Fixed mortgage rates today have increased across the board. Freddie Mac has reported a six-basis-point increase in the 30-year fixed rate and a 10-point rise in the 15-year fixed rate this week.
Though the rise in mortgage rates today is not high, it can be disappointing for potential homebuyers hoping for lower rates in 2024.
In mid-October, the 30-year mortgage rate was 69 basis points higher than it is now, standing at well over 7%. Similarly, the 15-year mortgage rate was 73 basis points higher. So, while mortgage rates today might not be dropping, they are still lower than what they were six months ago.
Mortgage Rates Today
When the Federal Reserve lowers the federal funds rate, mortgage rates are likely to go down as a result. However, according to the CME FedWatch Tool, there is about a 98% chance that the Fed will keep its rate the same at its next meeting on May 1.
So, there probably will not be significant changes anytime soon. If you are ready to buy a house but waiting for rates to drop, it might not be worth holding out. Currently, the national average for a 30-year fixed-rate mortgage is 6.88%, as reported by Freddie Mac. This is a slight increase from last week’s rate of 6.82%.
Similarly, the average 15-year fixed-rate mortgage has also risen to 6.16%, up from last week’s 6.06%. Mortgage rates today are still high, and they are likely to stay that way until inflation slows down and the Federal Reserve cuts the federal funds rate.
Expectations for a Fed rate cut this spring or summer have shifted, with experts now predicting a likely decrease in September. It seems the Fed might lower its rate twice in 2024, a change from earlier forecasts that suggested three cuts this year.
30-Year Mortgage Rate and 15-Year Mortgage Rate
Currently, the average 30-year mortgage rate is 6.88%. The 30-year mortgage rate is popular because it spreads out payments over 360 months, keeping monthly payments relatively low.
For instance, if you had a $300,000 mortgage with a 30-year term at a 6.88% rate, your monthly payment in 30-year mortgage rate toward principal and interest would be $1,971.79. Over the life of the loan, you’d pay $409,844 in interest, turning a $300,000 mortgage into a total cost of $709,844, in terms of a 30-year mortgage rate.
The mortgage rates today showed that the average 15-year mortgage rate is 6.16%. Choosing between a 15-year mortgage rate and a 30-year mortgage rate involves considering several factors.
With a 15-year mortgage rate, you will enjoy a lower interest rate compared to a 30-year mortgage rate term. This is beneficial in the long run because you will pay off your loan 15 years earlier, reducing the time for interest to accumulate. However, since you are paying the same debt in half the time, your monthly payments will be higher.
For example, if you take out a $300,000 mortgage with a 15-year mortgage rate term at a 6.16% rate, your monthly payment toward principal and interest would be $2,557.58. Yet, you’d pay only $160,364 in interest over 15 years, saving almost $250,000 in interest compared to a 30-year mortgage rate term.
Read Also:
Bank of Canada Raised the Neutral Rate: All About You Need to Know
Bank of Canada Rate Decision Out, Rates Remain Steady for the Sixth Time