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Tag: adjustable rate mortgage

  • Mortgage and refinance interest rates today, September 28, 2025: Adjustable rates are falling

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    Today’s mortgage rates have shifted in different directions, depending on their term. According to Zillow, the 30-year fixed mortgage rate is up slightly to 6.47%, and the 15-year fixed rate has ticked down to 5.66%.

    However, the rate on the 5/1 adjustable-rate mortgage (ARM) has decreased for the third day in a row. It could be a good time to get an ARM because they usually start out with lower rates than what you’ll get with a fixed-rate mortgage. If you plan to sell your house before the intro-rate period ends, you can enjoy lower rates until then. And who knows — by the time your rate changes in a few years, market rates could be lower.

    Dig deeper: The best mortgage lenders for first-time home buyers

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

    • 30-year fixed: 6.47%

    • 20-year fixed: 6.10%

    • 15-year fixed: 5.66%

    • 5/1 ARM: 6.66%

    • 7/1 ARM: 6.88%

    • 30-year VA: 5.89%

    • 15-year VA: 5.59%

    • 5/1 VA: 5.32%

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

    Learn more: 8 strategies for getting the lowest mortgage rates

    These are today’s mortgage refinance rates, according to the latest Zillow data:

    • 30-year fixed: 6.55%

    • 20-year fixed: 6.25%

    • 15-year fixed: 5.83%

    • 5/1 ARM: 6.91%

    • 7/1 ARM: 7.54%

    • 30-year VA: 6.16%

    • 15-year VA: 6.05%

    • 5/1 VA: 5.82%

    Again, the numbers provided are national averages rounded to the nearest hundredth. Mortgage refinance rates are often higher than rates when you buy a house, although that’s not always the case.

    Read more: Is now a good time to refinance your mortgage?

    Use the mortgage calculator below to see how various mortgage terms and interest rates will impact your monthly payments.

    Our free mortgage calculator also considers factors like property taxes and homeowners insurance when determining your estimated monthly mortgage payment. This gives you a more realistic idea of your total monthly payment than if you just looked at mortgage principal and interest.

    The average 30-year mortgage rate today is 6.47%. A 30-year term is the most popular type of mortgage because by spreading out your payments over 360 months, your monthly payment is lower than with a shorter-term loan.

    The average 15-year mortgage rate is 5.66% today. When deciding between a 15-year and a 30-year mortgage, consider your short-term versus long-term goals.

    A 15-year mortgage comes with a lower interest rate than a 30-year term. This is great in the long run because you’ll pay off your loan 15 years sooner, and that’s 15 fewer years for interest to accumulate. But the trade-off is that your monthly payment will be higher as you pay off the same amount in half the time.

    Let’s say you get a $300,000 mortgage. With a 30-year term and a 6.47% rate, your monthly payment toward the principal and interest would be about $1,890, and you’d pay $380,504 in interest over the life of your loan — on top of that original $300,000.

    If you get that same $300,000 mortgage with a 15-year term and a 5.66% rate, your monthly payment would jump to $2,477. But you’d only pay $145,823 in interest over the years.

    With a fixed-rate mortgage, your rate is locked in for the entire life of your loan. You will get a new rate if you refinance your mortgage, though.

    An adjustable-rate mortgage keeps your rate the same for a predetermined period of time. Then, the rate will go up or down depending on several factors, such as the economy and the maximum amount your rate can change according to your contract. For example, with a 7/1 ARM, your rate would be locked in for the first seven years, then change every year for the remaining 23 years of your term.

    Adjustable rates typically start lower than fixed rates, but once the initial rate-lock period ends, it’s possible your rate will go up. Lately, though, some fixed rates have been starting lower than adjustable rates. Talk to your lender about its rates before choosing one or the other.

    Dig deeper: Fixed-rate vs. adjustable-rate mortgages

    Mortgage lenders typically give the lowest mortgage rates to people with higher down payments, great or excellent credit scores, and low debt-to-income ratios. So, if you want a lower rate, try saving more, improving your credit score, or paying down some debt before you start shopping for homes.

    Waiting for rates to drop probably isn’t the best method to get the lowest mortgage rate right now. If you’re ready to buy, focusing on your personal finances is probably the best way to lower your rate.

    To find the best mortgage lender for your situation, apply for mortgage preapproval with three or four companies. Just be sure to apply to all of them within a short time frame — doing so will give you the most accurate comparisons and have less of an impact on your credit score.

    When choosing a lender, don’t just compare interest rates. Look at the mortgage annual percentage rate (APR) — this factors in the interest rate, any discount points, and fees. The APR, which is also expressed as a percentage, reflects the true annual cost of borrowing money. This is probably the most important number to look at when comparing mortgage lenders.

    Learn more: 6 tips for choosing a mortgage lender

    According to Zillow, the national average 30-year mortgage rate for purchasing a home is 6.47%, and the average 15-year mortgage rate is 5.66%. But these are national averages, so the average in your area could be different. Averages are typically higher in expensive parts of the U.S. and lower in less expensive areas.

    The average 30-year fixed mortgage rate is 6.47% right now, according to Zillow. However, you might get an even better rate with an excellent credit score, sizable down payment, and low debt-to-income ratio (DTI).

    Mortgage rates aren’t expected to drop drastically in the near future, though they might inch down here and there.

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  • Have An Adjustable-Rate Mortgage? What To Do Now

    Have An Adjustable-Rate Mortgage? What To Do Now

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    Mortgage rates have skyrocketed recently. If you have an adjustable-rate mortgage (ARM), you may be wondering what you need to do now to stay in your home affordably. Keep reading as we share things to consider to stay on track with your financial goals while staying in your home.

    How Long Is Your Mortgage Rate Guaranteed?

    Knowing how long you can keep your current mortgage payment is important when planning for the future. If you had recently refinanced your mortgage before rates started to rise, you may have some time before current mortgage rates hit your payments. On the other hand, if you only have a three-year ARM or purchased your mortgage a few years ago, a significant increase in your mortgage payment could be coming soon. The bottom line is to determine when your next mortgage rate adjustment will occur and mark your calendar.

    What Are The Terms Of Future Mortgage Rate Adjustments?

    Not all adjustable-rate mortgages are created equally. I’ve been reading the fine print on a few of my clients’ ARMs recently, and the terms have varied widely from bank to bank. Terms can vary from mortgage to mortgage with the same lending institution.

    One of my financial planning clients has a current mortgage rate of just 2.25%. In nine years, this rate could increase by a maximum of 2% per year, with a capped mortgage rate of 7.25%. These terms essentially give them three additional years of mortgage payments below current market rates. Nothing is pressing to change here.

    Another financial planning client of mine has a mortgage at 2.5%, with eight years left before rates could reset. Unfortunately, their mortgage allows for 5% per year increases, with no cap on the mortgage rate. This homeowner could be back at full market mortgage rates in eight years. They are still quite a way off, but the fine print of the adjustable-rate mortgage means they need to be a bit more proactive with a plan to make their mortgage payments in the future.

    Where Will Mortgage Rates Be In The Future?

    I don’t have a crystal ball, but today’s mortgage rates were right around the rate when I purchased my first home in 2007. At the time, that was about how low mortgage rates were. While I hope mortgage rates won’t jump up substantially higher than they are today, I would be shocked if they dropped back below 3% anytime soon. More to the financial planning point, I don’t think you’d like the state of the housing market and/or economy that would allow/cause rates to drop that low again. Remember the great financial crisis? Yeah, that wasn’t fun.

    Can You Refinance Your Mortgage To Lower Your Mortgage Payment?

    Extending the terms of your loan can help lower your monthly payments. For example, if you purchased your home with a 10 ARM, once your rates reset, you would have 20 years left on your mortgage. If you could refinance your mortgage, you would be able to amortize the remaining balance over a longer period. This would allow you to have a lower monthly payment. However, the lower monthly payment would mean paying more interest over the life of the loan. But, if this means you can avoid having to move or being severely house-poor, it could be worth it.

    Many people hate having a mortgage and always seem to be in a rush to pay off that debt entirely. Heck, I even have the urge in the back of my head to make extra mortgage payments every so often. If interest rates on your bank account are higher than your mortgage rate, you would likely be better off setting up a house payoff fund. Short version: you set up an investment account of a high-yield savings account with all the money you would have been putting towards paying down the mortgage. You will come out ahead if you can earn more on your investment or savings than your mortgage. This also gives you an extra cushion if you ever find yourself unemployed or needing to pay for some extensive home repair.

    Related: Should Your Rent Or Own Your Home In Retirement?

    Should You Marry The House And Date The Mortgage Rate?

    You may have heard the phrase “Marry the house, date the rate” from someone trying to get you to spend more on a house. This mindset only works if you can afford the house at the current mortgage payment. If rates drop in the future and you can lower your cost of home ownership with a refi, that is great. But you don’t want to struggle to make mortgage payments while praying for lower rates.

    This phrase is often accompanied by “When rates drop back to 2%, your home value will skyrocket.” Economically, this makes sense, but, and this is a huge deal, there is no guarantee of when or if rates will drop, let alone drop enough to cause a further surge in home prices.

    Homeownership can be great, but it can also be a huge pain. It is much more enjoyable when you can afford the home you live in. Don’t let your adjustable-rate mortgage derail your other financial goals.

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    David Rae, Contributor

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