Today's Mortgage Rates - 02/09/2025

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Mortgage Rates Ease Into February

The quiet downturn in mortgage rates continued this week.

As reported by Freddie Mac today, the average offered interest rate for a conforming 30-year fixed-rate mortgage (FRM) declined by six basis points (0.06%) this week, easing to 6.89%. Over the last three weeks, the cumulative decline seen here is now a little more than an eighth of a percentage point.

Average offered rates for 15-year fixed-rate mortgages managed a slightly larger decrease, falling by seven basis points (0.07%) to 6.05%. The 22 basis point decline over the last few weeks has left the most popular short-term mortgage at its lowest point since the end of December.

A 5/1 ARM might offer a homebuyer a lower-cost alternative to a long-term fixed-rate mortgage, and the difference in rate between 30-year FRMs and 5/1 ARMs improved quite a bit this week. The Mortgage Bankers Association said that the initial fixed interest rate on a hybrid 5/1 ARM declined by thirty-seven basis points (0.37%), falling to 6.07%. Even with the slight downward move by its long-term fixed-rate cousin, this widened the gap in rate back to eighty-two basis points (0.82%). This better-than-three-quarter percentage-point gulf should be considerable enough to entice some winter homebuyers to select an ARM as their choice of financing, as there may be some savings to be had by doing so.

One of the factors that has helped lift long-term rates and keep them elevated for several months is investor concern regarding wide the government budget deficit and how much new debt will need to be issued to finance it. Large supplies of bonds often require higher yields to entice investors to absorb them. That said, the Treasury recently announced that they didn't expect to be increasing the size of planned debt offerings or their mix for at least the next few quarters, and this seemed to allay fears of excessive supply, at least for now. In turn, this helped bond yields to retreat somewhat, and mortgage rates have followed along.

That said, those yields aren't going very far and are in no specific hurry to get there. With this in mind, it looks as though we'll see fairly stable mortgage rates in the market over the next few days.

Each week in HSH's MarketTrends newsletter, we track and discuss economic conditions that affect mortgage rates and their impact on housing markets and consumers. Read the most recent edition of MarketTrends or subscribe for email delivery.

Week 30-year-Fixed 15-year-Fixed
02/06 6.890% 6.050%
01/30 6.950% 6.120%
01/23 6.960% 6.160%
01/16 7.040% 6.270%
01/09 6.930% 6.140%
01/02 6.910% 6.130%
12/26 6.850% 6.000%
12/19 6.720% 5.920%
12/12 6.600% 5.840%
12/05 6.690% 5.960%
11/27 6.810% 6.100%
11/21 6.840% 6.020%

Mortgage Choices at a Glance

Loan type/terms Fixed 30 years Fixed 15 years/
20 Years
Hybrid ARM Traditional ARM Balloon Mortgage
Rate changes
  • Never; Fully fixed for entire term
  • Never; Fully fixed for entire term
  • Usually after fixed period of 3, 5, 7 or 10 years
  • After that, annual change typical
  • Fully variable
  • Typically changing at one-year intervals
  • Some have shorter change intervals
  • Never; Fully fixed for entire term
Benefits
  • Low, stable payment
  • Usually easiest qualification
  • Stable payments
  • Builds equity faster
  • Lower total interest costs than 30-year term
  • Lower rates than fully fixed-rate mortgage
  • Can sometimes borrow larger loan amount for same income
  • Can have lowest interest rates
  • Qualification may not depend upon today's interest rate
  • Often has lower interest rate/monthly payment over balloon period than fixed rate
  • Similar to hybrid ARM
Drawbacks/Risks
  • Can have highest total interest cost over time
  • User may "buy" more rate stability than actually needed, increasing cost
  • Requires higher income to qualify
  • Less affordable monthly payment
  • Funds commited to payment cannot be used elsewhere
  • Stable payment for a number of years, then unpredictable
  • Rates can jump by as much as 6 percentage points at first adjustment
  • Payments fluctuate at each rate change
  • Unpredictable, rates can change as much as 2 percentage points at each adjustment
  • Loan fully due and payable when balloon period ends
  • Must be paid off or refinanced in unknown market conditions
Alternative strategy
  • Consider Hybrid ARM with appropriate fixed period
  • Consider 30-year term and prepaying loan to preserve cash-flow flexibility
  • Consider Fixed rate mortgage or longest possible fixed period, if loan hold period not known
  • Consider Hybrid ARM to ameliorate rate and payment risks for a given period
  • Consider Hybrid ARM to ensure continued loan availability
These may be useful for...
  • Purchasing a home
  • First-time homebuyers
  • Refinancing to improve cash flow/lower payment
  • Refinancing to lower total interest cost
  • Retiring mortgage more quickly
  • Building or rebuilding equity more quickly
  • Purchasing or refinancing when time horizon is seven years or shorter, and where borrower can handle increase in monthly payments
  • Purchasing or refinancing when interest rates are near top of cycle, and are likely to fall, or sale or refinance is anticipated within three years
  • Purchasing or refinancing when time horizon is three years or longer and home will be sold prior to end of balloon period
Consider if
  • Buying or refinancing a home and planning on owning for longer than 10 years
  • Buying second home
  • Refinancing to build equity
  • Paying off mortgage before life event (retirement, etc)
  • Buying a home and expect to move before fixed period ends, or know income will rise to offset payment risk, even in worst-case scenario
  • Buying or refinancing when income can handle frequent payment changes and worst-case scenario for rates over a four-year period
  • Buying a home and expect to move before balloon period ends, or have resources to pay off mortgage if refinance not available
When shopping, ask about
  • "Full cost" vs. "No cost" refinances, prepaying loan to shorten term if desired
  • If 20-year term makes payment too high, whether 25-year term is available
  • Interest rate caps, for first and subsequent adjustments, worst-case scenario
  • A history of the Index the loan is keyed off, margin and caps
  • Whether or not there is any built-in refinancing option when the balloon period ends
Useful tools & resources

Latest Mortgage Rate Analysis

HSH's longer-range outlook for mortgage rates, where we review our last forecast,discuss current market influences and provide our expectations for mortgage rates over the next nine weeks.

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