Current Mortgage Rates: A Great Time to Shop for a Home Loan
The current mortgage rates are significantly lower compared to last year, making it an excellent time to shop for a home loan. With the average 30-year fixed mortgage rate dropping 98 basis points to 6.06%, you can lock in a favorable rate and save on your monthly payments.
Understanding the Current Mortgage Rates
According to the latest data from Zillow, the current mortgage rates are as follows:
– 30-year fixed: 5.86%
– 20-year fixed: 5.82%
– 15-year fixed: 5.33%
– 5/1 ARM: 6.11%
– 7/1 ARM: 6.14%
– 30-year VA: 5.46%
– 15-year VA: 5.09%
– 5/1 VA: 5.16%
These rates are national averages, rounded to the nearest hundredth, and may vary depending on your location and other factors.
Mortgage Refinance Rates: What You Need to Know
If you’re considering refinancing your mortgage, it’s essential to understand the current refinance rates. According to Zillow, the current mortgage refinance rates are:
– 30-year fixed: 6.05%
– 20-year fixed: 5.92%
– 15-year fixed: 5.47%
– 5/1 ARM: 6.39%
– 7/1 ARM: 6.29%
– 30-year VA: 5.41%
– 15-year VA: 5.08%
– 5/1 VA: 5.12%
– 30-year FHA: 5.83%
Keep in mind that refinance rates are often higher than rates for new home purchases, although this is not always the case.
Using a Mortgage Calculator to Plan Your Finances
To determine how much your monthly payment will be, you can use a mortgage calculator. This tool allows you to input your mortgage amount, rate, and term length to see how they impact your monthly payments. You can bookmark the Yahoo Finance mortgage payment calculator and use it as you shop for homes and lenders.
Choosing the Right Mortgage Rate: Fixed or Adjustable
When selecting a mortgage rate, you have two options: fixed or adjustable. A fixed-rate mortgage locks in your rate for the entire life of your loan, while an adjustable-rate mortgage locks in your rate for a predetermined period and then adjusts it periodically.
Fixed-Rate Mortgages: Pros and Cons
A 30-year fixed-rate mortgage is a good choice if you want a lower monthly payment and the predictability that comes with having a fixed rate. However, your rate will be higher than if you choose a shorter term, and you will pay significantly more in interest over the years. On the other hand, a 15-year fixed-rate mortgage allows you to pay off your home loan quickly and save money on interest, but you’ll need to ensure you can afford the higher monthly payments.
Adjustable-Rate Mortgages: Pros and Cons
An adjustable-rate mortgage could be a good option if you plan to sell your home before the introductory rate period ends. Adjustable rates usually start lower than fixed rates, but your rate will change after a predetermined amount of time. However, 5/1 and 7/1 ARM rates have been similar to or even higher than 30-year fixed rates recently, so it’s essential to compare your rate options from term to term and lender to lender.
Future Outlook for Mortgage Rates
Mortgage rates have generally fallen since the end of May and are still lower than the same time last year. Economists don’t expect drastic mortgage rate declines through the end of 2026. According to Freddie Mac, the national average 30-year mortgage rate decreased by 10 basis points to 6.06%, while the average 15-year mortgage rate fell by eight basis points to 5.38%.
Expert Predictions for 2026 and 2027
The Mortgage Bankers Association (MBA) expects the 30-year mortgage rate to be near 6.4% through 2026, while Fannie Mae predicts a 30-year rate above 6% through next year, dipping down to 5.9% in Q4 2026. For 2027, the MBA forecast 30-year fixed rates of 6.3% for most of the year, before stepping up to an average of 6.4% in Q4. Fannie Mae predicts average rates near 5.9% for the full year of 2027.
