Rates increase as Fed follows through with cut | Mortgage rates, December 19, 2024
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Mortgage rates jumped for all loan terms compared to a week ago, according to Bankrate data. Rates for 30-year fixed, 15-year fixed, 5/1 ARMs and jumbo loans increased.
| Mortgage type | Today's rate | Last week's rate | Change |
|---|---|---|---|
| 30-year fixed | 6.84% | 6.73% | +0.11 |
| 15-year fixed | 6.12% | 6.03% | +0.09 |
| 5/1 ARM | 6.22% | 6.07% | +0.15 |
| 30-year fixed jumbo | 6.82% | 6.79% | +0.03 |
Rates accurate as of December 19, 2024.
The rates listed above are marketplace averages based on the assumptions indicated here. Actual rates listed on-site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Thursday, December 19th, 2024 at 7:30 a.m. ET.
At the conclusion of its latest meeting on Dec. 18, the Federal Reserve announced another quarter-point rate — the third cut in a row. Although the Fed has cut interest rates three times since September, mortgage rates have only risen, up 0.71 percentage points since September’s low, according to Bankrate data.
Thirty-year mortgage rates tend to track the 10-year Treasury yield, which shifts continuously alongside the economy and the forces that shape it. More recently, rates have been driven by factors like inflation, the election and geopolitical developments abroad.
“As expected, the Fed lowered rates again by 0.25 percent — it also lowered its expectations for rate cuts in 2025,” says Melissa Cohn, regional vice president of William Raveis Mortgage.
Current 30 year mortgage rate moves up, +0.11%
The average rate you'll pay for a 30-year fixed mortgage today is 6.84 percent, an increase of 11 basis points from a week ago. A month ago, the average rate on a 30-year fixed mortgage was higher, at 6.96 percent.
At the current average rate, you'll pay a combined $654.59 per month in principal and interest for every $100,000 you borrow. That's an extra $7.32 compared with last week.
While the 30-year rate is the most popular mortgage term, the 30-year mortgage also has some downsides:
- More total interest paid. A 30-year term means you'll pay more overall in interest compared with what you'd pay with a shorter-term loan.
- Higher mortgage rates. Lenders charge higher interest rates for 30-year mortgages compared to 15-year loans. That's because they're taking on the risk of not being repaid for a longer time span.
- Slower equity growth. The amortization table for a 30-year mortgage reveals a harsh reality: In the early years, almost all of your payments go to interest rather than principal. A 15-year loan brings a higher monthly payment but much faster payoff of the loan amount.
- Buying a pricier house than you should. Just because you might be able to afford more house with a 30-year loan doesn’t mean you should stretch your budget to the breaking point. Give yourself some breathing room for other financial goals and unexpected expenses. Use Bankrate’s home affordability calculator to determine how much house you can afford.
Learn more: What is a fixed-rate mortgage and how does it work?
15-year mortgage rate climbs, +0.09%
The average rate for a 15-year fixed mortgage is 6.12 percent, up 9 basis points from a week ago.
Monthly payments on a 15-year fixed mortgage at that rate will cost around $850 per $100,000 borrowed.
5/1 adjustable rate mortgage advances, +0.15%
The average rate on a 5/1 ARM is 6.22 percent, rising 15 basis points over the last week.
Monthly payments on a 5/1 ARM at 6.22 percent would cost about $614 for each $100,000 borrowed over the initial five years.
Jumbo mortgage interest rate rises, +0.03%
The average jumbo mortgage rate today is 6.82 percent, up 3 basis points from a week ago. This time a month ago, the average rate on a jumbo mortgage was greater than 6.82 at 7.00 percent.
At today's average rate, you'll pay principal and interest of $653.26 for every $100,000 you borrow. That's an additional $2.00 per $100,000 compared to last week.
30-year fixed-rate refinance increases, +0.09%
The average 30-year fixed-refinance rate is 6.85 percent, up 9 basis points over the last week. A month ago, the average rate on a 30-year fixed refinance was higher at 6.96 percent.
At the current average rate, you'll pay $655.26 per month in principal and interest for every $100,000 you borrow. Compared with last week, that's $6.00 higher.
When will mortgage rates go down?
Mortgage rates have decreased somewhat since earlier this year, with the 30-year fixed-rate loan down from a high of 7.39 percent in May to 6.91 percent as of Dec. 18.
As for next year, expect more of the same — at least for now.
“For those expecting a dramatic drop in 30-year mortgage financing rates, 2025 is probably not the year,” says Ken Johnson, Walker Family chair of Real Estate for the University of Mississippi.
More on current mortgage rates
Methodology
Bankrate displays two sets of rate averages that are produced from two surveys we conduct: one daily (“overnight averages”) and the other weekly (“Bankrate Monitor averages”).
The rates on this page represent our overnight averages. For these averages, APRs and rates are based on no existing relationship or automatic payments.
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