The average mortgage interest rates increased slightly week over week — 30-year fixed rates went up (6.85% to 6.91%) as did 15-year fixed rates (6.00% to 6.13%).
he number of mortgage applications decreased 21.9% as reported by Mortgage Bankers Association. The Market Composite Index, a measure of mortgage loan application volume, decreased 21.9 percent on a seasonally adjusted basis from two weeks earlier. On an unadjusted basis, the Index decreased 55 percent compared with two weeks ago. The holiday adjusted Refinance Index decreased 36 percent from two weeks ago and was 10 percent higher than the same week one year ago. The unadjusted Refinance Index decreased 62 percent from two weeks ago and was 6 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 13 percent compared with two weeks ago. The unadjusted Purchase Index decreased 48 percent compared with two weeks ago and was 17 percent lower than the same week one year ago.
“Mortgage rates moved higher through the last full week of 2024, reaching almost 7 percent for 30-year fixed-rate loans,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “Not surprisingly, this increase in rates – at a time when housing activity typically grinds to a halt – resulted in declines in both refinance and purchase applications.”
The interest rates reported below are from a weekly survey of 100+ lenders by Freddie Mac PMMS. These average rates are intended to give you a snapshot of overall market trends and may not reflect specific rates available for you.
Shop and compare your personalized rates from multiple lenders (Jan 5th, 2025)
| Weekly Rate Trends | 30-Year Fixed | 15-Year Fixed |
| 1/2/25 | 6.91% ↑ | 6.13% ↑ |
| 12/26/24 | 6.85% | 6.00% |
| 12/19/24 | 6.72% | 5.92% |
| 12/12/24 | 6.60% | 5.84% |
Copyright 2025 Freddie Mac. Averages are based on conforming mortgages with 20% down.
How do I get the best mortgage rate?
To get the best mortgage interest rate for your situation, it’s best to shop around with multiple lenders.
According to research from the Consumer Financial Protection Bureau (CFPB), almost half of consumers do not compare quotes when shopping for a home loan, which means losing out on substantial savings.
Interest rates help determine your monthly mortgage payment as well as the total amount of interest you’ll pay over the life of the loan. While it may not seem like much, even a half of a percentage point increase can amount to a significant amount of money.
Comparing quotes from multiple lenders ensures that you’re getting the most competitive mortgage rate for you. And, if lenders know you’re shopping around, they may even be more willing to waive certain fees or offer better terms for some buyers. Either way, you reap the benefits.
What determines my mortgage interest rate?
Your mortgage rate is influenced by a variety of factors that fit into two categories:
- The current economic climate: Factors like inflation and the Federal Reserve’s benchmark rate can have a big influence on current mortgage rates
- The specifics of your financial life: Within the context of the mortgage market, your personal finances help determine your precise interest rate
While you can’t control the federal funds rate or other economic conditions, you can do things to improve your personal finances before applying for a mortgage loan.
Verify your mortgage eligibility. Start here (Jan 5th, 2025)
Any change to one of the following seven things can directly impact the specific interest rate you’ll qualify for.
Credit Score
Your credit score has one of the biggest impacts on your mortgage rate as it’s a measure of how likely you’ll repay the loan on time. The higher your score, the lower your rates.
If you haven’t pulled your credit score and addressed any issues, then start there before reaching out to lenders.
A better credit score opens up more loan options and lower interest rates in any housing market.
Down Payment
In general, the higher your down payment the lower your interest rate, because you’re viewed as a less risky borrower than someone who finances the entire purchase.
If you’re unable to put at least 20 percent down, then most lenders require Private Mortgage Insurance (PMI), which will be added to the cost of your overall monthly mortgage payment.
A lot of first-time homebuyer programs — such as statewide and local down payment assistance — can help you come up with a bigger down payment.
Loan Type
There are different types of mortgage loans on the market with different eligibility requirements. Not all lenders offer all loan types, and rates can vary significantly depending on the loan type you choose.
Some common mortgage loan products are conventional, FHA, USDA, and VA loans.
Within most of these loan types, you can choose a fixed-rate mortgage (FRM) or an adjustable-rate loan (ARM). ARM rates are often substantially lower than fixed rates, but keep in mind you’ll only hold that low rate for a few years (typically 5, 7, or 10) before it has the potential to increase.
Verify your mortgage eligibility. Start here (Jan 5th, 2025)
Loan Terms
Your loan term indicates how long you have to repay the loan. Shorter-term loans tend to have lower interest rates, but higher monthly payments when compared to the standard 30-year mortgage term.
Exactly how much lower your interest rate and how much higher the monthly payment will be depends a lot on the specific loan term and interest rate type you choose.
Interest Rate Type
There are two basic types of interest rates: fixed and adjustable.
- Fixed interest rates stay the same for the entire loan term
- Adjustable rates have an initial fixed period (five or seven years is common), but will fluctuate after that period based on the current market rates for the remainder of the loan
Some home buyers take advantage of the low intro rate on an ARM if they know they’ll move or refinance before the initial rate expires. For many buyers, though, a fixed-rate loan is preferable as it offers predictability and stability over the life of the loan.
Loan Amount
The loan amount will differ from the price of the home. It’s the total amount you are borrowing, including any closing costs your roll into the price of the home, less than down payment.
If you roll the closing costs and other borrowing fees into your loan, you may pay a higher interest rate than someone who pays those fees upfront. Loans that are smaller or larger than the limits for conforming loans may pay higher interest rates too.
Location
Interest rates vary slightly depending on the state you live in as well as whether you’re looking to purchase rural versus urban real estate. Some loan products like USDA loans offer generally lower rates than conventional mortgage options for eligible borrowers.
Verify your mortgage eligibility. Start here (Jan 5th, 2025)
Why does my mortgage interest rate matter?
Your mortgage interest rate impacts the amount you’ll pay monthly as well as the total interest costs you’ll pay over the life of your loan. While it may not seem like a lot, a lower interest rate even by half of a percent can add up to significant savings for you.
For example, say a borrower with a good credit score and a 20 percent down payment takes out a 30-year fixed-rate loan for $300,000. In this case, an interest rate of 4.75% instead of 5.25% translates to more than $90 per month in savings — in the first five years, that’s a savings of $5,500.
It’s equally important to look at the total interest cost of your loan. In the same scenario, a half percent decrease in interest rate means a savings of almost $33,000 in total interest owed over the life of the loan.
The cost savings of different interest rates for a $300K 30-year fixed loan
| Interest Rate* | Monthly Mortgage Payment** | Total Interest Costs |
| 5.25% | $1,657 | $296,692 |
| 4.75% | $1,565 | $263,789 |
**Amount doesn’t include property taxes, homeowners insurance, or HOA dues (if applicable).
Current mortgage interest rates
Freddie Mac’s weekly report covers mortgage rates from the previous week, but interest rates change daily — mortgage rates today may be different than reported.
To find out what rates are currently available, compare quotes from multiple lenders.
Verify your mortgage eligibility. Start here (Jan 5th, 2025)
Mortgage interest rate FAQs
Will interest rates rise in 2025?
Interest rates change daily. They have trended upward in 2025, bouncing back from the record lows of the pandemic era.
What are interest rates based on?
Fixed mortgage interest rates operate in their own market. They’re not directly tied to the Federal Reserve’s fed funds rate, although this benchmark rate can help influence the direction mortgage rates are headed. Other factors that influence mortgage rates include the health of the economy, the inflation rate, and how much demand lenders are seeing for home buying and refinancing. Only adjustable-rate mortgages are directly tied to market indices and therefore to the Fed’s benchmark rate.
How does your credit score affect your rate?
Your credit score measures your likelihood of making continuous, on-time mortgage payments. Homebuyers with higher credit scores seem less risky to lenders. So, in general, the higher your credit score, the lower your mortgage rate. But other factors such as your personal debt, down payment size, and loan program also influence your rate.
What is an APR?
APR stands for annual percentage rate. Your mortgage interest rate is part of your APR, but APR also includes additional borrowing costs such as mortgage insurance premiums or other fees that make your loan possible. Your APR will be higher than your interest rate.
How many times will the Fed raise rates in 2025?
The Federal Open Market Committee (FOMC) meets every six weeks and could change the Fed’s benchmark rate at any meeting. With inflation at levels not seen in 40 years, most economists expect multiple rate hikes this year.
What are today’s interest rates?
Rates change every day. To see weekly average rates, check out Freddie Mac’s Primary Mortgage Market Survey. These rates show the overall climate of the mortgage market, but your individual rate will depend on your personal finances.
Is a 3.5% interest rate good?
In today’s climate, 3.5 percent interest on a mortgage is below average. In 2020 and 2021, during the record low rates of the pandemic, 3.5 percent was above average for a new 30-year mortgage.
Are mortgage rates high right now?
Rates have been higher — a lot higher — than they are today. In October of 1981, for example, average rates topped 18 percent. Forty years later, in October of 2021, average rates on 30-year mortgages were below 3 percent. So, most homebuyers today are paying rates much closer to record lows than to record highs.
Shop and compare your personalized rates from multiple lenders. (Jan 5th, 2025)
