Mortgage Interest Rates Today, July 25, 2024 | Rates Hover Around 6.5%

These are today's mortgage and refinance rates. Mortgage rates fell earlier this month thanks to slowing inflation and are holding steady this week.

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Average 30-year mortgage rates continue to hover in the mid-6% range after dropping earlier this month, according to Zillow data.

Mortgage rates are expected to trend down throughout the next couple of years as inflation slows and the Federal Reserve lowers the federal funds rate. This means that hopeful homebuyers who were priced out by high rates may soon have the opportunity to jump back into the market.

For those who are currently shopping for a home, you can reduce the impact of today's still-high mortgage rates by shopping around with multiple mortgage lenders and making sure your finances are in a good spot before applying for a mortgage. 

For example, you generally need at least a 620 credit score to get a mortgage. But if you have a higher score, you could snag a much better rate.

According to myFICO, a borrower with a score between 620 and 639 may need to pay more than 8% to get a mortgage, while a borrower with a score above 760 could get a rate as low as 6.447%. On a $300,000 loan, the borrower with the higher score will pay $323 less each month on their mortgage payment. 

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 Fixed Mortgage Rates

The average 30-year fixed mortgage rate was 6.77% last week, according to Freddie Mac. This is a 12-basis-point decrease from the previous week.

The 30-year fixed-rate mortgage is the most common type of 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 or adjustable rates. 

15-Year Fixed Mortgage Rates

Last week, average 15-year mortgage rates were 6.05%, a 12-basis-point decrease from the previous week, according to Freddie Mac data.

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.

When Will Mortgage Rates Go Down?

Mortgage rates started ticking up from historic lows in the second half of 2021 and increased over three percentage points in 2022. Rates also increased dramatically last year, though they trended back down toward the end of 2023.

As inflation comes down, mortgage rates will recede as well. Most major forecasts expect rates to go down throughout the remainder of 2024.

For homeowners looking to leverage their home's value to cover a big purchase — such as a home renovation — a home equity line of credit (HELOC) may be a good option while we wait for mortgage rates to ease. Check out some of our best HELOC lenders to start your search for the right loan for you.

A HELOC is a line of credit that lets you borrow against the equity in your home. It works similarly to a credit card in that you borrow what you need rather than getting the full amount you're borrowing in a lump sum. It also lets you tap into the money you have in your home without replacing your entire mortgage, like you'd do with a cash-out refinance.

Current HELOC rates are relatively low compared to other loan options, including credit cards and personal loans. 

How Do Fed Rate Hikes Affect Mortgages?

The Federal Reserve increased the federal funds rate to try to slow economic growth and get inflation under control. Inflation has come down a lot in response to this, though it's still a little bit above the Fed's target rate of 2%.

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 hikes to affect the broader economy. 

Fed hikes have pushed mortgage rates up over the last two years. But the Fed has indicated that it's likely done hiking rates and could start cutting in 2024. Once the Fed cuts rates, mortgage rates should fall even further.