Mortgage rates this week were largely flat, but an important rate declined. Average 15-year fixed mortgage rates increased a little, while average 30-year fixed mortgage rates slumped. At the same time, average rates for 5/1 adjustable-rate mortgages went up slightly.
Mortgage rates increased dramatically in 2022, as the Federal Reserve hiked interest rates repeatedly throughout the year. Interest rates are dynamic and unpredictable — at least on a daily or weekly basis — and they respond to a wide variety of economic factors. But the Fed’s actions, designed to mitigate the high rate of inflation, had an unmistakable impact on mortgage rates.
The outlook for 2023 remains uncertain. Though higher rates are likely here to stay, the biggest increases may be behind us. That noted, trying to time the market is tricky. If inflation persists, more interest rate hikes could follow. As such, you may have better luck locking in a lower mortgage interest rate now instead of waiting; after all, you can always refinance later on. No matter when you decide to shop for a home, it’s always a good idea to seek out multiple lenders to compare rates and fees to find the best mortgage for your specific situation.
30-year fixed-rate mortgages
The average 30-year fixed mortgage interest rate is 6.36%, which is a decline of 7 basis points compared to one week ago. (A basis point is equivalent to 0.01%.) The most frequently used loan term is a 30-year fixed mortgage. A 30-year fixed mortgage will often have a higher interest rate than a 15-year fixed rate mortgage — but also a lower monthly payment. You won’t be able to pay off your house as quickly and you’ll pay more interest over time, but a 30-year fixed mortgage is a good option if you’re looking to minimize your monthly payment.
15-year fixed-rate mortgages
The average rate for a 15-year, fixed mortgage is 5.66%, which is an increase of 1 basis point from seven days ago. You’ll definitely have a higher monthly payment with a 15-year fixed mortgage compared to a 30-year fixed mortgage, even if the interest rate and loan amount are the same. However, if you can afford the monthly payments, there are several benefits to a 15-year loan. You’ll most likely get a lower interest rate, and you’ll pay less interest in total because you’re paying off your mortgage much quicker.
5/1 adjustable-rate mortgages
A 5/1 adjustable-rate mortgage has an average rate of 5.43%, an increase of 1 basis point compared to last week. With an adjustable-rate mortgage mortgage, you’ll usually get a lower interest rate than a 30-year fixed mortgage for the first five years. But you may end up paying more after that time, depending on the terms of your loan and how the rate shifts with the market rate. Because of this, an adjustable-rate mortgage might be a good option if you plan to sell or refinance your house before the rate changes. But if that’s not the case, you may be on the hook for a much higher interest rate if the market rates change.
Mortgage rate trends
Mortgage rates were historically low at the beginning of 2022 but climbed steadily throughout the year. The Federal Reserve raised interest rates seven times in an attempt to curb record-high inflation. As a general rule, when inflation is low, mortgage rates tend to be lower. When inflation is high, rates tend to be higher.
Though the Fed does not directly set mortgage rates, the central bank’s policy actions influence how much you pay to finance your home loan. If you’re looking to buy a house, keep in mind that the Fed has signaled it will continue to raise rates in 2023, and that those increases may drive mortgage rates even higher.
We use data collected by Bankrate, which is owned by the same parent company as CNET, to track daily mortgage rate trends. This table summarizes the average rates offered by lenders across the US:
Average mortgage interest rates
| Product | Rate | Last week | Change |
|---|---|---|---|
| 30-year fixed | 6.36% | 6.43% | -0.07 |
| 15-year fixed | 5.66% | 5.65% | +0.01 |
| 30-year jumbo mortgage rate | 6.35% | 6.44% | -0.09 |
| 30-year mortgage refinance rate | 6.41% | 6.47% | -0.06 |
Rates as of Feb. 2, 2023.
How to find personalized mortgage rates
When you are ready to apply for a loan, you can reach out to a local mortgage broker or search online. When looking into home mortgage rates, think about your goals and current finances.
A range of factors — including your down payment, credit score, loan-to-value ratio and debt-to-income ratio — will all affect the interest rate on your mortgage. Having a higher credit score, a larger down payment, a low DTI, a low LTV or any combination of those factors can help you get a lower interest rate.
Besides the interest rate, additional costs including closing costs, fees, discount points and taxes might also affect the cost of your home. Make sure to shop around with multiple lenders — including credit unions and online lenders in addition to local and national banks — in order to get a mortgage that works best for you.
How does the loan term impact my mortgage?
One important thing to keep in mind when choosing a mortgage is the loan term, or payment schedule. The loan terms most commonly offered are 15 years and 30 years, although you can also find 10-, 20- and 40-year mortgages. Mortgages are further divided into fixed-rate and adjustable-rate mortgages. The interest rates in a fixed-rate mortgage are set for the duration of the loan. For adjustable-rate mortgages, interest rates are set for a certain number of years (usually five, seven or 10 years), then the rate changes annually based on the market interest rate.
When choosing between a fixed-rate and adjustable-rate mortgage, you should consider how long you plan to live in your home. Fixed-rate mortgages might be a better fit for those who plan on staying in a home for quite some time. Fixed-rate mortgages offer more stability over time compared to adjustable-rate mortgages, but adjustable-rate mortgages might offer lower interest rates upfront. If you aren’t planning to keep your new home for more than three to 10 years, however, an adjustable-rate mortgage may give you a better deal. There is no best loan term as a rule of thumb; it all depends on your goals and your current financial situation. Make sure to do your research and know what’s most important to you when choosing a mortgage.
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