Current Mortgage Rates for Jan. 16, 2023: Price Slides

A few key mortgage rates fell today. Average interest rates for 15-year and 30-year fixed-term mortgages fell. For variable rates, the 5/1 adjustable-rate mortgage was scored below.

Mortgage rates are set to rise sharply in 2022, as the Federal Reserve continues to raise interest rates throughout the year. Interest rates are dynamic and unpredictable — at least on a daily or weekly basis — and they respond to many economic conditions. But the actions of the Fed, designed to reduce the level of inflation, had an unmistakable effect on mortgage rates.

The outlook for 2023 remains uncertain. Although the high prices seem to be permanent, most of the increases may be behind us. That’s what was noticed, trying to stop the market is difficult. If inflation continues, more interest rate hikes could follow. So, you may have better luck locking in a low interest rate mortgage now than waiting; after that, you can always refinance later. Whenever you decide to buy a home, it’s always a good idea to look at several loans to compare prices and fees to find the best mortgage for your specific situation.

30 year fixed rate mortgage

The average 30-year fixed mortgage rate was 6.40%, a decrease of 7 basis points compared to last week. (The base rate is equal to 0.01%.) Thirty-year fixed-term mortgages are the most common loan terms. A 30-year fixed mortgage typically has a higher interest rate than a 15-year fixed mortgage — but also a lower monthly payment. You won’t be able to pay off your house quickly and you will pay more interest over time, but a 30-year fixed mortgage is a good option if you are looking to lower your monthly payments.

15 year fixed rate mortgage

The average 15-year, fixed-rate mortgage was 5.73%, a decrease of 26 basis points from the same time last week. Compared to a 30-year fixed mortgage, a 15-year fixed mortgage with the same loan amount and interest will have a higher monthly payment. However, if you can afford the monthly payments, there are many benefits to a 15-year loan. These include typically getting a lower interest rate, paying off your mortgage sooner and paying less interest over the long term.

5/1 adjustable rate mortgage

The 5/1 adjustable rate mortgage has an average rate of 5.46%, a drop of 5 basis points compared to last week. For the first five years, you usually get a lower interest rate with a 5/1 adjustable rate mortgage compared to a 30-year fixed rate mortgage. However, you may end up paying more after that time, depending on the terms of your loan and how the market rate changes. Because of this, an adjustable rate mortgage can be a good option if you plan to sell or refinance your home before the rate changes. But if that’s not the case, you could be on the hook for a higher interest rate when market prices change.

Mortgage rate trends

Mortgage rates were historically low at the start of 2022 but continued to rise throughout the year. The Federal Reserve raised interest rates seven times in an effort to curb inflation. As a general rule, when the economy is low, mortgage rates tend to be low. When inflation is high, prices tend to be high.

Although the Fed does not directly set mortgage rates, the central bank’s policies affect how much you pay to finance your home loan. If you are looking to buy a home, keep in mind that the Fed has indicated that it will continue to raise rates through 2023 and that trends that may lead to higher mortgage rates.

We use data collected by Bankrate, which is owned by the same parent company as CNET, to track price changes over time. This chart summarizes the average rates offered by lenders across the country:

The current mortgage interest rate

Types of loans Interest Last week Changes
30-year fixed rate 6.40% 6.47% -0.07
15-year fixed rate 5.73% 5.99% -0.26
30-year jumbo mortgage rates 6.39% 6.43% -0.04
30 year mortgage refinance 6.46% 6.48% -0.02

Updated January 16, 2023.

How to find the best mortgage rates

You can get a personalized mortgage rate by contacting your local mortgage broker or using an online calculator. Be sure to take into account your current finances and your goals when looking for a mortgage.

Specific interest rates will vary based on factors including credit score, down payment, debt-to-income ratio and loan-to-value ratio. Having a good credit score, a very low down payment, a low DTI, a low LTV, or any combination of those factors can help you get an interest rate. low.

In addition to the mortgage interest rate, factors including closing costs, fees, depreciation and taxes may also affect the value of your home. Be sure to comparison shop with multiple lenders — including credit unions and online lenders in addition to local and national banks — to find a mortgage that is right for you.

How will the term of the loan affect my mortgage?

One of the important considerations when choosing a mortgage is the term of the loan, or the schedule of payments. The most common loan terms are 15 years and 30 years, although 10-, 20- and 40-year mortgages are also available. Mortgages are further divided into fixed and adjustable rate mortgages. Interest rates on a fixed mortgage are the same for the duration of the loan. Unlike a fixed-rate mortgage, the interest on an adjustable-rate mortgage is limited to a specific period of time (usually five, seven or 10 years). After that, the rate is adjusted every year based on the current interest rate in the market.

One thing to consider when deciding between a fixed mortgage and an adjustable rate mortgage is how long you plan to stay in your home. Permanent mortgages may be more suitable for those who plan to live in a home for a while. Fixed-rate mortgages offer more stability over time than adjustable-rate mortgages, but adjustable-rate mortgages can offer lower interest rates up front. If you don’t plan to keep your new home for more than three to 10 years, however, an adjustable-rate mortgage can get you a better price. There is no perfect loan term as a rule of thumb; it all depends on your goals and your current financial situation. Be sure to do your research and understand what is most important to you when choosing a mortgage.

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