Mortgage Rates Today: 30- & 15-Year Rates Near 1-Year Lows (December 2023)

National average mortgage and refinance rates continue to trend near one-year lows, presenting potential opportunities for homebuyers and homeowners alike. According to Freddie Mac, the average 30-year fixed mortgage rate for the week is 6.09%, significantly lower than the 6.96% recorded one year ago. The 15-year fixed rate also saw a decrease, averaging 5.44% compared to 6.16% last year.

Current Mortgage Rate Landscape

These shifts in rates come at a time when prospective buyers and those looking to refinance are closely monitoring market conditions. Current rates, as of this week, include 5.96% for a 30-year fixed mortgage, 6.07% for a 20-year fixed, and 5.51% for a 15-year fixed, according to Zillow data. Adjustable-rate mortgages (ARMs) are also available, with 5/1 ARMs at 6.19% and 7/1 ARMs at 6.06%.

Did You Know? The 30-year fixed mortgage rate is currently 6.09%, down from 6.96% one year ago.

For veterans, VA loan options offer competitive rates, with a 30-year VA loan at 5.65% and a 15-year VA loan at 5.33%. A 5/1 VA ARM is available at 5.31%. Refinance rates mirror these trends, with a 30-year fixed refinance rate at 6.12% and a 15-year fixed refinance rate at 5.64%.

Understanding Mortgage Rate Types

Homebuyers have a choice between fixed-rate and adjustable-rate mortgages. A fixed-rate mortgage maintains a consistent interest rate throughout the loan term, offering predictability. Conversely, an adjustable-rate mortgage (ARM) features an initial fixed rate period, after which the rate adjusts periodically based on market conditions. For example, a 7/1 ARM offers a fixed rate for the first seven years, then adjusts annually for the remaining 23 years.

Expert Insight: The choice between a fixed-rate and adjustable-rate mortgage involves a trade-off between predictability and potential savings, depending on market expectations and the homeowner’s long-term plans.

The initial portion of a mortgage payment primarily covers interest, with a gradually increasing share allocated to the principal as the loan progresses. A 30-year fixed-rate mortgage provides lower monthly payments but results in higher overall interest paid over the loan’s lifetime. A 15-year fixed-rate mortgage offers lower interest costs but requires higher monthly payments.

Looking Ahead

Mortgage rates have generally decreased since the end of May and remain lower than this time last year. While economists do not anticipate significant declines through 2026, rates are expected to remain within a relatively stable range. The Mortgage Bankers Association (MBA) forecasts a 30-year mortgage rate near 6.4% through 2026, while Fannie Mae predicts a rate above 6% through next year, potentially dipping to 5.9% in the fourth quarter of 2026. Rates are likely to remain relatively unchanged in 2027, with forecasts ranging from 6.3% to 5.9%.

Frequently Asked Questions

What is the current average 30-year fixed mortgage rate?

The current national average 30-year fixed mortgage rate is 6.09%, according to Freddie Mac.

Are refinance rates typically higher or lower than purchase rates?

Mortgage refinance rates are often higher than rates when you buy a house, although this is not always the case.

What is the difference between a fixed-rate and an adjustable-rate mortgage?

A fixed-rate mortgage locks in your rate for the entire loan term, while an adjustable-rate mortgage locks in your rate for a predetermined period and then adjusts it periodically.

Considering these factors, what role do you believe mortgage rate fluctuations will play in your future housing decisions?