How can you find a good deal in a high-end environment?

Mortgage rates continue to rise. According to Zillow, the national average 30-year fixed mortgage rate increased by six basis points. 6.78%And today’s 15-year fixed interest rate has reached three points 6.07%.

The economic outlook for Q1 2025 doesn’t look like mortgage rates will fall anytime soon. So, what can you do to get the lowest interest rate in a high rate environment? First, look for ways to improve your finances – improve your credit score, pay off debts and save more for a down payment. Second, shop around with several mortgage lenders. Find the type of mortgage loan you need, one that offers great rates and low fees.

Dig deep; 5 strategies to get the lowest mortgage rate

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

• 30 years fixed; 6.78%

• 20 years fixed; 6.55%

• 15 years fixed; 6.07%

• 5/1 Arm: 7.16%

• 7/1 Arm: 7.08%

• 30-year VA: 6.20%

• 15-year VA: 5.68%

• 5/1 VA: 6.36%

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

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

• 30 years fixed; 6.84%

• 20 years fixed; 6.66%

• 15 years fixed; 6.15%

• 5/1 Arm: 7.50%

• 7/1 Arm: 7.44%

• 30-year VA: 6.13%

• 15-year VA: 5.86%

• 5/1 VA: 6.05%

Again, the numbers presented are national averages rounded to the nearest hundred. The cost of a mortgage modification is often higher than the cost of buying a home, although that’s not always the case.

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

Use Yahoo Finance’s free mortgage calculator to see how different mortgage terms and interest rates will affect your monthly payments.

Our calculator takes into account things like property taxes and homeowners insurance when determining your estimated monthly mortgage payment. This will give you a more accurate idea of ​​your total monthly payment than if you just looked at the mortgage principal and interest.

The average 30-year mortgage rate today is 6.78 percent. The 30-year term is the most popular type of mortgage because it spreads your payments over 360 months and the monthly payment is lower than a short-term loan.

The average 15-year mortgage rate today is 6.07%. When deciding between a 15-year and a 30-year mortgage, consider your short-term and long-term goals.

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

Let’s say you get a $300,000 loan. With a 30-year term and a rate of 6.78%, the monthly payment for principal and interest 1,952 dollarsAnd you pay 402,641 dollars Interest over the life of your loan – $300,000 more than the principal.

If you get the same $300,000 mortgage but with a 15-year term and a 6.07% rate, your monthly payment will go up. 2,543 dollars. But you only pay 157,727 dollars with interest for years.

With a fixed-rate mortgage, your rate is locked in for the life of your loan. If you refinance your mortgage, you’ll get a new rate.

An adjustable-rate mortgage keeps your rate fixed for a predetermined period of time. Then, the rate will increase or decrease depending on the economy and the maximum amount that your rate can change under your contract. For example, with a 7/1 ARM, your rate is locked in for the first seven years, then changes annually for the remaining 23 years of your term.

Adjustable rates start lower than fixed rates, but if the initial rate lock-in period expires, your rate may go up. More recently, however, some fixed rates start lower than adjustable rates. Talk to your lender about the stories before choosing one or the other.

Dig deep; Fixed-rate and adjustable-rate loans

Mortgage lenders often offer the lowest mortgage rates to people with higher down payments, excellent or excellent credit scores, and lower debt-to-income ratios. So, if you want a lower rate, try to save more, improve your credit score, or pay off some debt before you start shopping for homes.

Waiting for rates to drop is probably not the best way to get the lowest mortgage rate unless you are in no rush and plan to wait until the end of 2025. If you’re ready to buy, focus on your personal finances. It is probably the best way to reduce your size.

Apply for a mortgage pre-approval with three or four companies to find the best mortgage lender for your situation. Be sure to apply them all in a short period of time – doing so will give you the most accurate comparison and have the least impact on your credit score.

When choosing a lender, don’t just compare interest rates. Look at the mortgage’s annual percentage rate (APR) – these include the interest rate, any discount points and fees. APR, also expressed as a percentage, reflects the actual annual cost of borrowing money. This is probably the most important number when comparing mortgage lenders.

According to Zillow, the national average 30-year mortgage rate is 6.78%, and the average 15-year mortgage rate is 6.07%. But these are national averages, so the average in your area may be different. Averages are generally higher in more expensive parts of the US and lower in less expensive areas.

According to Zillow, the average 30-year fixed mortgage rate is now 6.78%. However, with an excellent credit score, a high down payment, and a low debt-to-income ratio (DTI), you can get an even better rate.

Although it may drop an inch here and there, mortgage rates aren’t expected to drop significantly anytime soon.