The average interest rate for a standard 30-year fixed mortgage is 7.01% today, down -0.04% from a week ago. The average rate for a 15-year fixed mortgage is 6.45%, down -0.12% from a week ago. For an overview of how mortgage rates are trending, see the chart below.
The Federal Reserve delayed cutting interest rates because inflation was slow to improve. Although experts still expect mortgage rates to gradually decline over the coming months, housing market forecasts can always change in response to economic data, geopolitical events and more.
Today’s Average Mortgage Rates
Mortgage
Refinance
A drop in mortgage rates may finally be on the way. To get the best rate, experts advise comparing loan offers from at least three different mortgage lenders. You can get a personalized quote from one of CNET’s partner lenders by entering your information below.
About these prices: Like CNET, Bankrate is owned by Red Ventures. This tool offers partner rates from lenders that you can use to compare multiple mortgage rates.
What is a good mortgage type and term?
Every mortgage has a loan term or payment schedule. The most common mortgage terms are 15 and 30 years, although 10, 20 and 40 year mortgages are also available. With a fixed rate mortgage, the interest rate is fixed for the life of the loan, providing stability. With an adjustable-rate mortgage, the interest rate is only fixed for a certain period of time (usually five, seven, or 10 years), after which the rate adjusts annually based on the market. Fixed-rate mortgages are a better option if you plan to live in a home long-term, but adjustable-rate mortgages can offer lower interest rates up front.
30-year fixed rate mortgages
For a 30-year fixed-rate mortgage, the average rate you’ll pay today is 7.01%. A 30-year fixed mortgage is the most common loan term. Its interest rate will often be higher than a 15-year mortgage, but your monthly payments will be lower.
15-year fixed rate mortgages
Today, the average rate for a 15-year fixed mortgage is 6.45%. Although you will have a higher monthly payment than a 30-year fixed mortgage, a 15-year loan generally has a lower interest rate, meaning you pay less interest in the long term. and pay off your mortgage sooner.
5/1 Adjustable Rate Mortgages
A 5/1 adjustable rate mortgage today has an average rate of 6.61%. You’ll typically get a lower introductory interest rate with a 5/1 ARM during the first five years of the mortgage. But you could pay more after that period, depending on how the rate adjusts each year. If you plan to sell or refinance your home within five years, an ARM might be a good option.
Current Mortgage Rate Trends
At the start of the pandemic, mortgage rates were near their lowest levels, around 3%. That all changed when inflation began to rise and the Federal Reserve launched a series of aggressive interest rate hikes starting in March 2022 to slow the economy, which indirectly drove up mortgage rates.
Today, more than two years later, mortgage rates are still around 7%. In recent months, mortgage rates have fluctuated based on economic data and investors’ expectations of when the Fed would begin lowering rates.
Today’s buyers have less room in their budget to afford the cost of a home due to high mortgage rates and high home prices. Limited housing inventory and weak wage growth are also contributing to the affordability crisis and keeping demand for mortgages low.
When will mortgage rates drop?
Most experts predict that mortgage rates will fall below 7% in the coming months. However, a sustained downward trend will depend on several factors, including upcoming inflation and employment data.
The Fed hasn’t raised interest rates in almost a year, but a real rate cut doesn’t appear imminent. Some experts say the first cut could happen as early as July, but it’s more likely the Fed will cut rates in September or November.
“If the Fed takes action later this year, there would be enough of a signal to the mortgage market and mortgage rates would start to fall,” said Selma Hepp, chief economist at CoreLogic. “In this case, we could see mortgage rates around 6.5% at the end of the year. »
One thing is certain: Homebuyers won’t see their mortgages drop overnight, and a return to the 2-3% mortgage rates of just a few years ago is unlikely.
Here’s a look at where some major housing authorities expect average mortgage rates to land.
Calculate your monthly mortgage payment
Getting a mortgage should always depend on your financial situation and long-term goals. The most important thing is to make a budget and try to stay within your means. CNET’s mortgage calculator below can help buyers prepare for monthly mortgage payments.
How can I get the lowest mortgage rates?
Even though mortgage rates and housing prices are high, the housing market won’t be unaffordable forever. It’s always a good time to save for a down payment and improve your credit score to help you get a competitive mortgage rate when the time comes.
- Save for a bigger down payment: Although a 20% down payment is not required, a larger down payment means taking out a smaller mortgage, which will help you save on interest.
- Boost your credit score: You may qualify for a conventional mortgage with a credit score of 620, but a higher credit score of at least 740 will get you better rates.
- Pay off debt: Experts recommend a debt-to-income ratio of 36% or less to help you get the best rates. Not having other debt will put you in a better position to manage your monthly payments.
- Loans and research aid: Government loans have more flexible borrowing terms than conventional loans. Some government or private programs can also help cover your down payment and closing costs.
- Research lenders: Researching and comparing multiple loan offers from different lenders can help you get the lowest mortgage rate for your situation.