Mortgage and refinance rates today, September 19th, 2023: Rates down
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Mortgage rates sunk across all terms from a week ago, according to data compiled by Bankrate. Rates for 30-year fixed, 15-year fixed, 5/1 ARMs and jumbo loans all fell.
Mortgage rates have risen substantially since 2022, with the popular 30-year fixed rate loan breaking through 7 percent this summer. After a stretch of record lows, rates increased in 2022 thanks to inflation and the Federal Reserve’s response. The Fed last hiked its key interest rate in July, the latest in a tightening cycle that began last year.
The central bank’s next move is to decide whether to increase rates again. It’ll announce its decision on Sept. 20.
The increase in mortgage rates comes alongside appreciating home prices, both of which have have kept many buyers on the sidelines. More than half of home purchase mortgages originated in July had a monthly payment over $2,000, according to Black Knight. Twenty-three percent of originations in July had a payment over $3,000.
What’s more: As the summer wound down, new mortgage applications sank to their lowest level since 1996, according to the Mortgage Bankers Association.
| Loan type | Interest rate | A week ago | Change |
|---|---|---|---|
| 30-year fixed rate | 7.55% | 7.59% | -0.04 |
| 15-year fixed rate | 6.80% | 6.81% | -0.01 |
| 5/1 ARM rate | 6.53% | 6.57% | -0.04 |
| 30-year fixed jumbo rate | 7.58% | 7.62% | -0.04 |
Rates last updated on September 19, 2023.
The rates listed above are marketplace averages based on the assumptions indicated here. Actual rates listed across the site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Tuesday, September 19th, 2023 at 7:30 a.m.
Mortgage interest rates
30-year fixed-rate mortgage dips, -0.04%
The average rate for the benchmark 30-year fixed mortgage is 7.55 percent, down 4 basis points from a week ago. Last month on the 19th, the average rate on a 30-year fixed mortgage was higher, at 7.61 percent.
At the current average rate, you'll pay principal and interest of $702.64 for every $100,000 you borrow. That's $2.75 lower, compared with last week.
While the 30-year rate is the most popular mortgage term, as with any financial product, the 30-year fixed-rate mortgage also has some downsides:
- More total interest paid. A 30-year term means you'll pay more overall in interest compared with what you'd pay with a shorter-term loan.
- Higher mortgage rates. Lenders charge higher interest rates for 30-year mortgages compared to 15-year loans. That's because they're taking on the risk of not being repaid for a longer time span.
- Slower equity growth. The amortization table for a 30-year mortgage reveals a harsh reality: In the early years, almost all of your payments go to interest rather than principal. A 15-year loan brings a higher monthly payment but much faster payoff of the loan amount.
- Buying more house than you should. Just because you might be able to afford more house with a 30-year loan doesn’t mean you should stretch your budget to the breaking point. Give yourself some breathing room for other financial goals and unexpected expenses. Use Bankrate’s home affordability calculator to determine how much house you can afford.
15-year mortgage rate moves lower, -0.01%
The average rate you'll pay for a 15-year fixed mortgage is 6.80 percent, down 1 basis point over the last seven days.
Monthly payments on a 15-year fixed mortgage at that rate will cost $888 per $100,000 borrowed. Yes, that payment is much bigger than it would be on a 30-year mortgage, but it comes with some big advantages: You'll come out several thousand dollars ahead over the life of the loan in total interest paid and build equity much more rapidly.
5/1 ARM rate eases, -0.04%
The average rate on a 5/1 adjustable rate mortgage is 6.53 percent, falling 4 basis points from a week ago.
Adjustable-rate mortgages, or ARMs, are mortgage terms that come with a floating interest rate. To put it another way, the interest rate will change at regular intervals, unlike fixed-rate mortgages. These types of loans are best for people who expect to refinance or sell before the first or second adjustment. Rates could be considerably higher when the loan first adjusts, and thereafter.
While borrowers shunned ARMs during the pandemic days of super-low rates, this type of loan has made a comeback as mortgage rates have risen.
Monthly payments on a 5/1 ARM at 6.53 percent would cost about $634 for each $100,000 borrowed over the initial five years, but could increase by hundreds of dollars afterward, depending on the loan's terms.
Jumbo mortgage slides, -0.04%
The average jumbo mortgage rate today is 7.58 percent, a decrease of 4 basis points since the same time last week. This time a month ago, the average rate was above that, at 7.65 percent.
At the average rate today for a jumbo loan, you'll pay a combined $704.70 per month in principal and interest for every $100,000 you borrow. That's a decline of $2.75 from last week.
Refinance rates
Current 30 year mortgage refinance rate retreats, -0.04%
The average 30-year fixed-refinance rate is 7.74 percent, down 4 basis points from a week ago. A month ago, the average rate on a 30-year fixed refinance was higher, at 7.83 percent.
At the current average rate, you'll pay $715.72 per month in principal and interest for every $100,000 you borrow. That's a decline of $2.77 from last week.
Where are mortgage rates going?
Economists are on the fence about where mortgage rates might end up, according to Bankrate’s latest mortgage rates forecast. Some experts have speculated the 30-year rate could increase to 8 percent, while others expect rates to cool down by the end of 2023.
The rates on 30-year fixed mortgages mostly follow the 10-year Treasury yield, which shifts continuously as economic conditions dictate, while the cost of variable-rate home loans mirror the Fed’s moves.
“Economic data that is not too hot and not too cold would be helpful to mortgage rates and could get rates back down below 7 percent,” says Greg McBride, chief financial analyst for Bankrate, adding, “but that has to be true for inflation, job growth, wages and consumer spending.”
What these rates mean for your mortgage
While mortgage rates are notoriously volatile, there is some consensus that we won’t see rates back at 3 percent for some time. If you’re shopping for a mortgage now, it might be wise to lock your rate when you find an affordable loan. If your house-hunt is taking longer than anticipated, revisit your budget so you’ll know exactly how much house you can afford at prevailing market rates.
You could save serious money on interest by getting at least three loan offers, according to Freddie Mac research. You don’t have to stick with your bank or credit union, either. There are many types of mortgage lenders, including online-only and local, smaller shops.
"All too often, some [homebuyers] take the path of least resistance when seeking a mortgage, in part because the process of buying a home can be stressful, complicated and time-consuming," says Mark Hamrick, senior economic analyst for Bankrate. "But when we’re talking about the potential of saving a lot of money, seeking the best deal on a mortgage has an excellent return on investment. Why leave that money on the table when all it takes is a bit more effort to shop around for the best rate, or lowest cost, on a mortgage?”
More on current mortgage rates
Methodology
Bankrate displays two sets of rate averages that are produced from two surveys we conduct: one daily (“overnight averages”) and the other weekly (“Bankrate Monitor averages”).
The rates on this page represent our overnight averages. For these averages, APRs and rates are based on no existing relationship or automatic payments.
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