15-year fixed mortgage rate starts new year at all-time low

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The average rate on a 15-year fixed mortgage fell to 2.37 percent this week, matching its previous record from Dec. 23, 2020.

Experts have predicted that low mortgage rates will only stick around for a little while longer, and they’re likely to start climbing back up again later this year.

Shorter loan terms are likely to remain more popular with borrowers, though, for as long as stay near this rock bottom. Shorter loans are cheaper because they usually have lower interest rates to begin with, and give that interest less time to compound. They can be a squeeze for some borrower’s budgets though, because the shorter repayment period also usually means higher monthly charges compared to longer-term loans.

Many mortgage experts told Bankrate they expect interest rates to rise in the coming week.

“It looks like both of the Georgia Senate runoff races will go to the Democrats, giving the Democrats both houses of Congress and the presidency,” Michael Becker, a branch manager at Sierra Pacific Mortgage in White Marsh, Maryland, said in our weekly poll. “Because of this additional stimulus will likely pass in the coming months. This will add to the deficit and require additional Treasury issuance. That added supply of Treasurys will put upward pressure on yields. As markets digest this I expect this to lead to higher mortgage rates in the coming week.”

If you’re thinking about getting a new mortgage or refinancing your existing one, it could be a great time to crunch the numbers and see if you can boost your long-term savings by getting a shorter-term loan. Just remember to take a long view though. Your monthly payments will remain high until the debt is gone, and you don’t want to max out your monthly budget just to save on interest.

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Written by
Zach Wichter
Mortgage reporter
Zach Wichter is a mortgage reporter at Bankrate. He previously worked on the Business desk at The New York Times where he won a Loeb Award for breaking news, and covered aviation for The Points Guy.
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