Mortgage rates have fallen to their lowest point in more than a year, with the latest report from the Primary Mortgage Market Survey showing the average for a 30-year fixed-rate mortgage is 6.15 percent.
A buyer in the market for a new home could save a considerable amount of money on their monthly mortgage payment, compared to what they would’ve paid in January 2025, when rates rose past 7 percent.
If rates continue to fall as they have, then it’s possible we could see rates go under 6 percent this year. However, it’s not a guarantee, said Sarah DeFlorio, vice president of mortgage banking at William Raveis Mortgage.
“Currently, the average 30-year fixed is sitting a little above 6% – the good news is that rates have remained relatively stable over the past year, even in the face of major economic, data, and political situations that could lead to volatility,” she told The Independent in an email. “The bad news is that rates are not going to drop as much or as quickly as everyone wants.”
That being said, DeFlorio pointed out that some homebuyers with the right mix of factors, such as good credit and a low debt-to-income ratio, might already be able to get rates below 6 percent.
What would that mean for those who are planning to purchase a house this spring (the most popular home-buying season)? Valuable savings in the short- and long-term.
Even a slight drop could save you $40,000
A homebuyer’s monthly payment could be notably lower, even if mortgage rates drop less than 0.35 percentage points by the spring.
The following chart shows mortgage payments across various interest rates below 6 percent, and at today’s rate of 6.15 percent, along with the total interest paid over the life of the mortgage.
The figures are based on a 30-year fixed-rate mortgage and a 3.5 percent down payment for a home at $512,800, the latest average home sales price published by the Federal Reserve.
|
Interest rate |
Monthly payment |
Total interest paid |
|---|---|---|
|
6.15% |
$3,014.78 |
$590,467.98 |
|
5.99% |
$2,963.71 |
$572,082.53 |
|
5.95% |
$2,951.00 |
$567,507.64 |
|
5.90% |
$2,935.15 |
$561,801.23 |
|
5.85% |
$2,919.33 |
$556,108.42 |
|
5.80% |
$2,903.56 |
$550,429.29 |
If rates were to drop to 5.8 percent by the time you bought a home in the spring, your monthly payment would be around $111 lower than if you had today’s rate of 6.15 percent.
Additionally, you’d save more than $40,000 in total interest paid over the life of your mortgage. If rates fell to 5.95 percent, your monthly payment would drop more than $63, and you’d save nearly $23,000 in total interest payments over the life of your loan.
Keep in mind, though, that homes tend to be more expensive in the spring because more people are buying.
“The largest share of sellers tend to list their homes for sale in the spring, starting in March and peaking in late May and early June,” home listing site Zillow noted.
“The timing coincides with the largest influx of buyers, many of whom are trying to time their move for summer when their kids are out of school. The combination of more sellers and more buyers makes the spring the busiest time in real estate.”