Today's Mortgage Rates | Rates Are Down Slightly, but Affordability Remains an Issue

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• Mortgage rates for December 4, 2024, are around 6.30%.
• Rates have dropped slightly in recent days, but it may be a while before affordability improves for borrowers.
• Rates are supposed to fall next year. But that hinges on inflation continuing to come down.

Mortgage rates have eased a bit in recent days, but they haven't dropped enough yet to substantially improve affordability for borrowers.

As inflation slows and the Federal Reserve continues lowering the federal funds rate, mortgage rates are expected to go down. But recent economic data has come in stronger than expected, leading to more uncertainty around the timing and pace of the Fed's cuts.

On Tuesday, the Bureau of Labor Statistics reported that job openings rose slightly in October, a sign of labor market strength. Fed officials have been keeping an eye on the labor market for signs of weakening, which could necessitate more aggressive rate cuts. But so far, it looks like the central bank will be able to take its time lowering its benchmark rate.

It's also possible that inflation could remain elevated, complicating the Fed's path. In October, the consumer price index ticked up slightly. In a speech in Washington, D.C. on Monday, Fed Governor Christopher Waller addressed concerns that inflation could stagnate above the Fed's 2% target and whether the Fed should consider pausing its rate cuts at its meeting later this month.

"Based on the economic data in hand today and forecasts that show that inflation will continue on its downward path to 2% over the medium term, at present I lean toward supporting a cut to the policy rate at our December meeting," Waller said. "But that decision will depend on whether data that we will receive before then surprises to the upside and alters my forecast for the path of inflation."

If the Fed ends up holding rates steady at its next meeting, we could see mortgage rates tick up a bit. And if inflation remains stubborn, we might not see rates drop as much in 2025.

Current Mortgage Rates

Current Refinance Rates

Mortgage Calculator

Use our free mortgage calculator to see how today's mortgage rates would impact your monthly payments. By plugging in different rates and term lengths, you'll also understand how much you'll pay over the entire length of your mortgage.

Click "More details" for tips on how to save money on your mortgage in the long run.

30-Year Mortgage Rates Today

Average 30-year mortgage rates are around 6.30%, according to Zillow data. Rates averaged around 6.56% in November. 

The 30-year fixed-rate mortgage is the most popular home loan. With this type of mortgage, you'll pay back what you borrowed over 30 years, and your interest rate won't change for the life of the loan.

The lengthy 30-year term allows you to spread out your payments over a long period of time, meaning you can keep your monthly payments lower and more manageable. The trade-off is that you'll have a higher rate than you would with shorter terms, like a 15-year mortgage. 

15-Year Mortgage Rates Today

Average 15-year mortgage rates are hovering in the high 5% range, according to Zillow data. In November, 15-year rates averaged 5.92%.

If you want the predictability that comes with a fixed rate but are looking to spend less on interest over the life of your loan, a 15-year fixed-rate mortgage might be a good fit for you. Because these terms are shorter and have lower rates than 30-year fixed-rate mortgages, you could potentially save tens of thousands of dollars in interest. However, you'll have a higher monthly payment than you would with a longer term.

Average Mortgage Refinance Rates Today

Refinance rates have gone up in recent weeks. Last month, 30-year refinance rates averaged 6.62%, while 15-year refinance rates were around 5.96%.

5-Year Mortgage Rate Trends

Here's how 30-year and 15-year mortgage rates have trended over the last five years, according to Freddie Mac data.

What Factors Influence Mortgage Rates?

Mortgage rates are determined by a variety of different factors, including larger economic trends, Federal Reserve policy, your state's current mortgage rates, the type of loan you're getting, and your personal financial profile.

While many of these factors are out of your control, you can work on improving your credit score, paying off debt, and saving for a larger down payment to ensure you get the best rate possible. 

How Does the Fed Rate Affect Mortgage Rates?

The Fed increased the federal funds rate dramatically in 2022 and 2023 to try to slow economic growth and get inflation under control. Inflation has since slowed significantly, but it's still a bit above the Fed's 2% target rate.

Mortgage rates aren't directly impacted by changes to the federal funds rate, but they often trend up or down ahead of Fed policy moves. This is because mortgage rates change based on investor demand for mortgage-backed securities, and this demand is often impacted by how investors expect Fed policy to affect the broader economy. 

Fed officials started cutting rates at their meeting in September, and they lowered rates again in November. As the Fed continues cutting rates, mortgage rates should go down. But they might not drop as much as initially anticipated.

How Low Will Mortgage Rates Go?

Mortgage rates have been elevated this month, and we probably won't see them drop much this year. But depending on how the economy evolves in 2025, we should see them ease a bit next year. 

Mortgage rates are unlikely to drop back down to the historic lows of 2020 and 2021, when 30-year fixed rates fell below 3%. But rates are expected to go down throughout the next year or two, and it's possible rates could eventually settle in closer to 6%. 

Should I Refinance Now or Wait for Mortgage Rates To Drop?

Because rates are lower now, some homeowners may be wondering if it's a good time to refinance. If you have a high interest rate on your current mortgage and could save on your monthly payment by refinancing into a lower rate, it could be worth it to refinance now.

On the other hand, because mortgage rates are expected to go down further, you might benefit from waiting to refinance.

Whether it makes sense for you to refinance ultimately comes down to how much you'll pay to refinance and how much you can save on your mortgage payment. If you save enough each month that you can recoup your out-of-pocket expenses relatively quickly, then refinancing may be worth it. You could also refinance now and then refinance again once rates drop further — it just depends on what makes sense for you financially. 

How Do Mortgage Interest Rates Work?

Your mortgage interest rate is how much you'll pay to borrow money for a home purchase or refinance. Each month, you'll make a payment to pay back the funds you borrowed, and a portion of that payment will go toward paying the interest you owe. 

The portion of your monthly payment that goes toward interest will go down over time through a process called amortization. As you pay off more of your mortgage, the loan balance is reduced, lowering your interest costs.

For example, say you get a mortgage of $300,000 with an interest rate of 6.5% to buy a home. Every month, you'll pay about $1,896. On your very first mortgage payment, only $271 of that amount will go toward reducing your loan balance, while $1,625 will be paid in interest. But if you fast forward 20 years, $992 of that same monthly payment will be applied to the loan balance, and about $905 will go toward interest.

You can ask your lender for an amortization schedule to see the breakdown of your payments throughout the life of the loan, or you can use an online amortization calculator.

How Often Do Mortgage Rates Change?

Mortgage rates change throughout the day, and they can fluctuate day-to-day or week-to-week based on what's going on in the economy. If economic conditions are relatively stable, mortgage rates might not move much. But uncertainty or expectations that conditions will change soon can send rates up or down. 

How to Shop for Mortgage Rates

Mortgage lenders don't all offer the exact same rates, so you could save a lot of money by shopping around for the best rate. 

Experts generally recommend getting quotes from a few different lenders — consider applying with at least three lenders to get an idea of the range of rates available to you. If you're still early in the process, you can apply for preapproval, which allows you to get an estimate of your rate while you're still searching for homes. If you're under contract on a home, you can apply for regular approval, which will give you a more accurate picture of what you'll pay with a given lender. 

Be sure to look at the overall offer. If you have to pay a lot in fees to get a lower rate, it might not be worth it. Also consider other benefits and features that are important to you, like if a lender has great customer service or down payment assistance.