Mortgage and refinance rates today, December 20, 2024: Rates are higher than last December

Mortgage rates have increased this week. According to Freddie Mac, the 30-year fixed mortgage rate rose 12 basis points to 6.72% — five basis points higher than this time last year. The good news is that the 30-year rate is still lower than the November high of 6.84%.

At this point, the Federal Reserve only plans to cut the federal funds rate twice in 2025. This is a signal that mortgage interest rates could stay relatively high next year. If you’re ready to buy a home but holding out for lower rates, it may not be worth the wait. Focus on improving your finances and shopping for mortgage lenders to get the lowest rate possible.

Dig deeper: How the Federal Reserve rate decision impacts mortgage rates

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

• 30-year fixed: 6.63%

• 20-year fixed: 6.63%

• 15-year fixed: 5.97%

• 5/1 ARM: 6.68%

• 7/1 ARM: 6.68%

• 30-year VA: 6.01%

• 15-year VA: 5.58%

• 5/1 VA: 6.30%

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

Learn more: 5 strategies to get the lowest mortgage rates

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

• 30-year fixed: 6.65%

• 20-year fixed: 6.60%

• 15-year fixed: 5.86%

• 5/1 ARM: 6.38%

• 7/1 ARM: 6.75%

• 30-year VA: 5.97%

• 15-year VA: 5.76%

• 5/1 VA: 5.45%

Again, the numbers provided are national averages rounded to the nearest hundredth. Mortgage refinance rates are often higher than rates when you buy a house, although that’s not always the case.

Learn more: Want to refinance your mortgage? Here are 7 home refinance options.

Yahoo Finance has a free mortgage payment calculator. Use the calculator to see how various mortgage rates and loan terms could affect your monthly payments.

Our calculator also considers homeowners insurance, property taxes, and other expenses that affect your monthly payment. This will give you a better idea of what you’d realistically pay in a month than if you just look at the mortgage principal and interest.

A mortgage interest rate is a fee for borrowing money from your lender, expressed as a percentage. You can choose from two types of rates: fixed or adjustable.

A fixed-rate mortgage locks in your rate for the entire life of your loan. For example, if you get a 30-year mortgage with a 6% interest rate, your rate will stay at 6% for the entire 30 years unless you refinance or sell.

An adjustable-rate mortgage locks in your rate for a predetermined amount of time and then changes it periodically. Let’s say you get a 7/1 ARM with an introductory rate of 6%. Your rate would be 6% for the first seven years, then the rate would increase or decrease once per year for the last 23 years of your term. Whether your rate goes up or down depends on several factors, such as the economy and housing market.

At the beginning of your mortgage term, most of your monthly payment goes toward interest. Your monthly payment toward mortgage principal and interest stays the same throughout the years — however, less and less of your payment goes toward interest, and more goes toward the mortgage principal or the amount you originally borrowed.

Learn more: Adjustable-rate vs. fixed-rate mortgages

A 30-year fixed-rate mortgage is a good choice if you want a lower mortgage payment and the predictability that comes with having a fixed rate. Just know that your rate will be higher than if you choose a shorter term and will result in paying significantly more in interest over the years.

You might like a 15-year fixed-rate mortgage if you want to pay off your home loan quickly and save money on interest. These shorter terms come with lower interest rates, and since you’re cutting your repayment time in half, you’ll save a lot in interest in the long run. But you’ll need to be sure you can comfortably afford the higher monthly payments that come with 15-year terms.

Read more: How to decide between a 15-year and 30-year fixed-rate mortgage

Typically, an adjustable-rate mortgage could be good if you plan to sell before the introductory rate period ends. Adjustable rates usually start lower than fixed rates, then your rate will change after a predetermined amount of time. However, 5/1 and 7/1 ARM rates are very similar to 30-year fixed rates right now. Before getting an ARM just for a lower rate, compare your rate options from term to term and lender to lender.

Mortgage rates had been mostly holding stagnant or increasing since mid-September. However, the 30-year rate finally started to fall three weeks ago, and the 15-year rate has decreased for two straight weeks.

This week, rates are up again.

Mortgage rates probably won’t go down (at least not significantly) before the end of 2024. It’s possible they will drop in 2025, but because the Fed is only predicting two federal funds rate cuts next year, the decreases will probably be gradual.

Read more: When will the housing market crash again?

According to Freddie Mac, this week’s national average 30-year mortgage rate is up 12 basis points to 6.72%, and the average 15-year mortgage rate has increased by eight basis points to 5.92%.

According to its December housing forecast, Fannie Mae expects the 30-year mortgage rate to end 2024 at 6.60%. The Mortgage Bankers Association (MBA) hasn’t released its December predictions yet, but its November forecast also put the 30-year fixed mortgage rate at 6.60% at the end of the year.

There’s a decent chance mortgage rates will actually go down in 2025, not up. However, we will have to see how the next few months shake out as the markets react to Trump’s upcoming presidential term and when the Fed decides to cut its rate.