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Mortgage rate news this week - Dec. 12, 2024

Mortgage rates tick down to 6.78%

Mortgage rates fell slightly this week, with 30-year fixed-rate loans averaging 6.78 percent, according to Bankrate’s latest lender survey.

The Federal Reserve cut its benchmark interest rate again last month, but mortgage rates responded by spiking before drifting back down a bit.

One key driver: President-elect Donald Trump’s victory, along with a Republican takeover of the U.S. Senate. Given the outcome, economists now expect tax cuts, which could add trillions of dollars to the federal deficit. That, in turn, could continue to push up yields on 10-year Treasury bonds — the benchmark for fixed mortgage rates.

Meanwhile, the Fed is largely anticipated to issue another rate cut next week, but might temper expectations about further rate cuts in 2025.

Learn more: Weekly mortgage rate trend predictions

How to compare mortgage rates

Getting the best possible rate on your mortgage can make a big difference in your monthly budget — not to mention potentially thousands saved in interest over the life of the loan. You won’t know what rates you qualify for, though, unless you narrow down the best type of mortgage for your situation and comparison-shop. Here’s how to do it:

• Decide on the right type of mortgage. Consider your credit score and down payment, how long you plan to stay in the home, how much you can afford in monthly payments and whether you have the risk tolerance for a variable-rate loan versus a fixed-rate loan. Our mortgage calculator can help you estimate your monthly mortgage payment in various scenarios.
• Shop around. Mortgage rates change often and vary widely by lender, loan type and term. When comparing lenders, pay attention to the APR, not just the interest rate. The APR, or annual percentage rate, reflects the total cost of the loan, including the interest rate and other fees.
• See what others have to say. Check out our mortgage lender reviews and other testimonials to uncover the lenders with attractive rates and top-notch customer experience. 

Factors that determine your mortgage rate

Your mortgage rate depends on a number of factors, including your individual credit profile and what’s happening in the broader economy. These variables include:

• Your credit and finances: The better your credit score, the better interest rate you’ll get. The same goes for the size of your down payment and the amount of debt you carry: Generally, if you have more money to put down, you’ll get a lower rate. If you have additional debt, your rate might be higher.
• Loan amount: The size of your loan can impact your rate.
• Loan structure: Your rate varies whether you’re obtaining a fixed-rate or adjustable-rate loan. It also depends on the length of the loan (for example, 30 years or 15 years).
• Location of the property: Rates vary depending on where you’re buying.
• Whether you’re a first-time homebuyer: Many first-time homebuyer loan programs include a lower-rate mortgage.
• Economic factors: Broadly, mortgage rates are impacted by forces like the Federal Reserve, inflation and investor appetite.
• The lender you work with: Lenders set rates based on many factors, including their own supply and demand.
• Mortgage points. Mortgage points, also referred to as discount points, help homebuyers reduce their interest rate and monthly mortgage payments. Each point typically lowers an interest rate by 0.25 percentage points. For example, one point would lower a mortgage rate of 6 percent to 5.75 percent. The cost of a point is typically 1 percent of the total amount borrowed. For more details, see Bankrate’s guide to mortgage points.
• The size of your down payment. If you put down less than 20 percent of the purchase amount, you may pay a higher rate.

How does the Federal Reserve affect mortgage rates?

Like any other financial product, the cost of a mortgage fluctuates with the happenings of the economy, including Federal Reserve decisions. The central bank doesn’t set specific mortgage rates, but its policies set the tone for what banks and other lenders charge for loans.

How to refinance your current mortgage

Next steps to getting a mortgage

Before you start applying for a mortgage, here are some mortgage resources to prepare you for the process:

Meet our Bankrate experts

Written by: Jeff Ostrowski, Principal Reporter, Mortgages

I cover mortgages and the housing market. Before joining Bankrate in 2020, I spent more than 20 years writing about real estate and the economy for the Palm Beach Post and the South Florida Business Journal. I’ve had a front-row seat for two housing booms and a housing bust. I’ve twice won gold awards from the National Association of Real Estate Editors, and since 2017 I’ve served on the nonprofit’s board of directors.

Read more from Jeff Ostrowski

Edited by: Suzanne De Vita, Senior Editor, Home Lending

I’ve covered the housing market, mortgages and real estate for the past 12 years. At Bankrate, my areas of focus include first-time homebuyers and mortgage rate trends, and I’m especially interested in the housing needs of baby boomers. In the past, I’ve reported on market indicators like home sales and supply, as well as the real estate brokerage business. My work has been recognized by the National Association of Real Estate Editors.

Read more from Suzanne De Vita

Reviewed by: Greg McBride, CFA, Chief Financial Analyst, Bankrate

Greg McBride is a CFA charterholder with more than a quarter-century of experience in personal finance, including consumer lending prior to coming to Bankrate. Through Bankrate.com's Money Makeover series, he helped consumers plan for retirement, manage debt and develop appropriate investment allocations. He is an accomplished public speaker, has served as a Wall Street Journal Expert Panelist and served on boards in the credit counseling industry for more than a decade and the funding board of the Rose Foundation’s Consumer Financial Education Fund.

Read more from Greg McBride