Mortgage Rates Today
As of December 7, the Freddie Mac national average for 30-year mortgage rates was 4.93%. The average rate for 15-year mortgages was 4.43%, and the 5/1 ARM mortgage rate stood at 4.43%. The 30-year and 15-year mortgage rates moved +0.00% and +0.00% each, while 5/1 ARM rates changed by +0.01%.
U.S. Mortgage Rates Over Time
Mortgage Rates This Week
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It's widely expected that the Fed will vote to increase rates once more this year at their December meeting, assuming no major shocks to the market occur prior to year end. Rates are likely to continue their gradual upwards trend, increasing the cost of borrowing over time.
There are a few reasons why interest rates are likely to continue climbing. Continued economic growth has prompted the Federal Reserve to implement steady increases in the prime rate, which is the rate that banks pay to borrow funds. As it becomes more costly for mortgage lenders to obtain money, they pass on their increased expenses to borrowers in the form of higher interest rates, which in turn leads to higher mortgage expenses.
Should You Refinance Your Mortgage Now?
If you're thinking about refinancing this year, the long-term rise in interest rates means that you should start shopping for mortgages soon. To understand the savings at stake, consider that a $200,000 balance for a 30-year loan at today's average rate of 4.93% translates to a monthly payment of $853 before taxes and insurance. At March's average rate of 4.45%, that same balance would have cost $806 per month—a significant difference in monthly and lifetime interest costs compared to today's rate. This illustrates how important it is to shop across multiple lenders to make sure you're getting the best deal possible.
For homeowners considering a cash-out refinance, higher mortgage rates mean that it may be more efficient to obtain a home equity line of credit (HELOC). If most of the rates above are higher than your original mortgage rate, then a cash-out refinance would mean paying a higher rate on your entire balance for the full remainder of your mortgage term. By contrast, HELOC borrowers only pay interest on whatever amount of credit they decide to draw.
While HELOC rates do tend to be higher than cash-out refi rates, getting a HELOC could allow you to keep a lower rate on the rest of your mortgage debt.
More Mortgage Tips & Analysis
For more information on how to navigate the mortgage experience, take a look at our informational guides and reviews of popular mortgage lenders.
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