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Today’s Mortgage Rates for Jan. 24, 2023: Key Rate Rises – CNET

Mortgage rates varied widely over the last seven days, but an important rate inched upward. Average 15-year fixed mortgage rates were static, while average 30-year fixed mortgage rates are a little higher. We also saw a slight contraction in the average rate of 5/1 adjustable-rate mortgages.

Mortgage rates increased dramatically in 2022, as the Federal Reserve hiked interest rates repeatedly throughout the year. Interest rates are dynamic and unpredictable — at least on a daily or weekly basis — and they respond to a wide variety of economic factors. But the Fed’s actions, designed to mitigate the high rate of inflation, had an unmistakable impact on mortgage rates.

The outlook for 2023 remains uncertain. Though higher rates are likely to here to stay, the biggest increases may be behind us. That noted, trying to time the market is tricky. If inflation persists, more interest rate hikes could follow. As such, you may have better luck locking in a lower mortgage interest rate now instead of waiting; after all, you can always refinance later on. No matter when you decide to shop for a home, it’s always a good idea to seek out multiple lenders to compare rates and fees to find the best mortgage for your specific situation.

30-year fixed-rate mortgages

The 30-year fixed-mortgage rate average is 6.47%, which is a growth of 6 basis points from one week ago. (A basis point is equivalent to 0.01%.) The most frequently used loan term is a 30-year fixed mortgage. A 30-year fixed mortgage will typically have a greater interest rate than a 15-year fixed rate mortgage — but also a lower monthly payment. You won’t be able to pay off your house as quickly and you’ll pay more interest over time, but a 30-year fixed mortgage is a good option if you’re looking to minimize your monthly payment.

15-year fixed-rate mortgages

The average rate for a 15-year, fixed mortgage is 5.73%, which is the same rate from seven days ago. You’ll definitely have a higher monthly payment with a 15-year fixed mortgage compared to a 30-year fixed mortgage, even if the interest rate and loan amount are the same. But a 15-year loan will usually be the better deal, if you’re able to afford the monthly payments. You’ll most likely get a lower interest rate, and you’ll pay less interest in total because you’re paying off your mortgage much quicker.

5/1 adjustable-rate mortgages

A 5/1 adjustable-rate mortgage has an average rate of 5.45%, a slide of 1 basis point compared to last week. For the first five years, you’ll typically get a lower interest rate with a 5/1 adjustable-rate mortgage compared to a 30-year fixed mortgage. But since the rate changes with the market rate, you could end up paying more after that time, as described in the terms of your loan. For borrowers who plan to sell or refinance their house before the rate changes, an adjustable-rate mortgage might be a good option. If not, shifts in the market may significantly increase your interest rate.

Mortgage rate trends

Mortgage rates were historically low at the beginning of 2022 but increased steadily throughout the year. The Federal Reserve raised interest rates seven times in an attempt to curb record-high inflation. As a general rule, when inflation is low, mortgage rates tend to be lower. When inflation is high, rates tend to be higher.

Though the Fed does not directly set mortgage rates, the central bank’s policy actions influence how much you pay to finance your home loan. If you’re looking to buy a house, keep in mind that the Fed has signaled it will continue to raise rates in 2023, and that those increases may drive mortgage rates even higher.

We use rates collected by Bankrate, which is owned by the same parent company as CNET, to track rate changes over time. This table summarizes the average rates offered by lenders nationwide:

Average mortgage interest rates

Product Rate Last week Change
30-year fixed 6.47% 6.41% +0.06
15-year fixed 5.73% 5.73% N/C
30-year jumbo mortgage rate 6.50% 6.40% +0.10
30-year mortgage refinance rate 6.52% 6.48% +0.04

Rates as of Jan. 24, 2023.

How to find the best mortgage rates

You can get a personalized mortgage rate by connecting with your local mortgage broker or using an online calculator. In order to find the best home mortgage, you’ll need to take into account your goals and current finances.

Things that affect what the interest rate you might get on your mortgage include: your credit score, down payment, loan-to-value ratio and your debt-to-income ratio. Having a higher credit score, a higher down payment, a low DTI, a low LTV or any combination of those factors can help you get a lower interest rate.

Aside from the interest rate, other factors including closing costs, fees, discount points and taxes might also factor into the cost of your house. You should talk to a variety of lenders — like local and national banks, credit unions and online lenders — and comparison shop to find the best mortgage for you.

What’s the best loan term?

One important thing to consider when choosing a mortgage is the loan term, or payment schedule. The mortgage terms most commonly offered are 15 years and 30 years, although you can also find 10-, 20- and 40-year mortgages. Another important distinction is between fixed- and adjustable-rate mortgages. For fixed-rate mortgages, interest rates are set for the life of the loan. For adjustable-rate mortgages, interest rates are stable for a certain number of years (commonly five, seven or 10 years), then the rate changes annually based on the market rate.

One factor to consider when deciding between a fixed-rate and adjustable-rate mortgage is the length of time you plan on staying in your home. Fixed-rate mortgages might be a better fit for people who plan on staying in a home for quite some time. While adjustable-rate mortgages may offer lower interest rates upfront, fixed-rate mortgages are more stable in the long term. However you may get a better deal with an adjustable-rate mortgage if you only plan to keep your home for a couple years. There is no best loan term as a rule of thumb; it all depends on your goals and your current financial situation. Make sure to do your research and know your own priorities when choosing a mortgage.

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