Today's best mortgage and refinance rates, March 15th, 2023 - Rates down
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Mortgage rates trended lower on all loan 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 declined.
Mortgage rates have been on a wild ride of late, with the 30-year fixed now flirting with the once-unthinkable threshold of 7 percent as the Federal Reserve continues to crack 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 2021 to near 7 percent now — would’ve seemed laughably unlikely a year ago,” says Greg McBride, CFA, Bankrate chief financial analyst. “Inflation running at 40-year highs will do that.”
The central bank is expected to raise rates again at its March 22 meeting — but by how much is a toss-up. While Fed officials had been telegraphing an increase of 0.5 percentage point, or 50 basis points, that changed with a sudden banking crisis. Over the March 10 weekend, both Silicon Valley Bank and Signature Bank failed in rapid succession, marking the second- and third-largest bank collapses in U.S. history. Now, it’s possible that the Fed could raise rates by a more modest 0.25 percentage point, or 25 basis points. Mortgage rates tumbled in the aftermath of the bank failures, and it’s possible that a new round of financial uncertainty will be favorable for borrowers.
|Loan type||Interest rate||A week ago||Change|
|30-year fixed rate||6.96%||7.11%||-0.15|
|15-year fixed rate||6.27%||6.30%||-0.03|
|5/1 ARM rate||5.80%||5.87%||-0.07|
|30-year fixed jumbo rate||6.96%||7.16%||-0.20|
Rates last updated on March 15, 2023.
These rates are Bankrate's overnight average rates and are based on the assumptions shown here. Actual rates listed within the site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Wednesday, March 15th, 2023 at 7:30 a.m.
>>See historical mortgage interest rate movements
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 falls, -0.15%
The average rate for the benchmark 30-year fixed mortgage is 6.96 percent, a decrease of 15 basis points over the last seven days. A month ago, the average rate on a 30-year fixed mortgage was lower, at 6.77 percent.
At the current average rate, you'll pay a combined $662.62 per month in principal and interest for every $100,000 you borrow. That's a decline of $10.09 from last week.
15-year mortgage falls,-0.03%
The average rate for the benchmark 15-year fixed mortgage is 6.27 percent, down 3 basis points since the same time last week.
Monthly payments on a 15-year fixed mortgage at that rate will cost around $859 per $100k borrowed. The bigger payment may be a little harder 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 rate eases, -0.07%
The average rate on a 5/1 ARM is 5.80 percent, falling 7 basis points over the last 7 days.
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 periodically throughout the life of the loan, unlike fixed-rate loans. These loan types are best for people who expect to refinance or sell before the first or second adjustment. Rates could be substantially 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 5.80 percent would cost about $587 for each $100,000 borrowed over the initial five years, but could climb hundreds of dollars higher afterward, depending on the loan's terms.
Current jumbo mortgage rate moves down, -0.20%
The average rate for the benchmark jumbo mortgage is 6.96 percent, a decrease of 20 basis points over the last week. Last month on the 15th, the average rate for jumbo mortgages was below that, at 6.81 percent.
At the average rate today for a jumbo loan, you'll pay principal and interest of $662.62 for every $100,000 you borrow. That represents a decline of $13.46 over what it would have been last week.
Summary: How mortgage interest rates have moved over the past week
- 30-year fixed mortgage rate: 6.96%, down from 7.11% last week, -0.15
- 15-year fixed mortgage rate: 6.27%, down from 6.30% last week, -0.03
- 5/1 ARM mortgage rate: 5.80%, down from 5.87% last week, -0.07
- Jumbo mortgage rate: 6.96%, down from 7.16% last week, -0.20
30-year fixed-rate refinance trends down, --0.11%
The average 30-year fixed-refinance rate is 6.97 percent, down 11 basis points over the last week. A month ago, the average rate on a 30-year fixed refinance was lower, at 6.87 percent.
At the current average rate, you'll pay $663.29 per month in principal and interest for every $100,000 you borrow. That's a decline of $7.39 from last week.
Mortgage rate trends: Where 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-rate mortgage is the most popular loan for homeowners. This mortgage has a number of advantages. Among them:
- 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.
How does credit score affect my mortgage rate?
A credit score of 760 or higher generally will help you qualify for the best rates offered by any mortgage lender. However, you don’t need excellent credit to qualify for a mortgage. Loans insured by the Federal Housing Administration, or FHA, have a minimum credit score requirement of just 580.
Ideally if you have a lower score, you want to work on your credit to get the best loan offers possible. While you can get a mortgage with poor or bad credit, your interest rate may not be as favorable.
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