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Mortgage rates have fallen this week, and the average 30-year fixed rate is now 6.95%. But overall, 30-year rates are still the highest they’ve been in 20 years, according to Freddie Mac.

Rates have moderated somewhat over the past two weeks after peaking in October. As the Federal Reserve struggles to control inflation, rates could fall further in 2023, but likely not to historic lows since 2020 and 2021.

The housing market has slowed significantly in recent months, with decades-high rates adding hundreds of dollars to the average monthly mortgage payment.

“Mortgage rates continue to hover around 7% as momentum from a once-warm housing market has waned significantly,” Sam Khater, chief economist at Freddie Mac, said in a statement. Press release. “Uncertain buyers navigating an unpredictable landscape are keeping demand down while other potential buyers stay away from an affordability perspective.”

Current Mortgage Rates

Type of mortgage Average rate today
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mortgage rates on Zillow

Current refinance rates

Type of mortgage Average rate today
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mortgage rates on Zillow

mortgage calculator

Use our free mortgage calculator to see the impact of today’s mortgage rates on your monthly payments. By plugging in different rates and terms, you’ll also understand how much you’ll pay over the life of your mortgage.

mortgage calculator

$1,161
Your estimated monthly payment

  • pay one 25% a higher down payment would save you $8,916.08 on interest charges
  • Lower the interest rate by 1% would save you $51,562.03
  • Pay an extra fee $500 each month would reduce the term of the loan by 146 month

Click “More Details” for tips on how to save money on your long-term mortgage.

30-year fixed mortgage rates

The current average 30-year fixed mortgage rate is 6.95%, according to Freddie Mac. This is a decrease from the previous week.

The 30-year fixed rate mortgage is the most common type of mortgage. With this type of mortgage, you’ll pay back what you borrowed over 30 years and your interest rate won’t change for the life of the loan.

The 30-year long term allows you to spread your payments out over a long period, which means you can keep your monthly payments lower and more manageable. The tradeoff is that you’ll get a higher rate than with shorter terms or adjustable rates.

15-year fixed mortgage rates

The average 15-year fixed mortgage rate is 6.29%, down from the previous week, according to data from Freddie Mac. The last time this rate was above 6% was in 2008.

If you’re looking for the predictability that comes with a fixed rate, but are looking to spend less on interest over the life of your loan, a 15-year fixed rate mortgage might be right for you. Since these terms are shorter and have lower rates than 30-year fixed rate mortgages, you could potentially save tens of thousands of dollars in interest. However, you will have a higher monthly payment than you would with a longer term.

5/1 Adjustable Mortgage Rates

The average 5/1 adjustable mortgage rate is 5.95%, a very slight drop from the previous week.

Adjustable Rate Mortgages can seem very attractive to borrowers when rates are high, as rates on these mortgages are generally lower than fixed mortgage rates. A ARM 5/1 is a 30 year mortgage. For the first five years, you will have a fixed rate. After that, your rate will adjust once a year. If rates are higher when your rate adjusts, you’ll have a higher monthly payment than you started with.

If you’re considering an ARM, make sure you understand how much your rate might increase each time it adjusts and how much it might ultimately increase over the life of the loan.

Should I get a HELOC? Advantages and disadvantages

If you’re looking to tap into the equity in your home, a HELOC might be the best way to do it now. Unlike a cash refinanceyou won’t have to get a whole new mortgage with a new interest rate, and you’ll probably get a better rate than with a home equity loan.

But HELOCs don’t always make sense. It is important to consider the advantages and disadvantages.

HELOC Benefits

  • Only pay interest on what you borrow
  • They usually have lower rates than alternatives, including home equity loans, personal loans and credit cards
  • If you have a lot of equity, you could potentially borrow more than you could get with a personal loan.

Against HELOC

  • Rates are variable, which means your monthly payments could increase
  • Withdrawing equity from your home can be risky if the value of the property drops or you fail to repay the loan
  • The minimum withdrawal amount may be more than you wish to borrow

Are mortgage rates increasing?

Mortgage rates started to recover from historic lows in the second half of 2021 and have risen significantly so far in 2022.

In the past 12 months, the consumer price index increased by 8.2%. The Federal Reserve has been struggling to keep inflation in check and is expected to raise the target federal funds rate two more times this year, following increases at its past five meetings.

Although not directly tied to the fed funds rate, mortgage rates are sometimes pushed higher due to Fed rate hikes and investors’ expectations of the impact of those hikes on the economy. .

Inflation remains high, but has started to slow, which is a good sign for mortgage rates and the economy in general.

How can I find personalized mortgage rates?

Some mortgage lenders allow you to customize your mortgage rate on their websites by entering your down payment amount, zip code and credit score. The resulting rate is not fixed, but it can give you an idea of ​​what you will pay.

If you’re ready to start shopping for homes, you can apply for pre-approval with a lender. The lender makes a firm credit application and reviews your financial details to lock in a mortgage rate.

How to compare mortgage rates between lenders?

You can apply for pre-qualification with multiple lenders. A lender takes a general look at your finances and gives you an estimate of the rate you will pay.

If you are further along in the home buying process, you have the option of apply for pre-approval with multiple lenders, not a single company. By receiving letters from more than one lender, you can compare personalized rates.

The pre-approval request requires a firm credit application. Try to apply to multiple lenders within a few weeks, because consolidating all your hard credits in the same amount of time will hurt your credit score less.