Today’s Mortgage, Refinance Rates: Jan. 20, 2023

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Average 30-year fixed mortgage rates fell to 6.15% this week, according to Freddie Mac. Last week they were at 6.33%.

Mortgage interest rates have fallen for three weeks in a row.

“Rates are at their lowest level since September of last year, boosting homebuyer demand as well as homebuilder sentiment,” Sam Khater, Freddie Mac’s chief economist, said in a news release. “The drop in rates is providing a much-needed boost to the housing market, but the supply of homes remains an ongoing challenge.”

Today’s mortgage rates

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

Mortgage refinancing rates today

Type of mortgage Average 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 would affect your monthly payments. By plugging in different rates and repayment lengths, you’ll also understand how much you’ll pay over the life of the mortgage.

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Mortgage calculator

$1 161
Your estimated monthly payment

  • Payment a 25% a higher down payment would save you $8,916.08 on interest charges
  • Interest rate reduction by 1% would save you $51,562.03
  • Surcharge 500 dollars every month would shorten the length of the loan by 146 months

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

30-year fixed mortgage interest 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, meaning you can keep your monthly payments lower and more manageable. The trade-off is that you will have a higher rate than you would with shorter terms or adjustable rates.

15-year fixed mortgage interest rates

The average 15-year fixed mortgage rate is 5.28%, down from the previous 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 the loan, a 15-year fixed rate mortgage may be the right choice for you. Because these terms are shorter and have lower rates than 30-year fixed-rate mortgages, you could potentially save tens of thousands of dollars in interest. However, you will have a higher monthly payment than with a longer time horizon.

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Are mortgage rates going up?

Mortgage rates began to decline from historic lows in the second half of 2021 and rose significantly in 2022. However, mortgage rates are expected to begin falling later this year.

Over the past 12 months, the Consumer Price Index has increased by 6.5%. The Federal Reserve is working to get inflation under control and is expected to keep the federal funds rate elevated until it falls to the Fed’s target rate of 2%.

Inflation remains high, but has started to slow, which bodes well for mortgage rates and the broader economy.

How does a Fed rate hike affect mortgages?

The Fed raises the federal funds rate to try to slow economic growth and bring inflation under control.

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

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When inflation starts to fall, so should mortgage rates. But the Fed has signaled it is watching for persistent signs of slowing inflation and is not looking to cut rates again anytime soon – although it has begun to decide on smaller increases, starting with 50 basis points in December.

Are HELOCs a good idea right now?

Many homeowners have gained a lot of equity over the past few years as home prices have increased at an unprecedented rate. But with rates so high now, tapping into that capital can be expensive.

For homeowners who want to use their home’s value to cover 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 similar to a credit card in that you borrow what you need instead of getting the full amount you borrow in one lump sum.

Depending on your finances and the type of HELOC you get, you may be able to get a better rate with a HELOC than you would with a home equity loan or cash-out refinance. Keep in mind that HELOC rates are variable, so if rates continue to increase, yours will likely increase as well.

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