As of February 1, 2025, mortgage rates are hovering in the mid-6% range, providing potential homebuyers and those looking to refinance with a clearer picture of what to expect in today’s market. With current rates at 6.59% for a 30-year fixed mortgage and 5.89% for a 15-year fixed mortgage, now may be a strategic time for many to act, even as inflation remains a critical economic factor.
Today’s Mortgage Rates February 1, 2025: Rates Drop Again
Key Takeaways

Current Average Rates:

30-year fixed: 6.59%
15-year fixed: 5.89%
30-year FHA: 6.29%
30-year VA: 6.06%

Inflation Impact: Elevated inflation makes significant rate drops less likely in the near future.
Loan Types:

Fixed-rate mortgages remain popular for their predictability.
Adjustable-rate mortgages (ARMs) tend to have lower initial rates but come with risks of future increases.

Refinancing: Similar trends in refinance rates, making it potentially beneficial for homeowners considering lower monthly payments.
Economic Outlook: Future rate movements will depend on upcoming inflation data and the Federal Reserve’s monetary policy decisions.

Understanding Today’s Mortgage Rates
Mortgage rates play a crucial role in the home buying process. Understanding them is critical for making informed financial decisions. As we step into February 2025, let’s break down the current rates and what they mean for potential homebuyers and homeowners looking to refinance.
Current Mortgage Rates Breakdown
According to recent data by Zillow, today’s average mortgage rates are as follows:

Mortgage Type
Average Rate Today

30-Year Fixed
6.59%

20-Year Fixed
6.51%

15-Year Fixed
5.89%

7-Year ARM
6.76%

5-Year ARM
6.67%

30-Year FHA
6.29%

30-Year VA
6.06%

This downward trend in mortgage rates is a sign of modest relief for homebuyers, albeit with caveats. The Federal Reserve’s recent decision to pause rate cuts coupled with an uptick in inflation indicates that rates may not drop significantly in the future.
Impact of Inflation on Mortgage Rates
The inflation rate, particularly as measured by the Personal Consumption Expenditures (PCE) price index, is a key factor influencing mortgage rates. Recently, the PCE index saw a year-over-year increase of 2.6%, suggesting persistent inflationary pressures. This indicates that while current rates are in the mid-6% range, future decreases may be limited unless inflation eases significantly.
As observed in the data from various sources, including the Federal Reserve and the Zillow report, the interplay between inflation and mortgage rates is essential for understanding the overall cost of borrowing.
Monthly Payment Calculations
Knowing today’s mortgage rates helps in understanding what your monthly payments will look like based on the amount you’re borrowing. Below, we examine monthly payments for different mortgage amounts at today’s average 30-year fixed rate of 6.59%.
Monthly Payment on $150,000 Mortgage
For a $150,000 mortgage:

Monthly Payment: $956.29

Monthly Payment on $200,000 Mortgage
For a $200,000 mortgage:

Monthly Payment: $1,275.05

Monthly Payment on $300,000 Mortgage
For a $300,000 mortgage:

Monthly Payment: $1,912.58

Monthly Payment on $400,000 Mortgage
For a $400,000 mortgage:

Monthly Payment: $2,550.11

Monthly Payment on $500,000 Mortgage
For a $500,000 mortgage:

Monthly Payment: $3,187.64

These calculations assume a 30-year fixed mortgage with a 6.59% interest rate, providing a clear picture of how much each payment plan affects affordability.

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Types of Mortgages Available
Understanding the different types of mortgages available can also aid borrowers in making the right choices based on their financial goals.

Fixed-Rate Mortgages: These are the most common loans, where the interest rate remains constant throughout the life of the loan. While they typically offer higher rates than ARMs, they provide stability and predictability in monthly payments.
Adjustable-Rate Mortgages (ARMs): Although less common, ARMs can offer lower initial rates that may lead to lower monthly payments. However, they come with the risk of rate adjustments after the initial period which can increase future payments significantly.
FHA and VA Loans: Government-backed loans like FHA and VA loans tend to have lower average rates and are more accessible to first-time homebuyers or veterans. For example, the current rate for 30-year FHA loans is 6.29%, while 30-year VA loans sit at 6.06%.

Final Thoughts
Navigating the world of mortgage rates can feel overwhelming, but having clear and concise information is crucial. With rates settling in the mid-6% range, prospective homeowners have the opportunity to secure loans before any potential inflation repercussions may drive rates back up. A deep understanding of these rates, combined with knowledge of the types of loans available, will empower you to make informed decisions in today’s housing market.
Understanding the nuances behind these rates and their potential movement can fundamentally alter your experience as a buyer or a homeowner looking to refinance. As we progress through the year, monitoring the economic indicators that influence these rates will be more important than ever.

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Today’s Mortgage Rates February 1, 2025: Rates Drop Again
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