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Mortgage and refinance rates today, September 17, 2024: Rates fall before the Fed meeting

Laura Grace Tarpley
·Lead Editor and Content Strategist, Mortgages
5 min read

Mortgage and refinance rates are down across the board today. According to Zillow data, the national average 30-year mortgage rate is down nine basis points to 5.60%, and the 15-year mortgage rate has decreased by nine basis points to 4.90%.

Tomorrow, the Federal Reserve is expected to announce its first cut to the federal funds rate since 2020. It's still up in the air as to whether the Fed will slash the rate by 25 or 50 basis points. If it chooses 25 points, then we probably won't immediately see any dramatic mortgage rate drops — most of the decreases will have already occurred in the past few weeks in anticipation of this meeting. But if the central bank announces a 50-basis-point decrease, mortgage rates could drop more noticeably.

Another possibility is that the Fed will only drop the fed funds rate by 25 basis points but will indicate that it will cut the rate a second time in 2024, which has not been a serious consideration until recently. If people expect the Fed to cut rates again soon, mortgage rates could continue to fall.

Learn more: How the Federal Reserve impacts mortgage rates

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

  • 30-year fixed: 5.60%

  • 20-year fixed: 5.42%

  • 15-year fixed: 4.90%

  • 5/1 ARM:5.90%

  • 7/1 ARM: 5.99% 5.80%

  • 30-year FHA: 4.66%

  • 15-year FHA: 4.25%

  • 5/1 FHA: 4.69%

  • 30-year VA: 5.06%

  • 15-year VA: 4.79%

  • 5/1 VA:5.55%

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

Dig deeper: Is it a good time to buy a house?

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

  • 30-year fixed: 5.58%

  • 20-year fixed: 5.32%

  • 15-year fixed: 4.77%

  • 5/1 ARM: 5.93%

  • 7/1 ARM: 5.93%

  • 5/1 FHA: 4.54%

  • 30-year VA: 5.03%

  • 15-year VA: 4.81%

  • 5/1 VA: 5.03%

Again, the numbers provided are national averages rounded to the nearest hundredth. Refinance rates are usually higher than purchase rates, but they're lower than or similar to today's purchase rates, so it may be a good time to refinance your mortgage.

A mortgage calculator can help you see how various mortgage term lengths and interest rates will affect your monthly payments. Use the free Yahoo Finance mortgage calculator to play around with different outcomes.

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

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

For example, with a $400,000 mortgage with a 30-year term and a 5.60% rate, you'll make a monthly payment of about $2,296 toward your mortgage principal and interest. As interest accumulates over decades, you’ll end up paying $426,674 in interest.

If you get a $400,000 15-year mortgage with a 4.90% rate, you’ll pay about $3,142 monthly toward your principal and interest. However, you’ll only pay $165,628 in interest over the years.

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

With a fixed-rate mortgage, your rate is locked in from day one. However, you will get a new rate if you refinance your mortgage.

An adjustable-rate mortgage keeps your rate the same for a set 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 remainder of your term.

Adjustable rates sometimes start lower than fixed rates, but once the initial rate-lock period ends, you risk your interest rate going up. Fixed rates are also starting lower than adjustable rates right now.

Dig deeper: Adjustable-rate vs. fixed-rate mortgage — Which should you choose?

Mortgage rates have been trending downward for weeks. They may decrease more in 2024, and they'll likely inch down throughout 2025.

The trajectory of future mortgage rates will largely depend on the Federal Reserve’s decisions about when to cut the federal funds rate at upcoming meetings (and by how much). The federal funds rate doesn’t directly impact mortgage rates, but it is a good indicator of how the economy is doing overall. So when the Fed rate drops, mortgage rates typically go down too. The next Federal Reserve announcement will be tomorrow, Sept. 18, but anticipation of a cut is already causing rates to trend downward gradually. For now, we wait to see whether the Fed will slash the rate by 25 or 50 basis points.

Read more: When will mortgage rates go down? A look at 2024 and 2025.

According to Zillow data, today's average 30-year fixed rate is 5.60%, and the 30-year refinance rate is 5.58%. These are the national averages, so keep in mind the average in your state or city could be different. Your rate will also vary depending on your personal finances.

Mortgage rates have already dropped over the last couple of weeks. However, if the Fed keeps cutting the federal funds rate, mortgage rates will probably keep decreasing later in 2024 and into 2025.

Mortgage rates will likely continue to inch down in 2024, then more significantly in 2025.