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Mortgage and refinance rates today, January 18th, 2023: Rates down

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National mortgage rates dropped across the board 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 moved lower.

Mortgage rates have been on a wild ride as of late, with the 30-year fixed now past the once-unthinkable threshold of 7 percent as the Federal Reserve cracks down on inflation.

“The speed with which mortgage rates have increased in recent months has been whiplash-inducing and the cumulative effect — from near 3 percent at the beginning of the year to near 7 percent now — would’ve seemed laughably unlikely at the beginning of the year,” says Greg McBride, chief financial analyst for Bankrate. “Inflation running at 40-year highs will do that.”

The central bank raised rates again at its November meeting — but what comes next is a toss-up. Some anticipate more forward marching for mortgage rates, possibly tapping 8 percent, while others say subsequent Fed hikes have already been accounted for and rates should stabilize. Others see the Fed pulling back at the end of the year.

Average mortgage interest rates
Loan type Interest rate A week ago Change
30-year fixed rate 6.46% 6.52% -0.06
15-year fixed rate 5.79% 5.89% -0.10
5/1 ARM rate 5.45% 5.50% -0.05
30-year fixed jumbo rate 6.47% 6.51% -0.04

Rates last updated on January 18, 2023.

The rates listed above are marketplace averages based on the assumptions indicated here. Actual rates available within the site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Wednesday, January 18th, 2023 at 7:30 a.m.

You can save thousands of dollars over the life of your mortgage by getting multiple offers.

"All too often, some homeowners 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, Bankrate senior economic analyst. "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?"

Mortgage interest rates

30-year mortgage rate drops, -0.06%

The average rate for a 30-year fixed mortgage is 6.46 percent, down 6 basis points from a week ago. This time a month ago, the average rate on a 30-year fixed mortgage was higher, at 6.47 percent.

At the current average rate, you'll pay $629.44 per month in principal and interest for every $100k you borrow. That's $3.94 lower, compared with last week.

15-year mortgage declines,-0.10%

The average 15-year fixed-mortgage rate is 5.79 percent, down 10 basis points over the last seven days.

Monthly payments on a 15-year fixed mortgage at that rate will cost around $833 per $100,000 borrowed. The bigger payment may be a little tougher to find room for in your monthly budget than a 30-year mortgage payment would, 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 quickly.

5/1 ARM moves lower, -0.05%

The average rate on a 5/1 ARM is 5.45 percent, sliding 5 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 can change intermittently throughout the life of the loan, unlike fixed-rate loans. These loan types are best for those who expect to refinance or sell before the first or second adjustment. Rates could be much 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 5.45 percent would cost about $565 for each $100,000 borrowed over the initial five years, but could ratchet higher by hundreds of dollars afterward, depending on the loan's terms.

Jumbo loan interest rate trends down, -0.04%

The average jumbo mortgage rate today is 6.47 percent, down 4 basis points since the same time last week. A month ago, the average rate was lesser, at 6.46 percent.

At today's average rate, you'll pay $630.10 per month in principal and interest for every $100,000 you borrow. That's lower by $2.63 than it would have been last week.

Recap: How mortgage interest rates have shifted

  • 30-year fixed mortgage rate: 6.46%, down from 6.52% last week, -0.06
  • 15-year fixed mortgage rate: 5.79%, down from 5.89% last week, -0.10
  • 5/1 ARM mortgage rate: 5.45%, down from 5.50% last week, -0.05
  • Jumbo mortgage rate: 6.47%, down from 6.51% last week, -0.04

Refinance rates

30-year fixed-rate refinance declines, --0.03%

The average 30-year fixed-refinance rate is 6.53 percent, down 3 basis points from a week ago. A month ago, the average rate on a 30-year fixed refinance was higher, at 6.54 percent.

At the current average rate, you'll pay $634.04 per month in principal and interest for every $100,000 you borrow. Compared with last week, that's $1.98 lower.

Where mortgage rates are headed

The days of sub-3 percent mortgage interest on the 30-year fixed are behind us, and rates have so far risen beyond 7 percent in 2022.

"Low interest rates were the medicine for economic recovery following the financial crisis, but it was a slow recovery so rates never went up very far," says McBride. "The rebound in the economy, and especially inflation, in the late pandemic stages has been very pronounced, and we now have a backdrop of mortgage rates rising at the fastest pace in decades."

Comparing mortgage terms

The 30-year fixed mortgage is the most popular loan for homeowners. This type of loan has a number of advantages, including:

  • Lower monthly payment: Compared to a shorter term, such as 15 years, the 30-year mortgage offers lower payments spread over time.
  • Stability: With a 30-year mortgage, you lock in a consistent principal and interest payment. Because of the predictability, you can plan your housing expenses for the long term. Remember: Your monthly housing payment can change if your homeowners insurance and property taxes go up or, less likely, down.
  • Buying power: With lower payments, you can qualify for a larger loan amount and a more expensive home.
  • Flexibility: Lower monthly payments can free up some of your monthly budget for other goals, like saving for emergencies, retirement, college tuition or home repairs and maintenance.
  • Strategic use of debt: Some argue that Americans focus too much on paying down their mortgages rather than adding to their retirement accounts. A 30-year fixed mortgage with a smaller monthly payment can allow you to save more for retirement.

That said, shorter-term loans have gained popularity as rates have been historically low. Although they have higher monthly payments compared to 30-year mortgages, there are some big benefits if you can afford the upfront costs. Shorter-term loans can help you achieve:

  • Greatly reduced interest costs: Because you pay off the loan faster, you’ll be able to pay less interest overall.
  • Lower interest rate: On top of less time for that interest to compound, most lenders price shorter-term mortgages with lower rates.
  • Build equity faster: The faster you pay off your mortgage, the faster you’ll own value in your home outright. That’s especially handy if you want to borrow against your property to fund other spending.
  • Debt-free sooner: A shorter-term mortgage means you’ll own your house free and clear sooner than you would with a longer-term loan.

Lock your mortgage rate now or wait?

A rate lock guarantees your interest rate for a specified period of time. Lenders often offer 30-day rate locks for a nominal fee or roll the price of the lock into your loan. Some mortgage lenders will lock rates for longer periods of time, sometimes for more than 60 days, but those locks can be expensive. In today’s unstable market, some lenders will lock an interest rate for just two weeks because they don’t want to take on unnecessary risk.

The benefit of a rate lock is that if interest rates rise, you’re locked into the guaranteed rate. Some lenders have a floating-rate lock option, which allows you to get a lower rate if interest rates fall before you close your loan. In a falling rate environment, a float-down lock could be worth the cost. Because mortgage rates are not predictable, there’s no guarantee that rates will stay where they are from week to week or even day to day. So, if you can lock in a low rate, then you should do so rather than gamble on interest rates falling even lower.

Remember: During the pandemic, all aspects of real estate and mortgage closings are taking much longer than usual. Expect the closing on a new mortgage to take at least 60 days, with refinancing taking at least a month.

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