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Mortgage rates have held steady after trending lower over the past few weeks, and major forecasts expect rates to continue to decline in 2023.

Inflation has continued to slow over the past few months, a sign that the economy is finally starting to cool. We may experience a mild recession in 2023, which will put more downward pressure on mortgage rates.

Today’s mortgage rates

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

Today’s 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 interest rates will affect your monthly payments.

Mortgage calculator

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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

By clicking More Details, you’ll also see how much you’ll pay for the entire length of your mortgage, including how much is allocated to principal versus interest.

Are HELOCs a good idea right now?

Many homeowners have purchased large properties over the past few years as home prices have increased at an unprecedented rate. But with rates now so high, tapping into that equity can be expensive.

For homeowners who want to use the value of their home to make a large purchase, such as a home renovation, a home equity line of credit (HELOC) may still be a good option.

A HELOC is a line of credit that allows you to borrow against the equity in your home. It works like a credit card in that you borrow what you need instead of getting a lump sum.

Depending on your finances and the type of HELOC you get, you may get a better interest rate with a HELOC than you would with a home equity loan or cash-out refinance. Just remember that HELOC rates are variable, so if rates start to go higher, yours likely will too.

Mortgage interest rate forecast for 2023

Mortgage rates began to rise from historic lows in the second half of 2021 and have risen by more than three percentage points so far in 2022. They are likely to remain near their current levels for the remainder of 2022.

But many forecasters expect interest rates to start falling next year. In their latest forecast, Fannie Mae researchers predicted that 30-year fixed rates would decline throughout 2023 and 2024.

But whether mortgage rates will fall in 2023 depends on whether the Federal Reserve can control inflation.

In the last 12 months, the consumer price index increased by 7.1%. That’s a significant slowdown from where inflation was earlier this year, a sign that mortgage rates may also be coming down soon.

If the Fed acts too aggressively and creates a recession, mortgage rates could fall further than currently forecast. But interest rates likely won’t fall to the historic lows that borrowers have enjoyed for the past few years.

When will the prices of apartments decrease?

Home prices are starting to fall, but we likely won’t see huge declines even if there is a downturn.

The S&P Case-Shiller home price index shows prices are still rising from a year ago, although they fell on a monthly basis in July and August. Researchers at Fannie Mae expect prices to fall 1.5% in 2023, while MBA expects a 0.7% increase in 2023 and a 0.1% decline in 2024.

High subprime mortgage rates have pushed many hopeful buyers out of the market, slowing home-buying demand and putting pressure on home prices. But prices may start to fall next year, which will take some of that pressure off. The current supply of homes is also historically low, which will likely keep prices from falling too far.

What happens to house prices in a recession?

Home prices usually fall during recessions, but not always. When this happens, it’s mostly because fewer people can afford to buy homes, and lower demand forces sellers to lower their prices.

How Much Mortgage Can I Afford?

A mortgage calculator can help you determine how much you can afford to borrow. Play around with different home prices and down payment amounts to see what your monthly payment might be and consider how it fits into your overall budget.

As a rule of thumb, experts recommend spending no more than 28% of your gross monthly income on housing costs. This means that your entire monthly mortgage payment, including taxes and insurance, cannot exceed 28% of your monthly income.

The lower your interest rate, the more you’ll be able to borrow, so shop around and check with mortgage lenders beforehand to see who can offer you the best rate. But remember not to borrow more than your budget can comfortably handle.

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