Expect interest rates to fluctuate this week

The development of mortgage interest rates varies today. According to Zillow data, the interest rate on 30-year fixed-rate mortgages fell two basis points 6.55%and the 15-year fixed interest rate remains unchanged 5.83%. On the other hand, the 5/1 ARM rate fell 22 basis points to 10.00 6.48%.

Interest rates are likely to fluctuate over the next few days as the market digests the presidential election results. Even if we don't have official results by tonight or tomorrow, the odds will change as we begin to see which candidate is more likely to win.

Dig Deeper: What determines mortgage interest rates? It's complicated.

Here are the current mortgage rates according to our latest Zillow data:

• 30 years fixed: 6.55%

• 20 years fixed: 6.47%

• 15 years fixed: 5.83%

• 5/1 ARM: 6.48%

• 7/1 ARM: 6.88%

• 30 year old VA: 5.90%

• 15 year old VA: 5.41%

• 5/1VA: 5.96%

Remember, these are national averages rounded to the nearest hundredth.

Read more: This will help you get the lowest possible mortgage interest rates

These are the current mortgage refinance rates according to the latest Zillow data:

• 30 years fixed: 6.58%

• 20 years fixed: 6.45%

• 15 years fixed: 5.82%

• 5/1 ARM: 6.72%

• 7/1 ARM: 6.79%

• 30 year old VA: 5.90%

• 15 year old VA: 5.61%

• 5/1 VA: 5.84%

Here too, the figures given are national average values ​​rounded to the nearest hundredth. The refinancing interest rates are usually higher than the purchase interest rates.

You can use a mortgage calculator to determine how different mortgage terms and interest rates affect your monthly payments. Use Yahoo Finance's free mortgage calculator to play around with different outcomes.

Our calculator also takes factors like property taxes and home insurance into account when calculating your estimated monthly mortgage payment. This will give you a better overview of your total monthly payment than if you just looked at the mortgage amount and interest.

As a rule of thumb, 15-year mortgage rates are lower than 30-year mortgage rates. When comparing 15- or 30-year mortgage rates, keep in mind that the shorter term will save you money on interest in the long run. However, your monthly payments will be higher because you pay off the same loan amount in half the time.

For example, a $400,000, 30-year mortgage with an interest rate of 6.55% would require you to make a monthly payment of approximately $2,541 on your mortgage amount and interest. Because interest accumulates over decades, you end up paying $514,918 in interest.

If you take out a $400,000, 15-year mortgage with an interest rate of 5.83%, you'll pay approximately $3,339 monthly on your capital and interest. However, you only pay $200,984 interest over the years.

If the 15-year monthly mortgage payment is too high, remember that you can always make additional mortgage payments on your 30-year loan to pay off your mortgage faster and ultimately pay less interest.

With a fixed-rate mortgage, your interest rate is fixed from day one. However, you will receive a new interest rate when you refinance your mortgage.

With an adjustable rate mortgage, your interest rate stays the same for a specific period of time. Then the tariff increases or decreases depending on several factors, such as: B. the economic situation and the maximum amount that your tariff can change depending on the contract. For example, with a 7/1 ARM, your rate would be fixed for the first seven years and then change every year for the remainder of your term.

Adjustable interest rates sometimes start lower than fixed interest rates, but once the initial rate lock-in period ends, you risk your interest rate increasing. Fixed tariffs also currently start lower than variable tariffs.

Dig Deeper: Variable or fixed rate mortgage – which should you choose?

Mortgage rates trended downward from early August until the Federal Reserve meeting on September 18, when the central bank announced a 50 basis point cut in the federal funds rate. Since this announcement, mortgage rates have fluctuated somewhat. They are likely to continue to fluctuate in 2024 and many experts agree that they will not fall below 6% this year.

The trajectory of future mortgage rates will largely depend on the Federal Reserve's decision whether or not to cut interest rates at its future meetings. The federal funds rate has no direct impact on mortgage rates, but it is a good indicator of how the economy as a whole is doing. So when the Fed interest rate goes down, mortgage rates typically go down as well.

Current mortgage rates already factor in an expected rate cut in November, although further cuts in 2025 will likely lower them even further.

Learn more: How the Federal Reserve Affects Mortgage Rates

According to Zillow data, today's 30-year fixed rate is 6.55% and the 30-year refinance rate is 6.58%. These are the national averages. So keep in mind that the average may vary in your state or city. Your rate will also vary depending on your personal finances.

Mortgage rates are expected to fall throughout 2025 – but remember, there are no guarantees.

Mortgage rates will likely be above 6% in 2024 and then decline more significantly in 2025.