Mortgage rates on 30-year loans fell another day Tuesday. They have now fallen for four days and the average rate has dropped to 6.62%. This is the lowest rate since October midway. The rate movement of most other types of mortgages was down as well on Tuesday.
| National Averages of Lenders' Best Mortgage Rates | |
|---|---|
| Loan Type | New Purchase |
| 30 Year Fixed | 6.62% |
| FHA Fixed 30-Year Rate | 6.28% |
| Fixed-Term 15 Years | 5.79% |
| Jumbo 30-Year Fixed | 6.65% |
| 5/6 AR | 7.23% |
| Zillow Mortgage API is available. | |
It’s important to compare mortgage rates and shop around regularly for the best rate, regardless of what type of loan you are seeking.
Compare current mortgage rates today – Dec. 4, 2020
Today's New Purchase Mortgage Rate Averages
Mortgage rates for new 30-year purchase loans fell by another 4 basis points on Tuesday. This brings the average national rate down to 6.62 percent. That's a drop of 17 basis points over the last four market days, and takes the average to its cheapest level in more than six weeks.
Mortgage rates fell to their lowest level in two years in September, but they surged to an all-time high in November of 6,93%. Though today's average is lower, it's still more than 70 basis points above the Sept. 17 low point of 5.89%.
However, if you go back further in time, rates on 30-year mortgages are still below the April peak rate of 7.37%. The 30-year mortgage rates are now almost 1.4 percentage point lower than their historic peak last October of 8.01%.
Rates on 15-year mortgages dipped 4 basis points Tuesday, for a sixth daily decline—lowering the average to 5.79% after touching 6.09% just over a week ago. In September, the 15-year rate fell as low as 4.97%, a 2-year-low. Though today's 15-year rates are elevated, they remain almost 1.3 percentage points below last fall's historic 7.08% reading—a high since 2000.
Rates on jumbo 30 year mortgages rose by two basis points, pushing the average to 6.65%. That's still well below a recent three-month high of 6.99%. The average jumbo rate for 30-years was 6.24% in September. This is the lowest it has been in over 19 months. Although daily historical jumbo rates weren't published before 2009, it's estimated that the 8.14% peak we saw last fall was the most expensive jumbo 30-year average in 20-plus years.
| National Averages of Lenders' Best Rates – New Purchase | ||
|---|---|---|
| Loan Type | Buy New Rates | Everyday Change |
| 30 Year Fixed | 6.62% | -0.04 |
| FHA Fixed 30-Year Rate | 6.28% | -0.44 |
| VA 30-Year Fixed | 6.03% | -0.02 |
| The 20-Year Fixed Rate | 6.47% | -0.04 |
| Fixed 15 Year Term | 5.79% | -0.04 |
| FHA 15 Year Fixed | 6.40% | No Change |
| Ten-Year Fixed | 5.79% | -0.05 |
| 7/6 ARM | 7.18% | -0.05 |
| 5/6 AR | 7.23% | -0.04 |
| Jumbo 30-Year Fixed | 6.65% | +0.02 |
| Jumbo 15-Year Fixed | 6.57% | +0.05 |
| Jumbo 7/6 ARM | 7.05% | +0.04 |
| Jumbo 5/6 ARM | 7.17% | -0.01 |
| Zillow Mortgage API is available. | ||
The Weekly Freddie Mac Average
Every Thursday, Freddie Mac publishes a 30-year average mortgage rate. Last week's reading fell 3 basis points to a weekly average of 6.81%, while as recently as Sept. 26, the average sank to a two-year low of 6.08%. Last October, Freddie Mac's average moved the other way, surging to a historic 23-year peak of 7.79%.
Freddie Mac uses a different average than what we use for our 30-year rates. This is because Freddie Mac computes a week-average by combining five days’ worth of previous rates. Investopedia 30 year averages are daily and provide a much more accurate indication of changes in rates. In addition, the criteria for included loans (e.g., amount of down payment, credit score, inclusion of discount points) varies between Freddie Mac's methodology and our own.
Calculate the monthly payment for various loan scenarios using our Mortgage Calculator.
The rates we publish won’t compare directly with teaser rates you see advertised online since those rates are cherry-picked as the most attractive vs. the averages you see here. Teaser rates may involve paying points in advance or may be based on a hypothetical borrower with an ultra-high credit score or for a smaller-than-typical loan. Rates will vary depending on factors such as your credit score and income.
Why do mortgage rates rise or fall?
The mortgage rate is determined by the complex interplay of macroeconomic factors and industry-specific variables, including:
- This is the level and direction in which bond yields, particularly those on 10-year Treasury bonds, are moving.
- Current monetary policies of the Federal Reserve, particularly in relation to government bond purchases and mortgage funding.
- There is fierce competition between lenders of mortgages and loan types.
Because any number of these can cause fluctuations simultaneously, it's generally difficult to attribute the change to any one factor.
The mortgage market remained relatively flat for most of the year 2021 due to macroeconomic conditions. The Federal Reserve bought billions in bonds to respond to economic pressures caused by the pandemic. The Federal Reserve’s bond buying policy has a significant impact on mortgage rates.
The Fed will begin to taper its purchases of bonds in November 2021. Each month, it will make significant reductions until the net is zero by March 2022.
The Fed raised its federal funds rate aggressively between July 2020 and 2023 to combat inflation that has been high for decades. The fed funds rate does not directly affect mortgage rates. Mortgage rates and the Fed funds rate may even move in opposite directions.
But given the historic speed and magnitude of the Fed's 2022 and 2023 rate increases—raising the benchmark rate 5.25 percentage points over 16 months—even the indirect influence of the fed funds rate has resulted in a dramatic upward impact on mortgage rates over the last two years.
In July 2023, the Fed kept its federal funds rate near its highest level for nearly 14 months. The Fed’s first rate reduction was announced on September 18th. This is the beginning of a downward trend that should continue through 2024, and possibly 2025. This was the first cut of 0.50 percentage point.
The Fed cut the rate by 0.25 points on November 7, bringing it from 4.5% to 4.7%. This cut brings the federal funds rate to its lowest point since March 2023.
The Fed's next rate announcement will be made Dec. 18.
The Mortgage Rate Tracker
The national and state averages cited above are provided as is via the Zillow Mortgage API, assuming a loan-to-value (LTV) ratio of 80% (i.e., a down payment of at least 20%) and an applicant credit score in the 680–739 range. These rates are what you can expect to receive from lenders when they give quotes based on your qualifications. They may differ from teaser rate advertisements. © Zillow, Inc., 2024. The Zillow terms of use apply.
Article sources Investopedia expects its writers to use primary resources to back up their writing. This includes white papers, official government data, reporting original and interviews conducted with industry experts. Where appropriate, we also refer to original research by other respected publishers. Our website contains more information about our standards for producing accurate and unbiased content. The editorial Policy.
Freddie Mac. “Mortgage Rates."
Congressional Research Service. "Federal Reserve: Tapering of Asset Purchases," Page 1.
Federal Reserve. "Federal Open Market Committee: Meeting Calendars, Statements, and Minutes (2019-2026)."
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