A mortgage rate shows you the amount of money you’ll have to pay as a fee for borrowing funds to purchase a home, and is typically expressed as a percentage of the total amount you’ve borrowed.
Written by Rene Bermudez | Edited by Crissinda Ponder | Updated December 26, 2024The current national mortgage rates forecast indicates that rates are likely to remain high compared to recent years, and stay above 6% as we head into 2025. This week, 30-year rates went up by 0.13 percentage points, while 15-year mortgage rates rose by 0.08 percentage points.
Here are the U.S. weekly average rates from Freddie Mac’s Primary Mortgage Market Survey, as of December 26, 2024:
Mortgage rates fluctuated between 6% and 7% over the last six months and, as we head into the last weeks of the year, have landed roughly where they were at this time in 2023.
The Federal Reserve announced a 25 basis point rate cut on December 18th, and indicated that we should expect fewer cuts in 2025 than we saw this year.
Read more about the most recent Fed meeting and how it affects interest rates.
Senior economist |
“As long as inflation is a major concern, expect the Fed’s impact on mortgage rates to be somewhat minimal. Fed cuts might provide some temporary decreases in day-to-day average mortgage rates, but the longer-term trend is starting to look like it will be an upward one.” |
If you’re interested in taking out a mortgage, Channel’s advice is to focus on what you can afford in the current market. Don’t wait to get the “perfect” rate. It’s impossible to time the market but, ultimately, if you take on a mortgage with affordable payments, you can succeed in any market.
Loan Product | Interest Rate | APR |
|---|---|---|
| 30-year fixed rate | 7.33% | 7.63% |
| 20-year fixed rate | 7.20% | 7.23% |
| 15-year fixed rate | 6.58% | 6.91% |
| 10-year fixed rate | 7.03% | 7.67% |
| FHA 30-year fixed rate | 6.14% | 6.81% |
| 30-year 5/1 ARM | 6.39% | 7.20% |
| VA 30-year 5/1 ARM | 6.17% | 6.48% |
| VA 30-year fixed rate | 6.21% | 6.41% |
| VA 15-year fixed rate | 5.64% | 6.07% |
Average rates disclaimer
Current average rates are calculated using all conditional loan offers presented to consumers nationwide by LendingTree’s network partners over the past seven days for each combination of loan type, loan program, and loan term. Rates and other loan terms are subject to lender approval and not guaranteed. Not all consumers may qualify. See LendingTree’s Terms of Use for more details.
When buying a home, a higher mortgage interest rate will raise your monthly principal and interest payment.
For example: Let’s say you want to buy a house for $350,000. Assuming a 30-year loan term, here’s what your monthly payment could look like at different interest rates (excluding property taxes and home insurance):
Note that if you live in an HOA community or need private mortgage insurance, your monthly payment will be higher.
Use a mortgage calculator to estimate how your interest rate will affect your monthly payment.If you are purchasing your home, there are a few ways to get a lower monthly home loan payment:
Ready to estimate how much your monthly payment could be? Calculate your mortgage payment and get custom offers below.
As you comparison shop, you have two options for how to compare mortgage rates:
If you skip the crucial step of shopping around, you miss out on the opportunity to:
Lender | User ratings | LendingTree rating | Min. credit score | |
|---|---|---|---|---|
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User Ratings & Reviews
Ratings and reviews are from real consumers who have used the lending partner’s services. | 580 to 680 | ||
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User Ratings & Reviews
Ratings and reviews are from real consumers who have used the lending partner’s services. | 500 to 620 | ||
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User Ratings & Reviews
Ratings and reviews are from real consumers who have used the lending partner’s services. | 500 | ||
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User Ratings & Reviews
Ratings and reviews are from real consumers who have used the lending partner’s services. | 620 | ||
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User Ratings & Reviews
Ratings and reviews are from real consumers who have used the lending partner’s services. | 620 | ||
 | User reviews coming soon | 580 to 620 | ||
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User Ratings & Reviews
Ratings and reviews are from real consumers who have used the lending partner’s services. | 580 to 620 |
Learn more about how we chose our list of the best mortgage lenders.The key to choosing a mortgage lender is to comparison shop. That means getting quotes from at least three to five lenders. It may sound like a hassle but it could save you tens of thousands of dollars.
Be sure to shop for those quotes on the same day, since mortgage interest rates change on a daily basis. And don’t forget to look at the annual percentage rate (APR) for each offer — this will show you the true cost of a given loan, including interest and fees.
Ready to get started? Learn how to apply for a mortgage today or enter your loan amount below.There are nine primary factors that determine your mortgage rate:
Read more about how interest rates are determined.
There are many ways you can get your lowest home loan interest rates:
Boost your credit score to 780 or higher. You’ll need to aim for a 780 credit score to qualify for the lowest conventional loan interest rates. Need help getting started? Learn how to improve your credit score.
Make a bigger down payment or borrow less. You’ll snag the best mortgage rates with a 780 credit score and at least a 25% down payment. A lower loan-to-value (LTV) ratio (how much of your home’s value you need to borrow) means lower home loan rate offers.
Reduce your total monthly debt load. Lenders measure your debt-to-income (DTI) ratio by dividing your total monthly debt by your before-tax income. A 43% maximum DTI ratio is a common limit. A debt consolidation calculator can estimate how much a debt consolidation loan could lower your monthly payments.
Consider an adjustable-rate mortgage (ARM). If you plan to move in a few years, an ARM loan starts with lower mortgage interest rates for a period of time. If you sell the home before that lower rate expires, you could save a lot of money in interest compared to a fixed-rate home loan.
Pick a shorter loan term. Lenders usually charge lower interest rates for shorter terms like 15-year loans. If you can afford a higher monthly payment, you’ll save thousands of dollars over the life of the loan, according to a LendingTree study. A mortgage calculator can estimate how much you might save.
Pay mortgage points. A mortgage point is an upfront fee equal to 1% of your total loan amount. (For example, if you borrowing $300,000, one point costs $3,000.) Paying for points buys you a lower home loan interest rate. Each point can usually lower your rate by 0.125% to 0.25%. For the exact cost of your mortgage point, you can check Page 2, Section A of your lender loan estimate.
Compare mortgage lenders. Comparing offers from several mortgage lenders saves you money — and not just a few dollars. A LendingTree study found that homebuyers in the nation’s largest metro areas saved an average of $84,301 over the life of their loans by comparing offers from different lenders.
A mortgage rate shows you the amount of money you’ll have to pay as a fee for borrowing funds to purchase a home, and is typically expressed as a percentage of the total amount you’ve borrowed.
Be careful not to confuse interest rates and APR — both are expressed as a percentage, but they’re very different. A typical interest rate accounts only for the fees you’re paying a lender for borrowing money. An APR, on the other hand, captures a broader view of the costs you’ll pay to take out a loan, including the interest rate plus closing costs and fees.
Still confused? Read our guide to better understand an APR versus interest rate.
Once you’ve selected your lender, you should ask your loan officer about the options you have to lock in a rate. Mortgage rate locks usually last between 30 and 60 days, and they exist to give you a guarantee that the rate your lender offered you will still be available when you actually close on the loan. If your loan doesn’t close before your rate lock expires, you should expect to pay a rate lock extension fee.
You need to apply for mortgage preapproval to find out how much you could qualify for. Lenders use the preapproval process to review your overall financial picture — including your assets, credit history, debt and income — and calculate how much they’d be willing to lend you for a mortgage.
Use the loan amount printed on your preapproval letter as a guide for your house-hunting journey, but avoid borrowing the maximum. Our mortgage calculator can help you determine whether your mortgage payment leaves enough room in your budget to comfortably cover your other monthly bills.
The best type of mortgage loan will depend on your financial goals — while some loan types consistently offer lower rates, they may do so at the expense of higher monthly payments or complicated repayment terms. Weigh the pros and cons of a 15- versus 30-year loan and take time to understand ARM rates and how they differ from traditional fixed mortgage rates before signing on the dotted line.
If you’re considering an FHA loan because its interest rate is lower than a conventional loan rate, make sure you understand why to look at annual percentage rates (APRs), not just interest rates, when comparing FHA and conventional loans.
A teaser rate is a lower initial rate offered on a mortgage loan for a set time period before the actual fixed mortgage rate goes into effect. Teaser rates are often obtained through an adjustable-rate mortgage (ARM) loan, that have 3-, 5- or 7-year options.
Mortgage closing costs usually range anywhere from 2% to 6% of your total home loan amount. The cost can vary depending on many factors, including your lender and how much you’re borrowing. It’s possible to get the seller or lender to pay a portion or all of these costs.
The Fed’s monetary policy directly affects adjustable-rate mortgages, since their interest rates are calculated using a number — known as an index — that fluctuates with the broader economy.
The Fed’s policy only indirectly impacts fixed-rate mortgages, which can move more independently and, in some cases, move in the opposite direction of the federal funds rate.
We may see mortgage rates as low as 3% again, but likely not anytime soon. The good news is the Federal Reserve cut interest rates in September 2024 for the first time since 2020, which may push mortgage rates down a bit.