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Over the past few weeks, mortgage interest rates have dropped significantly. As of late last week, 30-year fixed mortgage rates were about 50 basis points lower than last week.

Interest rates are expected to continue to decline throughout the year, and 30-year rates could end up as low as 5% by the end of 2023, according to the Mortgage Bankers Association. This will translate into greater purchasing power for home buyers and will likely provide a much-needed boost to the housing market.

Current mortgage rates

Type of mortgage Average exchange rate today
This information was provided by Zillow. See more mortgage rates on Zillow

Current refinancing rates

Type of mortgage Average exchange rate today
This information was provided by Zillow. See more mortgage rates on Zillow

Mortgage calculator

Use our free mortgage calculator to see how today’s mortgage rates will affect your monthly payments. By plugging in different rates and term lengths, you’ll also understand how much you’ll pay over the entire length of your mortgage.

Mortgage calculator

Your estimated monthly payment

  • Paying a 25% a higher down payment will save you $8,916.08 on interest payments
  • Interest rate reduction 1% would save you $51,562.03
  • Additional payment $500 each month will reduce the term of the loan 146: months

Click More Details for tips on how to save money on your mortgage in the long run.

30 year fixed mortgage rates

The current average 30-year fixed mortgage rate is 6.33%, according to Freddie Mac. This is a decrease compared to the previous week.

A 30-year fixed rate mortgage is the most common type of home loan. With this type of mortgage, you’ll pay back what you borrowed over 30 years, and your interest rate won’t change over the life of the loan.

A long 30-year term allows you to spread your payments over a long period of time, which means you can keep your monthly payments lower and more manageable. The trade-off is that you’ll have a higher interest rate than you would with shorter terms or adjustable rates.

15 year fixed mortgage rates

The average 15-year fixed mortgage rate was 5.52%, down from last week, according to data from Freddie Mac.

If you want the predictability that comes with a fixed rate, but want to spend less on interest over the life of your loan, a 15-year fixed rate mortgage may be a good fit for you. Because these terms are shorter and have lower interest rates than a 30-year fixed-rate mortgage, you can save tens of thousands of dollars in interest. However, you will have a higher monthly payment than you would with a longer term.

Should I get a HELOC? Pros and cons

If you’re looking to tap into your home equity, a HELOC may be the best way to do it right now, especially given how much home prices have risen over the past few years. Unlike a cash-out refinance, you won’t have to get a completely new mortgage with a new interest rate, and you’ll likely get a better rate than you would with a home equity loan.

But HELOCs don’t always make sense. It is important to consider the pros and cons.

HELOC side

  • Pay only interest on your debt
  • Usually have lower interest rates than alternatives, including home equity loans, personal loans and credit cards
  • If you have a lot of equity, you can potentially borrow more than you can get with a personal loan

Against a HELOC

  • Rates are variable, which means your monthly payments may increase
  • Taking equity out of your home can be risky if property values ​​decline or you default on the loan.
  • The minimum withdrawal amount may be more than you want to withdraw

When will mortgage interest rates decrease?

Mortgage rates began to rise from historic lows in the second half of 2021 and rise by more than three percentage points in 2022.

However, prices are likely to drop dramatically soon. As inflation begins to decline, mortgage rates will also decline somewhat. If we are in a recession, prices may come down a little faster. But average 30-year fixed rates will likely remain somewhere between 5% and 6% throughout 2023.

How are Fed rate hikes affecting mortgages?

The Federal Reserve is raising the federal funds rate this year in an effort to slow economic growth and control inflation. Inflation has slowed so far, but it is still above the Fed’s 2% target rate.

Mortgage rates are not directly affected by changes in the federal funds rate, but they often rise or fall ahead of the Fed’s policy moves. That’s because mortgage rates change based on investor demand for mortgage-backed securities, and this demand is often influenced by how investors expect Fed hikes to affect the broader economy.

As inflation begins to fall, mortgage rates should as well. But the Fed said it was watching for steady signs of slowing inflation.


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