Today’s mortgage, refinance rates: January 22, 2023

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Mortgage rates rose in early January, but have declined over the past few weeks. Average 30-year fixed rates are now 6.15%, according to Freddie Mac. Average 15-year fixed rates also fell to 5.28%, the lowest since mid-September.

Interest rates are expected to decline in 2023 as the Federal Reserve eases its fight against inflation. Mortgage rates aren’t directly influenced by the Fed, but they often rise or fall based on how investors expect the Fed’s moves to affect the broader economy.

Mortgage rates today

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

Mortgage refinance rates today

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

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.

30 year fixed mortgage rates

The current average 30-year fixed mortgage rate is 6.15%, 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 is 5.28%, 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.

How are Fed rate hikes affecting mortgages?

The Federal Reserve raises the federal funds rate in an attempt to slow economic growth and control inflation. So far, inflation has slowed slightly, but it is still well 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 is watching for steady signs of slowing inflation and is not planning to end hiking rates anytime soon, although it may begin to opt for smaller hikes at its next two meetings.

When will mortgage interest rates decrease?

Mortgage rates rose sharply in 2022, but have started to ease somewhat over the past few months.

In December 2022, the consumer price index increased by 6.5% year-on-year, which is a significant slowdown compared to the previous month. This is good news for mortgage borrowers and the wider economy.

As inflation goes down, mortgage rates will go down as well. But the Fed is looking for steady signs of slowing inflation, meaning it is unlikely to end hiking rates anytime soon, although officials have said they expect to slow the pace of growth. This should help ease upward pressure on mortgage rates.

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.

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