixed: 6.12%

• 15 years fixed: 5.60%

• 5/1 ARM: 6.54%

• 7/1 ARM: 6.57%

• 30 year old VA: 5.61%

• 15 year old VA: 5.26%

• 5/1VA: 5.26%

• 30-year FHA: 5.48%

• 5/1 FTA: 4.94%

As with purchase mortgage rates, these are national averages that we have rounded to the nearest hundredth. Keep in mind that refinance rates are typically higher than purchase mortgage rates.

Monthly Mortgage Payment Calculator

Yahoo Finance has a free mortgage payment calculator to help you determine how different mortgage rates affect your monthly payments.

Our calculator goes even deeper by incorporating factors like home insurance and property taxes into your calculation. You can even add private mortgage insurance costs and HOA dues if they apply to you. These monthly expenses, along with your mortgage principal and interest rate, give you a realistic idea of ​​what your monthly payment might be.

How do mortgage interest rates work?

A mortgage interest rate is a fee for borrowing money from your lender, expressed as a percentage. There are two basic types of mortgage rates: fixed and variable rates.

With a fixed-rate mortgage, your interest rate is fixed for the entire term of your loan. For example, if you take out a 30-year mortgage with an interest rate of 6%, your interest rate will remain at 6% for the entire 30 years. (Unless you refinance or sell the home.)

With an adjustable rate mortgage, your interest rate stays the same for the first few years and then changes periodically. Let’s say you get a 5/1 ARM with an introductory rate of 6%. Your rate would be 6% for the first five years and then the rate would increase or decrease once per year for the last 25 years of your term. Whether your interest rate goes up or down depends on several factors, such as the economy and the U.S. housing market.

At the beginning of your mortgage term, the majority of your monthly payment goes toward interest. Over time, less of your payment goes toward interest and more toward the mortgage principal, or the amount originally borrowed.

Dig Deeper: Variable or fixed rate mortgage – which should you choose?

How are mortgage interest rates determined?

Two categories determine mortgage rates: those you can control and those you cannot control.

What factors can you control? First, you can compare the best mortgage lenders to find the one that offers you the lowest interest rate and fees.

Second, lenders typically offer lower interest rates to people with higher credit scores, lower debt-to-income ratios (DTI), and significant down payments. If you can save more or pay off debt before taking out a mortgage, a lender is likely to offer you a better interest rate.

What factors can you not control? In short, the economy.

The list of how the economy affects mortgage rates is long, but here are the basic details. When the economy is in trouble – for example, the employment rate – mortgage rates are lowered to encourage borrowing, which helps stimulate the economy. When the economy is strong, mortgage rates rise to curb spending.

All other things being equal, mortgage refinancing rates are generally slightly higher than purchase rates. So don’t be surprised if your refinance rate is higher than you might have expected.

30-year vs. 15-year fixed mortgage rates

Two of the most common mortgage terms are 30-year and 15-year fixed-rate mortgages. Both fix your interest rate for the entire loan term.

A 30-year mortgage is popular because the monthly payments are relatively low. However, the interest rate is higher than shorter terms, and because you’re accumulating interest over three decades, you’ll pay high interest in the long run.

A 15-year mortgage can be great because it has a lower interest rate than longer terms, meaning you’ll pay less interest over the years. Plus, you’ll pay off your mortgage much faster. However, your monthly payments will be higher because you’ll be paying off the same loan amount in half the time.

Generally, 30-year mortgages are cheaper month-to-month, while 15-year mortgages are cheaper in the long run.

Current Mortgage Rates: FAQs

Which bank offers the lowest mortgage rates?

According to 2023 Home Mortgage Disclosure Act (HMDA) data, Citibank, Wells Fargo and USAA are some of the banks with the lowest median mortgage rates. However, it’s a good idea to shop around for the best interest rate not only at banks, but also at credit unions and companies that specialize in mortgage loans.

Is 2.75% a good mortgage rate?

Yes, 2.75% is a fantastic mortgage rate. It’s unlikely you’ll get a 2.75% interest rate in today’s market unless you take on a forgable mortgage from a seller who locked in that rate in 2020 or 2021, when interest rates are at historic lows were.

What is the lowest mortgage rate ever?

According to Freddie Mac, the lowest 30-year fixed mortgage rate ever was 2.65%. This was the national average in January 2021.

At what interest rate should you refinance your mortgage?

Some experts say refinancing is worth it if you can lock in an interest rate that’s 2% lower than your current mortgage rate. Others say 1% is the magic number. It all depends on what your financial goals are when refinancing and when your break-even point would be reached after paying the refinance closing costs.