May 30, 2024
Mortgage

Today’s Mortgage Rates for December 25, 2023: Rates up


Date Published:
Dec 25, 2023



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Editor’s Note: Parts of this story were auto-populated using data from Curinos, a mortgage research firm that collects data from more than 250 lenders. For more details on how we compile daily mortgage data, check out our methodology here.

The 30-year fixed-rate mortgage has stayed close to 7% for the last two weeks, according to data analyzed by MarketWatch Guides – but recent economic news could signal that rates will continue to fall. After hitting 8% in mid-October, the 30-year fixed-rate mortgage has dropped nearly a percentage point over two months. 

In their last meeting of 2023, the Federal Reserve held interest rates steady, leaving the federal funds rate at a target range of 5.25% to 5.50%. The Fed also foreshadowed multiple rate cuts in 2024. 

Mortgage rates do not always move in tandem with the federal funds rate, instead tending to track the yield on 10-year Treasury bonds. However, economists with the National Association of Realtors predict that mortgage rates will continue to fall in 2024 if the Fed sticks to its forecast and inflation cools.

In fact, November estimates from the Mortgage Banker Association predict that the 30-year fixed-rate mortgage will end next year at 6.1%, almost another full percentage point lower than where it stands today.

Here are today’s average mortgage rates: 

  • 30-year fixed mortgage rate: 7.09%
  • 15-year fixed mortgage rate: 6.29%
  • 5/6 ARM mortgage rate: 6.89%
  • Jumbo mortgage rate: 7.02%

Current Mortgage Rates

Product Rate Last Week Change
30-Year Fixed Rate 7.09% 7.08% +0.01
15-Year Fixed Rate 6.29% 6.33% -0.04
5/6 ARM 6.89% 6.97% -0.08
7/6 ARM 7.03% 7.10% -0.07
10/6 ARM 7.12% 7.15% -0.03
30-Year Fixed Rate Jumbo 7.02% 7.06% -0.04
30-Year Fixed Rate FHA 6.87% 6.81% +0.06
30-Year Fixed Rate VA 6.81% 6.81% 0.00

Disclaimer: The rates above are based on data from Curinos, LLC. All rate data is accurate as of Monday, December 25, 2023. Actual rates may vary.

>> View historical mortgage rate trends

Mortgage Rates for Home Purchase

30-year fixed-rate mortgages are up, +0.01

The average 30-year fixed-mortgage rate is 7.09%. Since the same time last week, the rate is up, changing +0.01 percentage points

At the current average rate, you’ll pay $671.36 per month in principal and interest for every $100,000 you borrow. You’re paying more compared to last week when the average rate was 7.08%. 

15-year fixed-rate mortgages are down, -0.04

The average rate you’ll pay for a 15-year fixed-mortgage is 6.29%, a decrease of -0.04 percentage points compared to last week. 

Monthly payments on a 15-year fixed-mortgage at a rate of 6.29% will cost approximately $859.60 per $100,000 borrowed. With the rate of 6.33% last week, you would’ve paid $861.79 per month.

5/6 adjustable-rate mortgages are down, -0.08

The average rate on a 5/6 adjustable rate mortgage is 6.89%, a decrease of -0.08 percentage points over the last seven days. 

Adjustable-rate mortgages, commonly referred to as ARMs, are mortgages with a fixed interest rate for a set period of time followed by a rate that adjusts on a regular basis. With a 5/6 ARM, the rate is fixed for the first 5 years and then adjusts every six months over the next 25 years. 

Monthly payments on a 5/6 ARM at a rate of 6.89% will cost approximately $657.93 per $100,000 borrowed over the first 5 years of the loan. 

Jumbo loan interest rates are down, -0.04

The average jumbo mortgage rate today is 7.02%, a decrease of -0.04 percentage points over the past week. 

Jumbo loans are mortgages that exceed loan limits set by the Federal Housing Finance Agency (FHFA) and funding criteria of Freddie Mac and Fannie Mae. This generally means that the amount of money borrowed is higher than  $726,200.

Product Monthly P&I per $100,000 Last Week Change
30-Year Fixed Rate $671.36 $670.68 +$0.68
15-Year Fixed Rate $859.60 $861.79 -$2.19
5/6 ARM $657.93 $663.29 -$5.36
7/6 ARM $667.32 $672.03 -$4.71
10/6 ARM $673.38 $675.41 -$2.03
30-Year Fixed Rate Jumbo $666.65 $669.34 -$2.69
30-Year Fixed Rate FHA $656.59 $652.59 +$4.00
30-Year Fixed Rate VA $652.59 $652.59 $0.00

Note: Monthly payments on adjustable-rate mortgages are shown for the first five, seven and 10 years of the loan, respectively. 

Factors That Affect Your Mortgage Rate

Mortgage rates change frequently based on the economic environment. Inflation, the federal funds rate, housing market conditions and other factors all play into how rates move from week-to-week and month-to-month. 

But outside of macroeconomic trends, several other factors specific to the borrower will affect the mortgage interest rate. They include: 

  • Financial situation: Mortgage lenders use past financial decisions of borrowers as a way to evaluate the risk of loaning money. 
  • Loan amount and structure: The amount of money that bank or mortgage lender loans and its structure (including both the term and whether its a fixed-rate or adjustable-rate).  
  • Location: Mortgage rates vary by where you are buying a home. Areas with more lenders, and thus more competition, may have lower rates. Foreclosure laws can also impact a lender’s risk, affecting rates.
  • Whether borrowers are first-time homebuyers: Oftentimes first-time homebuyer programs will offer new homeowners lower rates. 
  • Lenders: Banks, credit unions and online lenders all may offer slightly different rates depending on their internal determination.

How To Shop for the Best Mortgage Rate

Comparison shopping for a mortgage can be overwhelming, but it’s shown to be worth the effort. Homeowners may be able to save between $600 and $1,200 annually by shopping around for the best rate, researchers found in a recent study by Freddie Mac. That’s why we put together steps on how to shop for the best mortgage rate. 

1. Check credit scores and credit reports

A borrower’s credit situation will likely determine the type of mortgage they can pursue, as well as their rate. Conventional loans are typically only offered to borrowers with a credit score of 620 or higher, while FHA loans may be the best option for borrowers with a FICO score between 500 and 619. Additionally, individuals with higher credit scores are more likely to be offered a lower mortgage interest rate. 

Mortgage lenders often review scores from the three major credit bureaus: Equifax, Experian and TransUnion. By viewing your scores ahead of lenders considering you for a loan, you can check for errors and even work to improve your score by paying down balances and limiting new credit cards and loans. 

2. Know the options

There are four standard mortgage programs: conventional, FHA, VA and USDA. To get the best mortgage rate and increase your odds of approval, it’s important for potential borrowers to do their research and apply for the mortgage program that best fits their financial situation. 

The table below describes each program, highlighting minimum credit score and down payment requirements. 

Though conventional mortgages are most common, borrowers will also need to consider their repayment plan and term. Rates can be either fixed or adjustable and terms can range from 10 to 30 years, though most homeowners opt for a 15- or 30-year mortgage. 

3. Compare quotes across multiple lenders

Shopping around for a mortgage goes beyond comparing rates online. We recommend reaching out to lenders directly to see the “real” rate as figures listed online may not be representative of a borrower’s particular situation. While most experts recommend getting quotes from three to five lenders, there is no limit on the number of mortgage companies you can apply with. In many cases, lenders will allow borrowers to prequalify for a mortgage and receive a tentative loan offer with no impact to their credit score.

After gathering your loan documents – including proof of income, assets and credit – borrowers may also apply for pre-approval. Pre-approval will let them know where they stand with lenders and may also improve  negotiating power with home sellers. 

4. Review loan estimates

To fully understand which lender is offering the cheapest loan overall, take a look at the loan estimate provided by each lender. A loan estimate will list not only the mortgage rate, but also a borrower’s annual percentage rate (APR), which includes the interest rate and other lender fees such as closing costs and discount points. 

By comparing loan estimates across lenders, borrowers can see the full breakdown of their possible costs. One lender may offer lower interest rates, but higher fees and vice versa. Looking at the loan’s APR can give you a good apples-to-apples comparison between lenders that takes into account both rates and fees.

5. Consider negotiating with lenders on rates

Mortgage lenders want to do business. This means that borrowers may use competing offers as leverage to adjust fees and interest rates. Many lenders may not lower their offered rate by much, but even a few basis points may save borrowers more than they might think in the long run. For instance, the difference between 6.8% and 7.0% on a 30-year, fixed-rate $100,000 mortgage is roughly $5,000 over the life of the loan. 

Expert Forecasts for Mortgage Rates

With mortgage interest rates climbing steadily throughout the first half of 2023 and exceeding 7%, prospective homeowners may be wondering: Will there be any relief going forward? Some experts are optimistic. 

Fannie Mae and the Mortgage Bankers Association (MBA) project that rates will fall going into 2024 and throughout next year. In fact, the MBA predicts that rates will end 2024 at 6.1%.

More Mortgage Resources

Methodology

Every weekday, MarketWatch Guides provides readers with the latest rates on 11 different types of mortgages. Data for these daily averages comes from Curinos, LLC, a leading provider of mortgage research that collects data from more than 250 lenders. For more details on how we compile daily mortgage data, check out our comprehensive methodology here.

Editor’s Note: Before making significant financial decisions, consider reviewing your options with someone you trust, such as a financial adviser, credit counselor or financial professional, since every person’s situation and needs are different.

 



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